Here’s everything you need to know about estate planning for your Paasa account, including how your assets are held and how different assets are handled when an account holder passes away.
Table of contents
- How are your assets held with Paasa?
- Can you add a beneficiary to your Paasa account?
- What documents will your heirs need for estate transfer if you have an Individual account?
- What documents will your heirs need for estate transfer if you have a Joint account?
- Can you convert an Individual account to a Joint account?
- What happens when you hold both US assets and UCITS ETFs?
- Can Interactive Brokers ask for additional documents?
- What should you tell your heirs in advance?
How are your assets held with Paasa?
When you invest globally through Paasa, your money is held with our custodian, Interactive Brokers (IBKR). Your stocks, ETFs, and cash are held entirely in your own name.
Your assets are never pooled into a collective account or held on Paasa’s balance sheet. They remain segregated in an individual or joint brokerage account registered directly to you.
Can you add a beneficiary to your Paasa account?
Our broker, IBKR, does not allow non-US residents to add a nominee to their Individual account. In a Joint account the secondary holder is the beneficiary/nominee.
What documents will your heirs need for estate transfer if you have an Individual account?
Estate processing is handled directly by IBKR. Your heirs will need to provide the following documents to establish their legal authority over the estate.
Step 1: Establishing legal authority
IBKR requires the legal executor, administrator, or heirs to provide:
- Valid proof of identity of the executor or executors, or the heirs.
- A certified copy of the death certificate.
- A certificate of inheritance, succession document, or probate court order recognising the executor or administrator of the estate.
- Notarised English translations of any document that was not originally issued in English.
Probate in the deceased’s country of residence is sufficient to establish legal authority over the estate.
Step 2: US estate tax formalities
Before IBKR releases any US-situs holdings in the account, it must complete a US estate tax compliance step. This applies only to the US-situs portion of the account.
For the US-situs holdings, your heirs must provide one of the following:
- A signed letter confirming that the deceased held less than $60,000 in US-located assets at the time of death, or
- A Transfer Certificate from the IRS, obtained by filing Form 706-NA, the estate tax return for a non-resident alien, and paying any estate tax due. The certificate itself is issued as Form 5173.
Which route applies depends only on the value of your US-located assets, not on the size of the overall account. A large UCITS position does not push you into the Transfer Certificate route.
All cash in the account, regardless of currency, is considered a US asset.
For most Paasa customers, who hold mainly UCITS ETFs and other non-US securities, the signed letter may be enough.
For more on how US estate tax works for people who were not US citizens or residents, see the IRS guidance for non-resident aliens.
Step 3: Distributing the assets
Once the documentation has been reviewed and verified, IBKR works with the heirs on how the assets in the account should be distributed.
The options are:
- Transfer the assets equally across all heirs’ IBKR accounts.
- Process an internal transfer to an IBKR account an heir already holds.
- Send the proceeds by wire transfer to a bank account.
IBKR provides account-specific instructions once it has completed its review of the initial documentation.
Note: IBKR reviews every estate case individually and may request supporting documents beyond the list above. Final instructions come directly from IBKR to verified estate administrators, heirs, or beneficiaries.
What documents will your heirs need for estate transfer if you have a Joint account?
The simplest way to ensure a seamless transfer of assets on death is to open a joint account structured as Joint Tenants with Rights of Survivorship (JTWROS).
All Paasa joint accounts are set up as JTWROS.
Under this structure, both account holders share equal, undivided ownership of the account. When one holder passes away, full ownership transfers automatically to the surviving holder, bypassing probate court entirely.
What should you do if a joint holder passes away?
The surviving holder needs to inform IBKR and submit a certified death certificate.
IBKR does not place a restriction on the account while this is processed. The survivor keeps full access throughout.
The assets are then automatically transferred completely into the surviving joint holder’s name.
US estate tax and other applicable taxes will still apply.
The portion of the account funded by the deceased holder will come under US estate tax rules. If that portion is over $60,000, applicable US estate tax will be due and the surviving holder will need to obtain the Transfer Certificate from the IRS.
For how joint accounts are taxed in India and how the IRS decides who funded the account, read how joint global brokerage accounts are taxed.
Can you convert an Individual account to a Joint account?
Yes. Email support@paasa.com to request an account change.
A new joint account is opened in both your names, and your positions are then transferred from the Individual account to the Joint account.
The entire process can take up to two weeks because the new account has to be opened before the positions can be transferred.
Note: There are no capital gains tax implications for moving positions and funds between your own Interactive Brokers accounts, and Paasa charges no fee for transfers between IBKR accounts.
What happens when you hold both US assets and UCITS ETFs?
US estate tax applies to US-situs assets in your account, measured at their value on the date of your death.
US stocks and US-domiciled ETFs are US-situs assets.
UCITS ETFs held through Paasa are non-US assets, so they are not US-situs and fall outside US estate tax.
Cash balances follow a different rule from securities. Because your account is held with Interactive Brokers LLC, a US entity, both your USD and EUR cash balances are treated as US-situs assets. They count toward the $60,000 threshold alongside your US stocks and ETFs.
For the full rules on who pays US estate tax and which assets count, read how US estate tax works for Indians and NRIs.
For US-situs assets, the estate tax is calculated on the full value using the same graduated rate schedule that applies to US citizens’ estates (IRC §2001(c)), and is then reduced by a flat $13,000 unified credit under §2102(b)(1).
Because that credit exactly cancels out the tax on the first $60,000 of US-situs assets, estates at or below that value owe nothing. Brokers therefore use $60,000 as the working threshold for requiring the IRS process. You can work out what your heirs would owe with our US estate tax calculator. IRS guidance.
Case 1: US assets under $60,000
Suppose you hold the following in your IBKR account at the time of your death:
- $40,000 in Irish-domiciled UCITS ETFs
- $30,000 in US stocks
Here’s how they will be treated:
1. The non-US-situs part
The UCITS ETFs are not US-situs, so they are released to your heirs through the normal estate process described above.
2. The US-situs part
Your US stocks total $30,000, which is below the $60,000 threshold.
No estate tax is due and no IRS Transfer Certificate is needed. Your heirs sign the letter confirming that the deceased held less than $60,000 in US-located assets, and IBKR can release the holdings.
The result: Your heirs deal only with the standard inheritance documents, plus one signed letter covering the US-situs side. The IRS is not involved.
Case 2: US assets over $60,000
Now suppose your US stocks are worth $90,000 instead.
1. The UCITS ETFs
The UCITS ETFs are still released through the normal estate process described above.
2. The US-situs part
The US-situs assets now exceed $60,000. The signed letter is no longer available, so those US stocks remain frozen until your heirs file Form 706-NA, settle any US estate tax due, and obtain the IRS Transfer Certificate (Form 5173).
Only then will IBKR release them.
The result: The UCITS portion passes through the normal estate process while the US portion waits for the IRS process. The IRS currently takes 18 to 24 months to process an estate tax return, which is the single biggest cause of delay for a global estate.
Note: These examples cover securities only. Any cash balance in the account, in any currency, is generally added to the US-situs total.
Can Interactive Brokers ask for additional documents?
Yes. IBKR reviews each estate case individually and may require additional documents or processes beyond those mentioned here.
Final processing instructions come directly from IBKR to verified estate administrators, heirs, or beneficiaries.
What should you tell your heirs in advance?
Most delays in an estate case occur when heirs do not know where to start. Leave them the following details:
- Your Paasa account number. You can find it in the Paasa app under Profile.
- The email address and phone number registered on the account.
- Your account type: Individual or Joint.
- Where your will and identity documents are kept.
Note: Paasa does not obtain the IRS Transfer Certificate on your heirs’ behalf. This falls outside the scope of our services, so the beneficiary is responsible for obtaining it, along with any other documentation requested by Interactive Brokers.
Interactive Brokers and Paasa are unable to provide tax or legal advice in connection with estate matters. Consult a qualified tax professional, particularly where cross-border inheritance is involved.
At a glance
| What you hold | US estate tax? | What your heirs need |
|---|---|---|
| UCITS ETFs (Irish-domiciled) | No, non-US situs | Step 1 documents only, no estate tax step |
| Cash balances (USD or EUR), held with Interactive Brokers LLC | Yes, always US-situs regardless of currency | Counted with US stocks and ETFs toward the $60,000 threshold |
| US stocks and US ETFs under $60k | No, within the threshold | Step 1 documents, plus the signed letter for the US-situs part |
| US stocks and US ETFs over $60k | Yes | Step 1 documents, plus Form 706-NA and an IRS Transfer Certificate (Form 5173) for the US-situs part |
About Paasa
Paasa is a global investing platform for Indian residents and NRIs. It gives you direct access to stocks on their home exchanges in the US, Canada, the UK, Germany, France, Switzerland, the Netherlands, South Korea, Japan, Hong Kong and Singapore, along with ETFs and UCITS funds.
- Assets held in your own name. Paasa runs on Interactive Brokers as the underlying broker and custodian, so your heirs inherit a clean, identifiable account rather than a pooled position.
- Joint accounts as standard JTWROS. Every joint account opened through Paasa is structured with rights of survivorship, and we help existing customers convert from Individual to Joint at no cost.
- Access to UCITS. Structuring global holdings through Irish-domiciled UCITS ETFs keeps them outside the US estate tax net and avoids the IRS Transfer Certificate process.
