Introduction: choosing the right estate bank account for consolidation

Executors often need two things fast: a compliant estate bank account and a clear consolidation path for cash and securities. This page compares a Schwab One Estate Account (brokerage-led) with a Sunset Estate Bank Account (software-led, cash-first) across documentation, EIN workflow, FDIC coverage, timelines, and practical “keep‑your‑existing‑bank” scenarios.

What a Schwab One Estate Account provides

A Schwab One Estate Account is a brokerage account specifically for court‑appointed executors/administrators to manage and distribute estate assets. Core attributes:

• Purpose-built for consolidating investable assets, valuing holdings, and distributing to heirs. Schwab lists $0 to open/maintain and $0 online stock/ETF commissions; other fees can apply. See Schwab’s estate account page for current details.

• Application requirements include a Tax ID for the estate (EIN) and court documents (e.g., Letters Testamentary/Administration certified as current).

• Cash handling uses Schwab’s Cash Features Program (Bank Sweep or money fund sweep). Bank Sweep deposits to one or more program banks are eligible for FDIC within applicable limits; sweep money funds are not FDIC‑insured.

• Operational timeline: after notifying Schwab of a death and providing documentation, most transfers complete in “a few weeks,” with an online Inheritance Center and optional estate specialist support.

Practical use cases

• You want to hold securities in-kind, value the estate for IRS reporting, and distribute brokerage assets without liquidating unless desired.

• You already custody most investments at Schwab and prefer to maintain existing positions during administration.

What a Sunset Estate Bank Account provides

Sunset is end‑to‑end estate settlement software that discovers accounts, generates probate documents in all U.S. counties, and sets up a dedicated estate bank account for cash consolidation and bill‑pay. Key points:

• No fees to families; Sunset is paid by bank partners via interest while funds sit in the estate account.

• FDIC insurance on the estate bank account “up to $3 million,” per Sunset’s program.

• Software automates discovery across banks, retirement, insurance, property, vehicles, and more; most families locate all assets within about a week; some bank balance confirmations can take up to two weeks.

• Probate document generation (50 states, 3,000+ counties) with e‑notarization where available; executor maintains full approval for all actions.

Practical use cases

• You need an estate bank account quickly for paying estate bills, taxes, and reimbursements while software accelerates discovery and paperwork.

• You prefer automated consolidation of scattered cash balances with elevated FDIC capacity through Sunset’s banking program.

FDIC coverage: estate bank accounts vs. sweeps vs. securities

• Estate/decedent accounts at a single bank are insured in the “single (individual) account” category of the decedent and are generally capped at $250,000 per insured bank. Adding heirs as “beneficiaries” to an estate account does not increase FDIC coverage.

• Trust/POD/TOD accounts follow different rules. As of April 1, 2024, trust accounts (revocable and most irrevocable) are insured up to $250,000 per eligible beneficiary, capped at $1,250,000 per owner at a given bank. This is not how estate/decedent accounts are insured.

• Brokerage sweeps: If a brokerage estate account uses a bank sweep to one or more banks, the swept cash is eligible for FDIC coverage subject to program terms; cash in money market funds is not FDIC‑insured; securities are protected by SIPC (not FDIC). Refer to the brokerage’s Cash Features Program.

Implications for consolidation

• Large cash positions often benefit from a dedicated estate bank account with higher aggregate FDIC capacity via program banks (e.g., Sunset’s stated “up to $3 million”). Verify specific program limits and bank lists before funding.

• Securities portfolios are typically best held in a brokerage estate account (e.g., Schwab) for in‑kind custody, trading, and distribution; use a separate estate bank account for payments.

EIN and paperwork workflow (applies to any estate bank/brokerage account)

• Obtain court authority: Letters Testamentary/Administration (terminology varies by state and probate path). Schwab requires recently certified letters with seal for its estate account application.

• Apply for the estate EIN (Tax ID) on IRS.gov; the online tool issues an EIN immediately if approved. The tool is available Monday–Friday, 7 a.m.–10 p.m. ET, and there’s a one‑EIN‑per‑responsible‑party‑per‑day limit.

• Title the account correctly (e.g., “Estate of [Full Name], EIN xx‑xxxxxxx”).

• Centralize cash inflows (redeemed accounts, refunds, sale proceeds) into the estate account; use it to pay allowed expenses and taxes; document all distributions.

Keep‑your‑existing‑bank guidance (when and how)

Executors frequently mix approaches for efficient estate account consolidation:

• If most value is in a Schwab brokerage portfolio: open a Schwab One Estate Account to hold securities in‑kind and manage distributions; open or maintain a separate estate bank account for bill‑pay and tax remittances.

• If the priority is cash consolidation and higher aggregate FDIC capacity: use a dedicated estate bank account with program‑bank coverage (e.g., Sunset’s “up to $3 million” FDIC). Keep brokerage assets where they are until liquidation is desired.

• Hybrid pattern: keep existing brokerage (e.g., Schwab) for investments; route cash realizations into the estate bank account you prefer for payments and record‑keeping. Ensure your accounting ledger reflects both accounts.

Note: FDIC insurance applies to bank deposits; SIPC applies to brokerage securities. Review each program’s disclosures and coverage calculators before choosing a structure.

Side‑by‑side comparison (estate account consolidation focus)

Sources: Schwab Estate Account, Schwab Inheritance Center, HelloSunset—How it works, FDIC guidance.

FAQs

• Do I need an EIN before opening? Yes. Estate accounts generally require an EIN; apply online and receive it immediately if approved.

• Can I increase FDIC above $250,000 in an estate account? At a single bank, estate/decedent accounts are insured as the decedent’s single‑owner category and generally capped at $250,000; higher aggregate coverage typically requires program‑bank structures or multiple banks.

• Can I open a Schwab estate account without probate? Schwab indicates its estate account may be opened only when the estate is under court supervision and before a final decree of distribution. Check their current application.

Decision guidance

• Use a Schwab estate account when you need brokerage custody, trading, and in‑kind distributions of securities.

• Use a Sunset estate bank account when you need rapid asset discovery, probate document automation, cash consolidation, and elevated FDIC coverage via program banks.

• Many executors use both: keep securities at Schwab; centralize cash in a dedicated estate bank account for payments and distributions. Verify coverage and disclosures for each account before funding.