Estate planning for executives whose will predates their RSUs: a form-by-form review

Step 1: When your will was signed before the RSUs piled up

You probably believe the will still covers everything. It doesn't. Any account with a beneficiary or transfer-on-death form skips the will entirely, and the will governs only what is left over. So start from the cash-flow side: name the money that stops when your paycheck stops. For Meera, a hypothetical 44-year-old general counsel at a public payments company, that is the $4,000 monthly she sends her widowed mother, and the first question is which account would replace it, and how quickly.

Work in this order. First, write down who depends on your paycheck and for how much each month. Second, pull the date on your will. Third, gather the documents below. Only then call your estate attorney. Booking the attorney first is the usual slip, and it means paying to redraft a will that the forms would override anyway.

Gather these, and know where each lives: the RSU and option award agreements plus the equity plan document (the equity administrator's portal); the deferred comp enrollment confirmation and the beneficiary form on file (the plan administrator or benefits portal); transfer-on-death status on the brokerage account holding vested shares (the custodian's account settings, or a call); the group life beneficiary (the HR benefits portal); and any 10b5-1 plan and the insider trading policy (the corporate secretary's office).

Name the monthly money first

Gather the paper before the attorney

• Dependents and the monthly amount each one relies on.
• Date of the current will.
• Award agreements, deferred comp form, transfer-on-death status, group life form, trading plan and policy.

Step 2: Read what the award agreement does with unvested RSUs at death

Many executives believe unvested means forfeited. Sometimes it does. Some agreements accelerate in full at death, some pro-rate by months worked, some forfeit, and some keep vesting on schedule for the estate. Only the award agreement says which. Ask the equity administrator two questions: does my agreement accelerate, pro-rate or forfeit at death, and can I name a beneficiary on the equity portal? 'Your estate will sort it out,' with no document attached, is a worrying answer.

The tax side is narrower than people fear. RSUs that vest because of death are ordinary income at their value on that date, and the income is usually reported to the estate or to the heir who receives the shares, so ask the administrator which. Company withholding can fall short of the tax actually owed, so the heir may need cash set aside. The shares then carry a basis equal to the value that was taxed.

Shares already vested behave differently. Meera's $900,000 of vested shares, with a hypothetical $300,000 basis, would get a step-up to market value at death. That erases the $600,000 gain, so her heirs could sell soon after without capital gains tax. It is one reason the second-opinion move is often to leave a well-placed block of vested shares alone and fix the forms around it. Concentrated stock planning is a separate topic on this site.

Two questions for the equity administrator

Why vested shares are treated differently

Step 3: What happens if the deferred comp form names no one?

If no valid beneficiary form is on file, the plan's default applies, and that default is often your estate, which pulls the balance into probate. Ask the plan administrator for a copy of the form it holds. Two replies are red flags: 'We have nothing on record' and 'it defaults to the estate.'

Payout timing usually follows the schedule already elected for death or separation, lump sum or installments, and a beneficiary generally can't change it. Ask what the beneficiary would receive and when, then write the answer into the roadmap next to the monthly support figure. Our article on deferred compensation when leaving a company covers the payout timeline.

Deferred comp paid after death is income in respect of a decedent: ordinary income to whoever receives it in the year it is paid, with no step-up. A $400,000 lump sum landing on one single heir stays under the 37 percent bracket, which starts at $640,600 for single filers in 2026 (an IRS figure), but it stacks on top of the heir's other income. A large payout can also raise the heir's Medicare premiums two years later.

Check the estate tax threshold too. The IRS exclusion for 2026 is $15,000,000 per person. For most executives at Meera's level, income tax and how fast the money arrives matter far more than estate tax.

What the administrator should tell you

Which income counts

Step 4: Line up the forms and compare two versions of Meera's file

Take two versions of the same hypothetical household (hypothetical, round numbers). Both hold $900,000 in vested shares, $400,000 in deferred comp and $900,000 of RSUs that Meera's award agreement accelerates at death, and in both her mother relies on $4,000 monthly. The one difference: in version one, the brokerage account has no transfer-on-death form and the deferred comp form was never filed, so $1.3 million ($900,000 + $400,000) waits in probate. In version two, both forms name a trust for her mother, and the money can start paying within weeks. The RSUs follow the equity plan's estate rule in both.

Start with the support gap, the top row of the table below. Estate tax and capital gains are zero in both versions: $2.2 million sits far below the $15,000,000 exclusion, and the step-up wipes out the gain. Assuming nine months of probate, for illustration, her mother covers 9 × $4,000 = $36,000 from her own savings in version one and nothing in version two. Probate costs at an assumed 3 percent fall on the full $2.2 million in version one, which comes to $66,000. In version two only the $900,000 of RSUs that follow the estate rule go through probate, which comes to $27,000. The forms save $39,000 in probate costs plus the $36,000 gap, against a one-time attorney cost of about $4,000.

Order matters. Sign the revocable trust first; naming a trust on a form before it exists can get the form rejected or leave it invalid. Then file the deferred comp and transfer-on-death forms, which can usually be changed at any time, so waiting for open enrollment is a needless delay. Then request confirmation copies from each administrator. Updating forms after an illness forces the question is the too-late version, when everything must happen at once.

A mistake worth naming: writing 'my estate' on a deferred comp form because generic advice says to keep the will in control sends the whole balance through probate. On Meera's $400,000 that is about $12,000 at an assumed 3 percent, plus months before her mother sees any of it. Name a trust that carries the will's instructions, then check the confirmation copy.

Meera's group life form already names her mother and pays within weeks. It works, so it stays as it is. Only the two broken links get fixed. If you want to see your own numbers, the calculator here lets you enter your balances and repeat the comparison.

Two versions of one household

The order of fixes

What happens if you die during a blackout window?

A power of attorney ends at death, so only the executor or trustee can act. The company's insider trading policy may still require preclearance for sales by the estate, and a 10b5-1 plan may terminate at death or let the executor keep selling, depending on its terms.

For Meera, the shares she holds to meet her three-times-salary ownership guideline are exactly the ones her mother's trust would need to sell for cash. Ask the corporate secretary what the policy says about an estate. 'The plan ends and the estate waits for an open window' should worry you, because it can mean months without access to the largest asset.

Estate planning for executives at Scotia Wealth Management: a second look at forms you already signed

Scotia Wealth Management reads your award agreements, deferred comp beneficiary form and transfer-on-death settings next to the will you already have, and marks what works and what doesn't. Your estate attorney stays in charge of the legal documents; wills, trusts and powers of attorney need a lawyer licensed in your state. If your estate nears the $15,000,000 exclusion, gifting and trust strategies matter more than probate timing. For a second look at your file, send us a note through the form on this page. Markets can fall and any investment can lose money, so we start with the paperwork.