Your Private Fund Account and Your Estate Plan: What You Need to Know

How to title your account, what we’ve seen investors do, and why getting this right matters more than most people realize.

By Jen Kasse

Estate planning has a way of prompting great questions about the investments you've worked hard to build. One we hear often: how should my private fund account be titled? Whether you're setting up a trust for the first time, reorganizing how you hold your assets, or simply wanting to make sure everything is in order — account titling is one of those details that quietly matters a great deal. It shapes who controls the asset, how it passes to the people you care about, and in some cases, it can affect tax results.

The First Question: Does Your Tax ID Change?

When an investor comes to us wanting to update how their account is held, the first thing we ask is whether the tax ID (SSN or EIN) on the account is changing. That single answer shapes everything: the paperwork, the timeline, and who needs to sign off. There are usually two scenarios.

Retitle — same tax ID, new name

If the underlying tax ID stays the same and you're simply updating the account name, such as moving from your individual name into a revocable living trust with the same SSN, this is a retitle. In most cases, we just need a written request, an updated W9, and a copy of the trust or entity formation documents (if applicable) confirming the name and tax ID. We coordinate the update with our fund administrator from there.

Transfer — new entity, new tax ID

If ownership is genuinely moving to a new entity with a different EIN or SSN, including an LLC, a new trust with its own EIN, or a different custodian's IRA, that's a transfer. Transfers require a full documentation packet, fund manager signature, and an effective date on the first or last day of a quarter. If applicable, we also require trust or entity formation documents for any trust or entity receiving the interest.

What We’ve Seen Investors Do

Moving into a living trust

An investor works with their estate attorney, establishes a living trust, and wants their fund interest to sit inside it — so that if they pass, the asset transfers to heirs without going through probate. If the trust uses your SSN, it’s a retitle. If it has its own EIN (common for irrevocable trusts), it’s a transfer. Either way, we’ll need a copy of the trust agreement or certificate of trust.

Holding through an LLC or family entity

Some investors prefer their alternative investments held at the entity level — for liability protection, tax structuring, or simply to keep their estate organized by entity. This is a transfer, since the LLC carries its own EIN. We’ll need your operating agreement or articles of organization as part of the packet.

IRA accounts and custodian changes

Some investors hold their fund interest inside a self-directed IRA. If you move custodians, that’s a transfer between two custodians. One important point for estate planning purposes: the beneficiaries of an IRA-held fund interest are whoever is named in your IRA documents, not something the fund designates separately. Please make sure those designations are current (see the “Can I just name a beneficiary?” section below).

Before initiating any custodian change, confirm your new custodian can hold private fund interests — not all of them can. You should also confirm any potential tax implications caused by the change, as we are not able to provide any tax or legal advice.

When an investor passes away

When we're notified of a death, we require a death certificate and will or estate documentation before sharing any account information. Only the executor, trustee, or named beneficiary may engage with us. Once verified, we process the transfer to heirs through our standard workflow.

Divorce

We can split or transfer an interest as part of a divorce settlement once a legal agreement is in place. The tax treatment is entirely between you and your advisors. We process the paperwork once we have clear direction.

"Can I Just Name a Beneficiary?"

The short answer is no — and it's worth understanding why, because the workaround is actually straightforward.

Private fund interests are limited partnership interests — a form of ownership in a private investment fund — and they work differently from bank or brokerage accounts. There’s no mechanism for a payable-on-death or transfer-on-death designation. Any change in ownership, including passing an interest to heirs, requires a formal transfer process with documentation and fund manager approval.

A solution used by many investors: hold the interest through a living trust that already names your successors. What happens at death depends on how the trust is set up. If the trust has its own EIN, we simply update the contact information in our system to reflect the successor trustee — no transfer needed. If the trust was using the deceased investor’s SSN, we’ll need to process a transfer to the successor to update the SSN. Talk to an estate attorney about what makes sense for your situation.

If you hold via an IRA, beneficiary designations live in your IRA documents.

Tax Considerations Worth Raising With Your Advisor

Changing how your account is titled can have tax consequences that ripple beyond the transfer itself. We’re not tax advisors and cannot provide tax advice, but here are the conversations we see investors have most often with their CPAs:

• K-1 timing. A mid-year transfer typically results in two K-1s for that year: one for you, one for the receiving entity.

• Revocable vs. irrevocable trusts. Revocable trusts are income-tax transparent and the IRS treats you as the owner. Irrevocable trusts have their own tax obligations. The distinction matters. Your CPA and estate attorney should align on this.

• IRA rollovers. Custodian-to-custodian transfers are typically non-taxable if structured as direct rollovers, but confirm with your custodian before initiating.