Don’t Forget to Make Plans for Your Stock When Creating an Estate Plan

As you review your assets during the estate planning process, you may decide that naming a transfer on death beneficiary for your shares of stock should be part of your plan. A transfer on death beneficiary is a named individual that receives the shares of stock after you die without requiring probate administration. The named beneficiary has no rights to the stock while you are alive, however.

3 Tips for Naming a Transfer on Death Beneficiary for Your Stocks

How can you set up a transfer on death beneficiary for your shares of stock? The following are three helpful tips:

  1. If you have a brokerage account, contact the broker for instructions. Typically, the broker will send you a form on which to name beneficiaries that you want to inherit your account. This will change the account information, so that the beneficiary’s name is listed after yours in the future.
  2. If you have actual stock certificates in your possession, have new certificates issued. These new certificates must show that you own the stock in beneficiary form. Your broker may be able to assist you. If not, you can contact the transfer agent for the stock.
  3. If you need to change the certificates to show that you own the stock with a named beneficiary, you will likely need to give the company’s transfer agent the stock certificates in your possession. You may also have to submit a stock power, unless the stock power is already printed on the back of the stock certificate. The final item the transfer agent may be looking for is a letter explaining what you want to do. For example, your letter may state that, for the purposes of estate planning, you want to name a beneficiary of the stock after you die.

For assistance making important decisions relating to your estate plan, we strongly encourage you to reach out. Contact us today at (714) 459-5481.

 

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