Orange County California

Trust Attorneys


What to Do With Shares of Stock When Creating Your Estate Plan. Creating an estate plan requires a lot of careful thought and consideration. When you meet with your attorney to begin this process, you will typically provide an overview of all of your assets. One asset you may own is shares of stock. This asset can be handled in a variety of ways when it comes to your estate plan. Your attorney can help you determine which option is right for your needs.

3 Potential Options for Handling Shares of Stock as Part of Your Estate Plan

What are some of the options for handling shares of stock as part of an estate plan? The following are three examples:

  1. Create a trust to hold the shares of stock. If the corporation is an S-corporation, extra caution must be taken before transferring title to a trust. Without proper planning, the S election could inadvertently be destroyed, resulting in potentially disastrous tax consequences for the company. It is important to seek guidance from an experienced attorney before creating an estate plan involving shares of S-corporation stock. When handled properly, the advantage to using a trust to hold shares of stock is that ownership will transfer smoothly and efficiently after your death without requiring the oversight of the probate court.
  2. Create a basic estate plan with a will, power of attorney, and advanced directive. After you die, some of your assets may need to go through the probate administration process. This includes assets that are not held jointly, do not have a named beneficiary, or are not held in a trust. If you have shares of stock in your name individually, the personal representative will have to handle the transfer of the shares of stock from your estate to your beneficiaries.
  3. Name a transfer on death beneficiary for your shares of stock. Most states allow shareholders to name someone to inherit shares of stock without needing probate administration. The steps for setting up a transfer on death beneficiary designation for your stock are sometimes complex. Fortunately, your attorney can help walk you thorough this process. The advantage of using a transfer on death beneficiary for your shares of stock as part of your estate plan is that it is relatively easy to create, is often free, and allows for a quick and easy transfer of the stock upon your death.

What to Do With Shares of Stock When Creating Your Estate Plan. You do not have to make these important decisions without assistance. We are here to help. We encourage you to check out the positive feedback that we have received from former clients on our client testimonials page today.

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