Planning your estate allows you to decide in advance who gets your stocks after your death. You can leave your stocks to family members, a trusted friend or your favorite charity. You can choose to have the stocks included in your estate, make them part of your trust, or retitle them to avoid probate altogether. Prior planning ensures that each beneficiary receives the stock you want them to have.
Change the name on the security so it is held as a Transfer On Death, or TOD, to avoid probate. Your broker can provide you with the documents to change the name on the security and will handle the paperwork for you. The Transfer On Death Securities Registration Act allows you to change the way the stock is held so that it automatically passes to the beneficiary named on the stock certificate upon your death. For example, you can rename the stock as “John A. Doe, TOD to Mary B. Smith.”
Leave the stock to your beneficiary in your Last Will & Testament. You just print or type the beneficiary's full legal name, the company name as it is printed on the stock certificate, the number of shares and the CUSIP number found on the certificate. The stock will become part of your probate estate and will pass to the named beneficiary after all qualified estate costs and expenses are paid. You do not need to rename the stock certificate, and you can sell the stock while you are still living. If you need help, consult an attorney about having a will made or changing your existing will.
Have an attorney create a trust for you and place the stock in the trust. The attorney will follow your instructions and include the name the beneficiary, the name of the stock, the number of shares and the CUSIP number as printed on the certificate. Your broker can provide you with the documents to change the name on the security to the trust's name and will handle the paperwork for you. The trust will hold the stock for you unless you change your mind and take the stock out of the trust or until your death.
Items you will need
- List of stocks and beneficiaries
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- Advantages of an Irrevocable Trust
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