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Affidavit of Residence Form, Beneficiary, Brokerage Firm, Common Estates, decedent, estate, Executor, Inheritance Tax Waiver Form, Joint Account, Medallion Signature Guarantee, Notary, probate, Stocks, Tax Id Number, Transfer Agent, Transfer Form, Transfer Stocks, Transfer-On-Death Accounts, W-9 Form
In many common estates, executors may need to transfer stocks owned by the decedent at some point in their estate administration. To determine the extent of their involvement in the transfer process, the executor must review how the decedent held the stocks during life. For instance:
- If the decedent held stocks in an account with a Transfer on Death registration, and the account has designated beneficiaries, the beneficiaries handle the transfer process.
- If the decedent held stocks in a joint account, the surviving account holder owns the stocks. However, the surviving account holder is responsible for the transfer process if the surviving account holder wants to drop the name of the decedent from the account.
- If the decedent held stocks in an individual account and the stocks were only in the decedent’s name, then the stocks would have to go through probate and the executor transfers the stocks to the estate.
- If the decedent named a beneficiary in the will to receive the stocks and the stocks weren’t needed to pay the debts and taxes of the estate, then the executor transfers the stocks to the beneficiary at the end of the probate process.
If the executor determines that their involvement in the transfer process is necessary, then the executor should contact the brokerage firm or transfer agent that holds the stock for instructions on how to transfer stocks owned by the decedent.
Transfer Stocks Owned by the Decedent
In the estate I handled, I had to transfer stocks to the estate. After contacting the transfer agent handling the stocks, on instructions from the representative, I downloaded the transfer package that contained all the forms needed to complete the transfer. Also, the transfer package included instructions to complete the entire transfer process. So, by following instructions, these are the steps I completed to transfer stocks owned by the decedent to the estate:
- Complete the enclosed Transfer Form. On the transfer form you provide information about the existing account, the new account, and the amount of shares to transfer. In the new account section, you will provide the name of the estate and the name of the executor as you must open a new account in the name of the estate. Don’t sign the form yet.
- Complete the W-9 form for the new estate account. On the W-9 form, use the estate tax id number you received when opening the estate.
- Complete state tax agency requirements. If the decedent lived in a state that has an inheritance tax, you must obtain an Inheritance Tax Waiver Form from the state tax agency. Conversely, if an Inheritance Tax Waiver Form isn’t required, you must complete the enclosed Affidavit of Residence form attesting to the decedent’s state of residency and have the completed form notarized.
- Once you complete all the forms, bring them to the bank where you set up the estate bank account to obtain a Medallion Signature Guarantee and to have the completed Affidavit of Residence notarized, if needed. While at the bank, a bank official will look over the forms for accuracy and will have you sign the completed transfer form. Then the bank official will stamp the MSG and sign the form. Most banks will have a notary in the branch and the notary will stamp the affidavit, if needed. As a reminder, bring a copy of the death certificate and your letter of authority. The bank should have the copies from when you opened the estate bank account, but you should always carry a copy of those forms anytime you conduct estate business.
- About 5 to 10 days after mailing the package back to the transfer agent, you should receive confirmation of the completed transfer to the new estate account. Furthermore, you should receive the access code needed to get into the new estate account. Once you receive the access code to the new estate account you have control of the shares of stock.
Conclusion
The process of transferring stock owned by the decedent is just paperwork. Whether you are an executor of an estate or a beneficiary, the process is similar. The only difference is naming the new account and the tax id number you need to use. And if you need help, representatives from the brokerage firm or the transfer agent holding the stock will provide assistance every step of the way. So, in the end, the task to transfer stocks owned by the decedent is really a straightforward task.
Recommended Reading
After transferring stocks to the new estate account or individual account, and you eventually sell the stock, you need to understand the tax implications of the sale. Refer to the article Calculating Capital Gains to understand the treatment of capital gains on inherited stock.
Do you think the transfer process is a straightforward process? Do you have questions regarding the topic of transferring stocks to an estate or individual? Share your comments and questions in the comment box below.
I appreciate your sharing your knowledge in these confusing (to the uninitiated) matters. My situation is my father died in 2001, leaving a modest number of IBM shares-45 to my mother, who probated his estate, but never transferred the shares into her name, as it was understood that they were to become mine upon her passing. She died in 2008, and I am the executor. I probated her estate, with advice of counsel, but never did anything with the shares. Since my father and I have the same name, I just cashed the dividend checks. The tax was paid on the stepped up basis to her, but now the same applies here. Currently, I could use the proceeds from selling said shares, but am not certain as to how to proceed. That lawyer is retired in Florida now. The state is Pennsylvania. Thank you in advance.
Hi Michael,
You will most likely need to probate those shares in Pennsylvania so the shares can be transferred in your name. Why your previous lawyer didn’t bring this up is beyond me? Especially, when the probate administration was setup. Done right, the transfer is easy to do. However, you will need, at least, the death certificate of your Father because the shares remain in his name.
You may be able to set up a small estate in probate just to transfer the shares. Basically, go to the Department of Revenue weebsite to see if this is possible. Otherwise, if you don’t want to deal with this yourself, find an attorney that handles probate or an estate attorney and they will guide you through the probate process.
I hope this helps.
Robert
Four heirs, inherited stock on a TOD, my question is do all heirs have to have their paperwork into the holding company before the stock is transferred to each heir? If yes how long do, we have to wait to take them to court to ask a judge to compel them to sign?
Hi Christine,
To answer directly: Since the shares have a TOD beneficiary, the heirs can claim their share of stock at any time. The only consequence of holding off from claiming stock is the daily change in valuation of the stock. If the heirs claimed their shares earlier in the year, the value would of increased. If they are still holding off claiming shares, the values dropped significantly and have a good chance of dropping further.
If you’re trying to encourage these heirs to claim their shares quickly, let them know of the consequence of holding off from claiming the shares. If these heirs have any respect for money, they may move quickly.
I hope this helps.
Robert
Years ago, a friend and I bought some Public Storage Stock. Both names were on the certificate and the friend has passed away. I do not have a copy of her death certificate, but I know the date and her social security number.
I used to get the stock dividend checks (with both names), endorse and deposit them.
When I changed PO Box Numbers, the checks stopped.
What do I need to do to remove her name from the stock certificate and have the dividend checks sent to me again?
Hi Doug,
Sorry for your loss. I am assuming you hold the stock certificates because of the way you presented this matter. So, there are a couple of things you need to do:
1) You will need a copy of the death certificate. So, you can call or email city hall in the city where she resided when she passed and ask for a copy of her death certificate. Another way is to ask the person who served as executor of her estate for a copy if you know them. Either way, you shouldn’t have a hard time getting a death certificate. Especially since you know the date of death and social security number.
2) Call the brokerage firm you bought the shares from or the company if you bought them directly and explain what you want to do with the shares. Since your name is on the shares the firm will ask for a copy of the death certificate and proof of who you are. After you provide that information, they’ll go through the process of dropping the name of your friend.
Also, I am assuming that you didn’t inform the brokerage or the company that sold you the shares your change of address. In this situation, the company is sending out the dividend checks to the old address. You may need to contact the postal service about the checks that have been sent to your old P.O. Box. The postal service may have them. Or, the person who owns your old P.O. Box is either sending them back to the firm or throwing them out. So, you may need to do some tracking to recover that money.
Anyway, I hope this helps.
Good luck,
Robert
My father left stock to me in his will and named me executor of his estate. the will was probated and now a year later i am transferring the stocks. Do they still need to go into an estate? Or can I transfer them directly to myself?
Hi Kayla,
You should be able to transfer those stocks to a brokerage account in your name. The problem I have with your question is I am not sure of the status of the stocks today. In probate, you can claim those stocks by transferring them to a temporary inheritance account controlled by the executor. From the temporary account, you can transfer the stocks into an account in your name. Then, close the temporary account.
I you haven’t started that process, contact the brokerage firm that holds the stocks and they will give you a transfer package to claim the stocks and will explain the process. Most of the transfer can be done online, but you may have to find a bank to guarantee your signature to complete the process. Typically, you would use the bank you have the state account with to help you with the signature guarantee. Anyway, your first step would be to contact the brokerage, either on-line or by phone, to get started.
I hope this helps.
Robert
My Father had several small position in stocks solely in the name of my father. His will leaves equal parts of the value of estate to the four children. I, as Independent Executor of the Succession, plan to transfer stocks to the estate. Can I, as executor, sell the stocks and deposit the proceeds in the estate checking account before the estate is settled with a judgement of possession. Would this transact qualify for the step up in basis of stocks for capital gain purposes?
Hi Thomas,
Sorry for the delay. Based on your question, you will need to go through probate to transfer the stocks to the estate. Basically, you get the transfer package from the brokerage that holds the stock. Once you process the paperwork, you send it back to the brokerage and they will setup a transfer account and move the stocks to the new account. At that point, you can sell the stock and move the proceeds to the estate account if you wish and then close the transfer account.
If you have any problems, contact the brokerage and they will walk you through the process. In my experience, I received and completed the paperwork online. It may take the brokerage a few days to open the new account and transfer the stocks.
I hope this helps.
Robert
I am the executor for my parents estate. My father died in September 2015 and all his estate went to my mother who dies in February 2022. The an estate account for remaining funds is in a local credit union. I do retain an estate attorney. The beneficiaries (myself, a brother, two sisters, and three grandchildren are beneficiaries) are in the process of getting our parents house sold. In a random box of papers I came across a Stock Certificate for Microsoft Stock. There was no other paper work with the document. Reading your information it states I should contact compushare and I had tried that once and have been very frustrated by the process. I am very computer literate but do not seem to be able to make sense of how to actually get the information to them. Is there any other transfer agent you can recommend
Hello Rebecca,
Yes, any brokerage firm, such as Fidelity, could provide information on how to handle the stock certificate. Fidelity, at least in my area, has many branch offices. You could actually call for an appointment, or perhaps walk-in. I would try the retail brokers such as Fidelity or Schwabb first. There are many, but a lot of them are on-line brokers with few offices. Fidelity and Schwabb have branch offices where you could actually talk to someone in person.
I hope this helps.
Good luck,
Robert
I was just appointed Administrator of my dad’s Estate, with Full Authority. He left no Will, Trust, or Beneficiaries. My sister and I are the sole heirs ( intestate law). We have no disputes. My father owned stock shares, valued around 200,000. Do we have to wait for a Probate Referee to appraise, or can I transfer the shares 50/50 now? Do the shares have to be transferred to the Estate Account, then transfer again to give her her share later? Thanks!
Hi Debbie,
Sorry for the late response. Since the estate needs probate, you will need to go through a transfer process with the financial firm that holds the stock. You will need to contact the financial firm and ask for the transfer package as you will need to provide details about the account and the shares your father owned. In many cases you can request this package online and the forms will be sent to you. There are a few articles in this blog that point you in the right direction and explain the process I had to use. However, all you really need to do is call or go online to the financial firm and they will guide you.
I hope this helps.
Robert
My sister in law died testate holding several stocks. My husband is the Executor of her estate and the only surviving family member. We do not need the stocks to pay for any of her final expenses. My question is do we have to transfer the stocks to the Estate account or can we transfer directly to him as her will gives all her estate to him?
Hi Jeannette,
It depends on how the stocks were left to your husband. If your husband was listed as the beneficiary only in the will, the stocks would need to go through probate. If the decedent listed your husband as a TOD beneficiary on the account where the stocks are held, then the stocks would go directly to your husband. Your husband would need to call the financial institution holding the stocks regardless to make the transfer to him or to an estate account. The financial institution would provide him with a transfer packet and instructions on how to claim the stocks. It takes a little paper work, but the process is straight forward.
I hope this helps.
Robert
i need to sell three of the stocks held by my father(deceased) and the other three i would like to transfer directly to the 3 heirs. my question is do i transfer the three i need to sell to his estate? and then can i transfer directly from fathers name to the heirs names
It depends on how the stocks were held. If the stocks were held in a registered Transfer on Death account with designated beneficiaries, the beneficiaries will handle the shares left to them. If the stocks were held in an account solely in the name of your father, then the stocks will need to go through probate. This means at the point you are ready to move the stocks you have to set up accounts through a transfer agent such as compushare. You will need to set up four accounts: 1 for each heir and one in the name of the estate. Once the transfers are made you can sell the stocks in the estate account. Since you transferred stocks to account in the name of heirs, the heirs can take control of their accounts.
I hope this helps.