When an investor wishes to transfer stock, various rules come into play. The procedure is different if stock is being transferred because of a name change, a death or placement in a trust. In addition, each guarantor may have additional requirements that must be met before a transfer request will be accepted, so verifying the process in advance is advisable.
To proceed with a name change transfer, you will need the name, address and Social Security number of the person or entity receiving the shares, in addition to the stock certificates and a completed stock transfer request. The party named on the stock certificate must sign the request with both the old and new names, such as "Jane Doe now known as Jane Smith." If another owner is listed on the certificate, that party must sign as well. If the stock is included in a dividend reinvestment plan, the owner must indicate whether or not the stock will continue to participate.
When a stockholder dies and the certificates are left to an heir of the decedent's estate, a request to transfer stock must be supplied, along with the heir's contact and tax ID information. The stock certificates are sent in as well with a copy of the court-approved estate administrator's appointment, which must be done within 60 days. An Affidavit of Domicile must be completed, notarized and submitted with an Inheritance Tax Waiver. If the stock was jointly owned, the death certificates of all the deceased owners must be provided, with the exception of the most recently deceased owner. The stockholder must indicate whether the stock will continue to reinvest its dividends.
Transferring to a Trust
Some stockholders may decide to transfer stock certificates into a trust account so their loved ones can avoid probate after death. The certificates and transfer request form must be completed, signed and possibly notarized or guaranteed. If the shares yield dividends, the shareholder must indicate whether the shares will continue to participate in a reinvestment plan. The new owner’s vesting will be similar to the following: "John Doe TTEE John Doe Trust U/A Dated 8/8/2011."
A simple, direct transfer to another person must still include the stock certificates plus the signed request form, possibly stamped with a signature guarantee, depending on the requirements of the transfer agent and guarantor. As with other transfers, if the stock will remain in a dividend reinvestment plan, that must be indicated as well.
All forms of stock transfer are usually accompanied by a letter that details the transfer and provides additional instructions, if necessary. Don't forget to check with the stock grantor to see if the firm has any additional transfer requirements.
Lisa Bigelow is an independent writer with prior professional experience in the finance and fitness industries. She also writes a well-regarded political commentary column published in Fairfield, New Haven and Westchester counties in the New York City metro area.