Review your money asset accounts with your brokerage firm to ensure you have designated a beneficiary and the assets are not sent to your estate. Assets can be held in street name or in the client’s name. For assets that are held in street name and the account registration involved is an Individual, Transfer on Death, Joint Tenants with Rights of Survivorship or Joint Tenants in Common the administrative process is determined by the brokerage firm where the assets are held. There is a separate process for stocks not held in street name.
Individual brokerage accounts that have beneficiaries designated would default to the designated beneficiaries and you will want to ask your broker if your account has a beneficiary. If the account does not offer beneficiaries, ask if you can update the registration to Transfer on Death. Accounts that do not have a beneficiary assigned would default going to the estate of the individual. The executor of the estate would then disperse the assets to the beneficiaries of the estate.
Joint Tenants with Rights of Survivorship
Joint Tenants with Rights of Survivorship would go to the surviving joint tenant on the account. If both died, it would have to be legally determined who died first, and then the estate of the person who died last would inherit the entire account.
Joint Tenants in Common
Joint Tenants in Common will list a specific percentage ownership for each joint party for the account. In the event of death the default for this account is for the estate of the deceased person to inherit the percentage ownership of the account.
Transfer on Death
Investors who wish to designate beneficiaries on their account can choose Transfer on Death registration. Normally this can be applied to the existing individual account or to their ownership in a Joint Tenants in Common account. In the event of death, the percentage allocation for each beneficiary would be adhered to by the investment company based on the documentation on file.
Stocks Not Held in Street Name
Stocks that not held in street name are held at the transfer in which the transfer agent sends statements or are held in certificate. The issue for the beneficiary of such stock is that each stock would be held at a different transfer agent and subject to their separate administrative requirements to change the ownership on the stock. What is universal is that you would complete a stock power and have it medallion guaranteed. Any other supporting documentation needed would depend on the registration on the stock (for example, Individual, Joint Tenants in Common) and the requirements of the transfer agent.