When you leave stock to heirs in your will, the shares go through probate. It can take months or years until stock is actually passed on to beneficiaries. You can sidestep probate entirely by naming a beneficiary on stocks. Beneficiaries can be individuals or organizations like charities. To name a beneficiary for stocks, you must register the shares in what is known as transfer-on-death form.
TOD Stock Registration
The procedure for registering stocks in TOD form depends on the way you hold the shares. Most people keep shares in a brokerage account or in an account with the transfer agent of the company that issued the stock. In either case, request a registration form, complete it and submit it to the account provider. Once this is done, ownership is registered in TOD form. For example, the registration might read: “John Smith, TOD Mary Smith.” You can name multiple beneficiaries and even stipulate how much each beneficiary is to receive provided the account provider’s policy includes these options.
Managing Stocks with Beneficiaries
Beneficiaries have no rights to or control of the stock as long as you live. An important point is that TOD registration sets aside provisions of a will. The Wall Street Journal warns that you should carefully review all your estate plans and periodically make sure TOD registration and your will reflect you current wishes and aren’t outdated or in conflict with each other.
- Photo Credit Wavebreakmedia Ltd/Wavebreak Media/Getty Images
How Are Stocks Split Up to Beneficieries After a Death?
Review your money asset accounts with your brokerage firm to ensure you have designated a beneficiary and the assets are not sent...
How to Sell an Inherited Stock Certificate
If you are trying to settle an estate and found several stock certificates in Aunt Bessie's safety deposit box, then you need...
How to Change the Beneficiary on Walmart Stock
Walmart is a publicly traded company that issues stock and trades on the New York Stock Exchange under the ticker symbol WMT....
How Are Stocks Inherited?
The process of inheriting stocks is relatively straightforward and is generally beneficial tax-wise for heirs.
Estate Vs. Beneficiary Taxes
When an individual dies with a sizable estate, the tax implications for the beneficiaries can be a bit confusing. The estate will...
Life Insurance Beneficiary Questions
When you purchase a life insurance policy, you are required to name a beneficiary. The beneficiary is the person, persons or organization...