Joint tenancy is a type of legal ownership structure that allows the joint tenancy holdings of a deceased person to be automatically inherited by the other party in joint tenancy ownership. Although joint tenancy with rights of survivorship (JTWRS) is the most common and normally what is being referred to by the term joint tenancy, there is another form. It is joint tenancy by the entireties (JT ENT), which is restricted to married or legally joined couples. There is another form of joint ownership that is often mistaken for JTWRS or JT ENT, that is tenants in common (TEN COM).
1. Obtain the stock certificates if they are not already held in safekeeping at a brokerage firm. If they are in safekeeping, and are not in an estate, just put in an order to sell. You must be authorized to transact business in that account. If the stock certificates are held by the owner, check the exact wording on the registration.
2. Open a brokerage account in the exact name listed on the certificates, if they are not already held at a broker. The account name must match the registered name or the certificates cannot be delivered into the account.
3. Deliver the certificates by taking them into a branch of your broker. If there is no branch near you, send them via certified mail. Write your account number in the top right corner of each certificate. Sign a stock power for each certificate and mail it in a separate envelope with copies of the originals.
4. Obtain a copy of the trust if the certificates were bought in a living or family trust. Most brokerage firms require a complete copy of any trust documents, but some will accept copies of certain pages. Ask your broker or a customer service rep what kind of documentation you will need to open a trust account.
5. Obtain a copy of the death certificate if you are selling certificates in an estate where one of the joint tenants has died. Again, different firms have different policies regarding documentation. Always ask what is needed.
- Always ask detailed questions when dealing with the opening of a new trust account or estate account. If you have inherited stock certificates from an estate, it is better to have the certificates re-registered in your name by the estate, if possible. Otherwise, you will have to open an account for each different registration, supply the documentation and then have all certificates re-registered in the name of your account.
- Stock powers endorse stock certificates, just like an endorsement on the back of a check. Never send endorsed stock powers in the same envelope as certificate originals. Do not endorse the certificates, either. Endorsed certificates are freely tradeable, though most firms are careful about accepting endorsed certificates from someone who seems to have no connection to the registered owners.
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