For the protection of everyone involved, transferring stock is not an easy process. However, your brokerage firm will assist you in making sure that you fill the paperwork out correctly and legally. If you are transferring stock to a minor, you should contact an attorney to set up a trust for the child and transfer the stock to the trust instead of directly to the minor.
Ask your broker or stock transfer agent for a form to transfer the stock. Your broker may call this form a Transfer of Stock Ownership form, Stock Power form or a Request to Transfer Stock form. While you can fill out the back of each stock certificate, using a form simplifies the process and decreases the potential for errors.
Complete the transfer form. Include the full name and address of the person who is receiving the stock. Mark on the form whether to new account is a joint account, trust, transfer-on-death account -- in which the beneficiary does not receive the stock until your death -- or a custodial account. If the transfer is for a custodial account, you must name the custodian and the minor. Include the custodian's address and the minor's social security number. List the number of each type of share you are transferring and total the amount. Enter your name exactly as it appears on the stock certificates and your account number. Write the date, your telephone number and sign the form.
Take the form to a financial institution that participates in the Medallion Stamp Program to verify your identity. Your bank or brokerage can assist you in locating a financial institution if they are not in the program. Take documentation of your identity, such as your Social Security card, birth certificate and driver's license. The institution will stamp your form guaranteeing that you have the legal right to transfer your stock.
Make copies of your transfer forms. Return the form and your stock certificates to your broker or stock transfer company by certified, insured mail. Insure your package for the stock's value to protect your investment.
- Make sure that you spell all names correctly and are that they are exactly like the names on the certificate.
- If you keep your stock through an electronic account, you only need to mail the transfer form and any required documentation.
- Consult your accountant if the value of the stock exceeds the annual gift tax exclusion. As of the time of publication, you can gift up to $13,000 to an individual without tax repercussions.
- Call the financial institution providing the Medallion Signature Guarantee before you go to make sure you have all of the documentation they need to confirm your identity.
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