Putting Stocks or Bonds into a Trust
Transferring stocks and bonds into a trust is possible, but it takes some time and know-how, which means you should seek the assistance of an experienced estate planning attorney to do it correctly. You will need to be mindful of both state and federal laws, along with any specific requirements established by the issuer of the stock or bond.
Below is a brief overview of what you’ll need to know about this process.
Moving stocks and bonds into a trust
To put any stocks or bonds you own into a trust, you must use a securities assignment or stock power document. This document asks the “transfer agent” of the securities for permission to transfer those securities into your chosen trust. That agent is the company or individual responsible for tracking the securities that a government or corporation has issued. Your transfer agent will be able to provide you with more details about what you will need to provide.
If you have a publicly traded security that is bought and sold to the public through a stock exchange, the stockholder’s signature must also be “guaranteed” by a stock brokerage firm or a commercial bank, similar to how you must have some paperwork notarized.
If you have any brokerage accounts, you will need to submit a letter to the brokerage firm asking it to make the transfer. The brokerage firm will need thorough documentation of the trustee’s powers to manage securities. Every brokerage firm has its own requirements.
If you are going to transfer U.S. Savings Bonds, you’ll need a special form (FS Form 1851) to ensure the bonds you will transfer are not classified as “cashed in” when they are moved into your trust. This prevents you from having to report bond income on your income taxes.
For more tips and guidance on moving stocks or bonds into a trust, consult a dedicated Tampa estate planning attorney with BaumannKangas Estate Law.