Should You Put Stocks and Bonds in a Trust?

Should You Put Stocks and Bonds in a Trust?

Using trusts can help bypass probate—a process which can take several months or more. Most people hope to avoid sending assets through probate whenever possible. Did you know that you can put stocks and bonds in a trust for your heirs?

Generally, stocks and bonds can be transferred into a trust under certain procedures. Here is what you need to know about putting stocks and bonds in a trust:

Brokerage accounts and mutual funds

People generally hold stocks and bonds in brokerage accounts, in which a stockbroker holds your certificates and sends statements of account. Putting a brokerage account or mutual fund into a trust ensures that it automatically passes to your beneficiaries upon death, bypassing probate.

To put your brokerage account or mutual fund into a trust, talk to the managing financial institution about the procedural steps. Usually, this includes documentation of trustee powers and the trust documents or certification of trust.

Stock options and closely-held stock

Qualified incentive stock options (ISOs) and closely-held corporation stock (usually stock held by a few family members) probably should not or cannot be put into a trust. For ISOs, you may be able to give the trustee authorization to exercise the options in the event of your death—under certain time limitation.

For more information about stocks, bonds, trusts and bypassing probate, call the experienced estate planning attorneys at Baumann Kangas Estate Law in Tampa, FL today.