What Is the Procedure to Transfer Stock From a Deceased Owner to a Beneficiary?

By Bryan Driscoll, J.D.

What Is the Procedure to Transfer Stock From a Deceased Owner to a Beneficiary?

By Bryan Driscoll, J.D.

When a person dies, their executor or personal representative has many duties, one of which is ensuring all heirs receive their distribution of assets according to the will.

Part of that distribution often involves transferring stock. As an executor of the will, you will have the authority to make this transfer. But each bank and brokerage may require you to take certain steps before doing so.

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Transfer on Death

The easiest type of transfer to make is one that doesn't even involve you as the executor. Most banks and brokerages provide for an account holder to name a beneficiary of the account, referred to as a transfer on death beneficiary.

This process takes place the moment the account holder dies. The entire account transfers to the individual named as the transfer on death beneficiary. But if the decedent wants to transfer individual stocks held within the same account, transfer on death beneficiary status will not work and will require you, as the executor, to take additional steps.

How to Transfer Individual Stocks

Many years ago, when a person purchased shares of stock in a company, they received a paper certificate showing how many shares they owned. When the individual wanted to sell or transfer their shares of stock, they would simply sign the certificate over to another individual. In today's electronic-focused world, we no longer use paper certificates, but we are still required to sign over the shares of stock whenever a transfer is made.

When the decedent's will is entered into probate and the probate process is underway, one role of the executor is to transfer assets, including stock.

1. Locate the bank.

The first step in transferring stock to an heir is to locate the bank holding the account. This may be a traditional bank, an online bank, or a brokerage firm.

If the decedent did not leave detailed information about where their accounts were held, this could be a time-consuming step for you. Your best bet is to review all bank statements and note which bank(s) hold the accounts.

2. Communicate with the bank.

Now that you have located the bank holding the account, you must let them know the account holder has died. Each bank and brokerage may have different procedures for notifying them, which is why it's important to contact them first before sending them any documentation.

Aside from providing the bank with documentation regarding the account holder's death, the bank will also require you to complete transfer of ownership forms. To complete these forms, you will need detailed information about the heir, such as:

  • Full legal name
  • Address
  • Social security number

3. Transfer the stock.

After you have completed the bank or brokerage's transfer of ownership forms, you need to return them to the bank. You also must provide the bank a copy of the will to show the decedent wished to transfer that stock to the person named on the form.

When the bank or brokerage receives this paperwork, they will review it for accuracy. If they determine the transfer is what was requested in the will and the transfer of ownership forms were completed accurately, they will transfer ownership of the stock to the heir. They will provide notice to you as the executor and to the heir once this process is complete.

Handling the loss of a loved one is hard enough. Dealing with the complexities of the probate process and handling the transfer of stock to an heir can be downright daunting. This process can be stressful, and you don't have to do it by yourself. There are experienced probate attorney out there who you can consult with to relieve some of the stress.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.