Can Stock in a Cooperative Be Passed to Your Beneficiaries When You Die?

By Andrine Redsteer

Stock in cooperatives, or co-ops, may generally be passed to beneficiaries after death through a living trust or a will. However, cooperative ownership differs from other types of real estate ownership in that tenants own shares, or stock, in the co-op. Co-op boards have rules and regulations specific to each co-op, and the board may need to approve of share transfers depending on the lease terms or other circumstances.


When a tenant buys into a cooperative, he purchases a percentage of shares, or stock, in the corporation that owns the building. The tenant does not own his unit outright; rather, he is simply leasing it from the corporation. This arrangement may lead to tight restrictions regarding what a tenant may do with his shares. Generally, co-op boards may apply their own particular standards regarding which prospective tenants to deny or accept. Furthermore, co-op boards generally require current tenants to obtain permission before transferring a lease and often wish to interview prospective tenants to gather income information, as maintenance fees are required.

Passing Stock Via a Living Trust

A living trust is an arrangement where assets, such as co-op shares, are transferred into the trust so that property may be managed under one document. The trustee of the trust manages the property in the trust. It may be possible to transfer co-op shares to beneficiaries via a living trust. However, each co-op board has different restrictions and may place conditions on transfers. Depending on the co-op board, a current shareholder may be required to seek the board's approval before transferring shares to beneficiaries via a living trust. Additionally, a co-op may require tenants to be actual shareholders in the co-op. In this case, if the shares were transferred to a living trust and not a person, it may violate that provision in the co-op requirements.

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Passing Stock Via Will

Stock in a co-op may be transferred upon death via a last will and testament. A transfer of co-op shares via a will may still need to be approved by the co-op board after the testator's death. However, many co-op leases include terms stating that the co-op board will approve transfers to family members such as surviving spouses, children, parents and siblings. Although co-op boards generally respect the transfer to beneficiaries, if the board does not approve of the beneficiary moving in, he may be able to sell his shares to another individual or back to the co-op.


Because transfers of co-op shares are generally subject to the co-op board's approval, a tenant may wish to speak the board about how he plans to pass his shares upon death prior to moving into the co-op. Seeking the board's approval of the transfer method and beneficiaries before moving in may avoid complications and save time. Prospective tenants may also look to their co-op lease to determine whether there are terms indicating that the board will not withold approval of transfers to certain beneficiaries upon the tenant's death.

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