With a growing understanding of the probate process, trusts, and inheritance, more people than ever are planning ahead to ensure that their assets are protected and properly distributed after their death. However, even the best planning can sometimes be incomplete. Whether the deceased obtained new assets since their planning or simply overlooked something, understanding what happens to it is important. Stocks are one such example. What happens to a deceased individual's stock certificates if they forgot to put them into a trust or otherwise designate their dispensation? Here's what you need to know.
Stocks Don't Necessarily Need To Go To Probate
You might think that your loved one's stocks are going to have to go to probate if their beneficiary designations aren't up to date and they were overlooked in the estate planning process. While this may be true, and certainly would be with many assets, this isn't necessarily the case with stocks. There are certain situations where the stocks may automatically be reassigned to a beneficiary without probate.
Stocks Must Be The Only Asset In The Deceased's Name
In order to keep the stock out of probate, there must be no probate process already started for the estate. That means that the stock must be the only asset left in the deceased individual's name. Provided that all of the other assets have been properly assigned through trust designation or other dispensation, you may be able to have the stock ownership transferred without probate.
The Estate Must Be Under The Probate Limit
In order to keep the stocks out of probate and simply transfer their ownership, the total value of the estate, in this case, the stocks, must be under the probate limit. This limit varies by state and can be adjusted year to year, so you will want to check with a probate attorney about that limit to determine if your loved one's stock value is low enough to qualify for avoiding probate.
There Is A Waiting Period
Before you can have the stocks transferred to the beneficiary's name, you must wait for the transfer waiting period to complete. This is usually one month after the death, but it may vary from state to state, so you'll need to check with your probate attorney about the eligibility period.
A Statement Is Required
The beneficiary must sign a sworn statement attesting that the deceased's stocks meet all of the qualifications above. That statement must be signed under oath. Once signed, the stock certificates can then be transferred to the beneficiary as the new owner.