Here are some ways to transfer assets from one person to another.
Transfer on death (TOD) registration allows you to pass the securities you own directly to another person or entity upon your death without having to go through probate. By having a TOD registration, the executor or administrator of your estate will not have to take any action to ensure that your securities transfer to whomever you have designated.
However, TOD beneficiaries must take steps to re-register the securities in their names. This typically involves sending a copy of the death certificate and an application for re-registration to the transfer agent.
State law, rather than federal law, governs the way securities may be registered in the names of their owners. In addition, brokerage firms may decide whether or not to offer TOD registration.
For more information about TOD registration, please visit the website of the National Conference of Commissioners on Uniform State Laws. There you’ll find a summary of the Uniform TOD Security Registration Act, explaining how TOD registration differs from joint ownership. You’ll also find a list of the states that have adopted the Act and the full text of the Act.
If you hold securities in physical certificate form and want to transfer or sell them, you will need to sign the certificates or securities powers. You will probably need to get your signature "guaranteed" before a transfer agent will accept the transaction. Although it's an inconvenience to get your signature guaranteed, the process protects you by making it harder for people to take your money by forging your signature on your securities certificates or related documents.
Transfer agents insist on signature guarantees because they limit their liability and losses if a signature turns out to be forged. One way to avoid having to get your signature guaranteed is to have your securities held in street name, meaning that your securities are held in the name of your brokerage firm instead of your name.
An investor can obtain a signature guarantee from a financial institution -- such as a commercial bank, savings bank, credit union, or broker-dealer -- that participates in one of the Medallion signature guarantee programs. The three Medallion signature guarantee programs are the:
- Securities Transfer Agents Medallion Program (STAMP) whose participants include more than 7,000 U.S. and Canadian financial institutions.
- Stock Exchanges Medallion Program (SEMP) whose participants include regional stock exchange member firms, and clearing and trust companies
- New York Stock Exchange Medallion Signature Program (MSP) whose participants include NYSE member firms
Transfer agents can refuse to accept a signature guarantee from an institution that does not participate in the Medallion program or that is not recognized by the transfer agent. While guarantor firms can charge a fee for their services, they often don't and offer them as part of their customer services.
Contact Kemark Financial Services, Inc., the program administrator for STAMP and SEMP, at firstname.lastname@example.org if you have general questions about Medallion signature guarantees or how the Medallion program works. We are providing Kemark’s email address for information purposes only. We cannot endorse any commercial entity, and we do not endorse or recommend any of its products or services. For specific questions about a security, the Shareholder Services Department of the company whose shares you own, or its respective transfer agent, may be best suited to assist you.
If you hold stocks in physical certificate form and want to sell them, you will have to send the certificate to your broker or the company’s transfer agent to execute the sale. You probably will need to get your signature guaranteed. Once the brokerage firm has the stock certificates, the sell order can be executed.