How to Add Stocks to a Grandchild's Trust
Original post by Cynthia Gomez of Demand Media
A trust allows you to transfer assets -- including stocks -- to your grandchildren upon your death. You appoint a trustee to administer the assets according to your wishes. Putting stocks, which can yield big gains over time, into a trust fund can help you ensure that your grandchild’s financial future is secure. This is not as difficult to do as you might think.
Find your stock certificates for the stocks you want to add to the grandchild’s trust. Sign them in the designated spot and place them in an envelope to your broker.
Get a stock power form from your broker. This allows you to transfer ownership of the security. Fill out the form by placing your name and the name of the new owner, the name of the company whose stock is being added to the trust, and finally the number of shares being added. Sign the form.
Print a copy of the grandchild’s trust. You’ll need to include this document with your stock certificates.
Type a letter explaining that you plan to transfer the stock to your grandchild’s trust. Include this letter with everything else to be sent.
Ask your broker whether she requires any other documents. Depending on how many shares are being added, you might need a transfer of stock ownership form. And depending on your broker, you might need to send in a copy of the grandchild’s birth certificate.
Send everything but the stock power together to your broker. Send the stock power separately for added safety. Use registered mail to ensure your paperwork isn't lost. Wait until it’s received and the stocks are deposited into your account.
Open a new brokerage account. This one will be in the trust’s name, not yours. Then simply transfer the stocks for which you have signed stock certificates and stock power forms into the trust account.
Request that your broker reissue you stock certificates. The new certificates will be in the trust’s name.
- BNY Mellon: A Guide for Transferring Stock
- Dummies: How to Transfer Cash and Securities into a Trust: Margaret Atkins Munro et al
- Lawyers.com: Putting Stock into a Trust
About the Author
Cynthia Gomez has been writing and editing professionally for more than a decade. She is currently an editor at a major publishing company, where she works on various trade journals. She also spent many years working as a newspaper reporter. She holds a bachelor's degree in journalism from Northeastern University.
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