In this article, we explain how to transfer stocks and bonds after someone dies. We also answer the questions, "How to determine what stocks and bonds the decedent owns", "How to determine whether stocks and bonds should be part of a probate estate", as well as How to transfer sticks and bonds after someone dies", and "What if you can't find stock certificates and bonds when someone dies."
One of the responsibilities of an executor or estate administrator (collectively known as the “personal representative” of the estate) is to collect the assets of the deceased individual (“the decedent”) and disburse those assets to creditors and beneficiaries of the estate.
How to Determine What Stocks and Bonds the Decedent Owned
In order to determine what stocks and bonds the decedent owned, the personal representative should check the decedent’s personal files, safe deposit box, and mail for the following:
- Physical stock and bond certificates;
- Statements from financial institutions such as banks, brokers, and advisors showing stock or bond ownership; and
- Statements from corporations showing that the decedent owned corporate stock.
If the decedent possessed physical stock certificates and bonds, the personal representative should compare the values of the certificates you have located against interest statements from the companies to ensure that you have found all of them. See below to find out what to do if some are missing.
How to Determine Whether Stocks and Bonds Should Be Part of a Probate Estate
The manner in which a stock or bond (or stock or bond account) is registered determines whether the stock or bond should be included in the decedent’s probate estate. To learn more about probate generally, check out our article: The Illinois Probate Process Explained.
- Stocks and Bonds Owned by a Trust: Instruments or accounts registered to a trust will generally be administered through the trust and not included in the probate estate.
- Stocks and Bonds that are Jointly Owned with Rights of Survivorship: If a stock, bond, or investment account is jointly owned with rights of survivorship, the instrument will not go through probate, but will instead transfer directly to the surviving owner.
- Stocks and Bonds With Transfer-on-Death Designation: If the stock, bond, or account is registered with a transfer-on-death designation to a living beneficiary, the instrument will pass to this beneficiary without going through probate.
- Stocks and Bonds that are Jointly Owned Without Rights of Survivorship: If a stock, bond, or account is jointly owned with another person, but no rights of survivorship are indicated, half of the value of the instrument will go to the surviving owner, while the other half will go through probate.
- Stocks and Bonds that are Owned in the Decedent’s Name: Stocks, bonds, and accounts that are owned exclusively in the name of the decedent will go through probate, unless a probate case is not required, in which case the instruments will pass to the beneficiaries of the estate via small estate affidavit. To learn more about this, check out: When is Probate Required in Illinois?
How to Transfer Stocks and Bonds After Someone Dies
If decedent’s stocks and bonds are held in an investment account by a financial institution, the process of transferring the account to the estate or to the name of a beneficiary is fairly simple. The personal representative should contact the financial institution and determine what forms and documentation the institution requires. This will usually consist of the financial institution’s internal transfer form, the Letters of Office issued by the probate court or Small Estate Affidavit if probate is not necessary, and a certified death certificate.
If the personal representative finds physical stock and bond certificates of a private company, the personal representative should first determine the transfer agent of the company. This can usually be found online or by calling the company’s investor relations department. The personal representative will then generally be required to provide the following documents to the transfer agent:
- The original stock certificate;
- Letters of Office;
- Certified death certificate;
- Affidavit of Domicile;
- Power of Assignment;
- Letter of Direction;
- A W-9 Form form the individual receiving the certificate.
Savings bonds, which are issued by the government rather than a private company, follow a different process. You can find the forms necessary to transfer savings bonds here.
Even if stocks and bonds are required to go through the decedent’s probate estate, the decent has the option to either transfer the instruments to the estate and then from the estate to the beneficiaries or, alternatively, to transfer the instruments directly to the beneficiaries while recording the value as part of the estate. Which option makes sense depends on the complexity of the estate, the number of stocks and bonds, and how many beneficiaries are involved.
What if You Can’t Find Stock Certificates and Bonds After Someone Dies?
If the decedent possessed physical stock certificates and bonds, but the personal representative is unable to locate them, he or she should contact the transfer agent who will provide the forms required to obtain a new certificate.
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