Stock Power/More Info


Stock Power 
Additional Information
 
Stock Certificates 
An ownership interest in a corporation is reflected by a stock certificate issued by the corporation.  A stock certificate is presumptive proof that the person whose name appears on the certificate (or the holder, if the certificate is endorsed by the person named) is the owner of the stated number of shares. It is the books and records of the corporation, however, which control stock ownership questions for most purposes.  In other words, transfer of ownership is not effective until it is reflected on the issuing company's books. 

Companies may issue other kinds of securities, such as bonds.  Bond certificates are similar to stock certificates.  Bonds represent the issuer's promise to repay a debt, much like a promissory note.  Cities, counties and states may also issue bonds.  This Stock Power should also be accepted by bond issuers as well as issuers of other kinds of securities.      

Transferring Securities 
If a person dies owning a security, it becomes part of the decedent's estate and must be either sold or transferred to the new owners: the beneficiaries (based on a will or trust) or the heirs at law (based on state laws controlling distribution).  To make the transfer official, the records of the issuer must be adjusted to show the name of the new owner. 

Before it will make that transfer, the issuer (usually through a bank or other company acting as transfer agent) must ensure that the person requesting the sale or transfer is truly the new owner. A Stock Power is the written instruction to the transfer agent to sell or transfer the stock.   

Signing and Delivering 
When an owner is deceased, a Stock Power must be signed by all of the necessary parties. The necessary signers will likely come from one of three groups: 1) all of the heirs or beneficiaries, 2) the trustee of the trust established by the decedent, or 3) the person appointed by the Probate Court to settle the estate (an executor, administrator, or personal representative) for the estate of the decedent.   

Where the stock is owned by a living individual, the Stock Power need be signed only by the individual owner.  Remember that with stock held in a Living Trust, the Stock Power must be signed by the trustee on behalf of the Living Trust.  

The signature(s) must often be guaranteed by a bank or stockbroker. This is usually done by including a "Medallion Signature Guarantee"  from a bank official or a registered stockbroker.  This special kind of guarantee stamp will be provided only if all of the necessary parties sign the Stock Power in front of the banker or broker that will provide the guarantee. Contact the issuer to determine whether a signature guarantee is required.   

The Medallion Signature Guarantee is different from a Notary Public Seal.  A notary's acknowledgement will not satisfy the issuer in most cases. Issuers and brokers require the Medallion Signature Guarantee as protection from unauthorized transfers of stocks and bonds, and to verify the identity and authority of the person signing.  

When completed, a copy of the Stock Power is normally transmitted to the issuer with the certificates to be transferred.  The firm designated as agent to complete the transfer will normally complete this task.  It is now common for a brokerage firm to hold stocks and bonds in its "street account"  for the benefit of the owner.  If the securities are held in a street account, contact the brokerage firm to find out how to compete this form, or request their form. 

Other Documents 
The issuer will also likely require other documents to substantiate other matters.  First, if there is an executor or other court appointed fiduciary, you will probably need to supply "Letters of Appointment", the court document formally appointing the fiduciary.  If no fiduciary was appointed, the entire set of necessary beneficiaries may be required to provide an "Affidavit of Heirship."  To ensure that tax obligations associated with the transfer have been satisfied, an "Affidavit of Domicile" may be necessary to formally advise the issuer which state has the power to tax the estate.  Then, an "Inheritance Tax Consent" from that state's tax division will be necessary to certify that the death tax obligations, if any, have been paid. 

For securities held by a trust, you will likely need to supply a copy of the trust instrument. 

If the stock or bond certificate is lost, you will likely need to sign an "Affidavit of Lost Securities."