Stock certificate IN HAND soap box

[Richard]

One of my sermons to folks I deal with (especially if older) is to ALWAYS ALWAYS put/keep your stock certificates in your stock account and NOT in your hands in certificate form.

Though there are a couple reasons why one may want to keep stocks in certificate form, my feelings and contention is that the "risks" and downsides outweigh any perceived benefits.

Example: (real life one) Once had man come into office, had recently dealt with the passing of his mother. He handed over approximately 16 different stock certificates. Some in her name, some joint with her and him, some joint with her and father. Long story short...it took maybe 6 MONTHS before we were finally able to iron out all the kinks and get all the certificates in his name alone.

Here in Tennessee, if your executor walks in with your stock certificate to deposit..they need, I believe, to bring a Tennessee Tax waiver, court certifed letter of testementary LESS than 30 days old, sign a stock power (or certificate itself) and a letter of instruction as to depositing the certificates.

A copy of this is needed for EACH different stock you have. If you have 50 certificates of General moters, we need one set of the above. If you have 50 certs of different companies, we need 50 sets of EACH of the above...50 letters of testementary, 50 stock powers.

If you have 50 stocks held INSIDE a stock account, then ONE set of the above paperwork will suffice to convert the entire account to estate.

If you want to really "get" the executor of your estate...then have many many stock certificates of different companies. Let them clear it up...if on the other hand, your child is your executor and you prefer to make an emotionally distressed time easier for them, then do them a BIG favor and clear it up while you can sign yourself and put them on deposit.

Situation #2: Loss of certificate

If you have 1,000 shares of $40 stock and LOSE the certificate...fire, theft...memory.. you can apply to have the certificate replaced by the transfer agent. They will charge typically 2% of current market value (in this case $800) to replace your certificate. The charge is used by them to pay for a surity bond..such that if a crook were to forge your signature and try to liquidate the shares (and in fact is successful on receiving the money) the surity bond reimburses the transfer agent for essentially, paying the stock out twice.

If this happens on one certificate..fine..but what if you are the one that has the 50 different certificates? It can really start to add up.

Off my soap box now. Sorry to "preach" but I have seen people so many times in the emotional duress of dealing with an estate have their stress magnified because of having to also deal with these issues. It CAN be made much easier on your loved ones...and indeed..in case of lost certificates..yourself.

Just my .02 for those who care, and may have exposure here.
Richard

 

[snowman]

I agree.

I always advise people to keep everything in their brokerage account.

It helps alot when theyhave a stock that's merged, etc. or has split. I had one person in my office whose mother is fading away. She went through her mother's records to try and straighten things out. One item was an old oil stock that had been taken over (and then again, if I recall). The mother had the paperwork to make the exchanges with the share certificates, but never did. Some of the exchange offers had deadlines on them, which were way past due. I have no idea if she was successful in obtaining new share certificates.

It is also beneficial for dividend collection, in that everything automatically gets deposited into the brokerage account if it's in the street name.

I search the NYS unclaimed funds database about twice a year. It's incredible (to me) the lists of unclaimed dividend checks that I'll see pop up under one person's name. No one misses them, and the state gets the money.

 

[JimmyO]

Snowman,
Who is your B/D? I happen to be a wholesaler that covers the area you are in. Not likely that we have a selling agreement with your firm as we have hardly tapped the NY market. But if so it would make a good excuse to meet somebody from the board.

Jimmy O

 

[snowman]

I'm an accountant.

My experience/advice comes from many years of dealing with clients, many of whom don't have a clue as to what they're doing when delaing with supposedly simple things like this.

I don't mean that in a mean way. More from the standpoint that they worked hard to get the money to invest, then don't "take care of it" as easy as they could with what's available out there.

 

[Richard]

Well said Snowman

Richard

 

[JimmyO]

I agree 100% with the advice that you gave. I happened to infer incorrectly that you had your securiteis license which is why I was asking who your broker dealer was. My job involves meeting with registered reps to discuss/teach about the investment oppurtunities that my company offers. If it was possible to do that with somebody that shared my same interests, that would have been great, I certainly was not questioning your advice and if I insulted you I apologize.

Jimmy O

 

[snowman]

Thay's okay...I didn't take offense to anything you said. I could tell that you thought I was a broker or CFP; just letting you know what I do.

 

[Rch]

<A target="_blank" HREF=https://www.gainskeeper.com/default.asp>https://www.gainskeeper.com/default.asp</A>
Richard, I found your comment interesting re Stock Certificates. The above site keeps track of splits and mergers in a portfolio plus schedule D and short/long term capital gains. It seems to me the best internet portfolio tracker around but this isn't my area of expertise. I'd be interested in your comments. It used to be free until last year. Now it is $30/ yr for the bare bones edition.

 

[JimmyO]

Just wanted to make sure that I didn't offend you. Actually one of the things I do is conduct CE seminars for CPA's. However like I said I haven't really started working with any of the brokers in your neck of the woods yet so it isn't likely that I will be doing any seminars there in the near future. Have fun in the upcoming months and try to get some sleep during the first half of April.

JimmyO

 

[Richard]

RCH,

I just went to the gainskeeper site and piddled around some. I in fact was not familiar with it and after probably 2 minutes, felt it was very interesting, and probably very helpful.

Given my brief exploration, I noticed a reference where one of the bd's will download automaticaly..that said..do you have to put your trades in manually? Or are all of them somehow available with automatic download?

One of my first (possibly unwarranted) thoughts/concerns is if I was using it..would I want some third entity having access to my financial dealings... I really liked the automated scheduel D though...(hmmm...tradeoffs)

I have made a spreadsheet in Excel. I made it probably 12 years ago, obviously, prior to this type thing being available. On a line by line basis, you have to input your purchase. After doing so, it will give you gains/losses (realized/unrealized) in dollars, percent..time owned, will handle options... It's simple I suppose, but I had no idea how to use Excel when I created it. In fact, it was what I cut my teeth on. One thing I have liked about it..if you in fact, keep it up to date, it will act as a historical documentation of ALL your trades back from day one.

Richard