assignment of shares to trust

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• Trusts And Estate Planning
• Guide For Transfer Of Assets To A Revocable Living Trust

This memorandum has been prepared to provide you with some general information and to describe what should be done to transfer assets to yourselves as trustee(s) of your revocable living trust, or prepare beneficiary designations.

Why Transfer Assets To Yourselves As Trustees?

Objectives of the trust, including avoidance of probate administration upon your death, will be defeated if title remains in your name. Therefore, a formal transfer of title is essential.

What ‘Name’ Should Be Used?

We suggest that the title to trust assets be held by the trustee(s) in substantially the form set out in the following examples:

Co-Trustees: “John Jones and Mary Jones, Trustees of The Jones Trust dated January 1, 2009”.

Single Trustee: “Mary Jones, Trustee of The Mary Jones Trust dated January 1, 2009”.

Some institutions with whom you may deal (for example, brokerages and banks) may wish to use a different sequence of words in the trust name, or abbreviations, such as:

“John Jones and Mary Jones, Trustees UTA dtd 1/1/09”.

“Mary Jones, Trustee UTA dtd 1/1/09”.

Our discussions may refer interchangeably to transfer to “the trust” or “the trustee(s)”. In fact, legal title must include the names of the trustee(s) and the trust. A deed granting title to “The Jones Trust dated January 1, 2009” with no reference to the trustee(s) is not valid.

Taxpayer Identification Number

A revocable trust does not pay taxes. For federal and California income tax purposes, the assets in the trust are treated as belonging to you. If you file income tax returns and report trust income on your returns and if you are the trustee of your trust, the Internal Revenue Service and the California Franchise Tax Board do not require a separate tax identification number for your revocable trust.

When transferring assets, or when dealing with banks, stock transfer agents or other payors of income, you will be asked to supply a “taxpayer identification number” for the trust. You should use your social security number as the trust’s taxpayer identification number. Where a trust has been created by a husband and wife, either trustor’s social security number can be used.

Your Residence

If your residence is to be held as an asset of the trust, we recommend that you transfer title to the residence to your name(s) as trustee(s). If your residence is a cooperative or condominium apartment, we will advise you how to effect the transfer.

If title to your residence is to be transferred into the trust name, please give us a copy of the current deed to your residence containing the “legal” description of the residence and the assessor’s parcel number. We will prepare a new deed showing you as the grantor(s) and the trustee(s) of the trust, in the form suggested on page 1, as grantee, and we can then arrange to record the new deed. Under current law, transfers of property to a revocable trust will not result in reassessment of the property and we will file with the assessor the necessary form claiming this exemption.

Other Real Property

If you own other interests in real property you should consider including those interests in the trust. You must sign a deed for each separate real property interest that you transfer to the trust. Please supply us with copies of current deeds to these properties.

Checking Accounts

Because of possible inconvenience, we do not recommend changing the name of your day-to-day small checking accounts. If the total assets you retain outside the trust are less than $100,000, California law permits transfer after death by “declaration” and without formal probate.

Savings Accounts

We recommend that your savings accounts be held by the trustee(s) of the revocable trust. Any bank or savings and loan association savings account or certificate of deposit should be transferred to the name of the trust in the form suggested on page 1 of this memorandum. You should discuss transfer of these accounts directly with the depository institution who will complete its internal paperwork for you.

Securities Accounts

You should register any securities account in the name of the trust, as suggested on page 1 above. You should talk directly with your broker who will prepare a new account agreement for your signature.

Marketable Securities Not Held In Brokerage Accounts

Any securities not held in a brokerage or custody account should be re‑registered in the name of the trust in the form suggested on page 1. To transfer any stock certificate which you hold, you are generally required to submit the stock certificates, along with an executed assignment (either on the reverse of the certificate or an Assignment Separate From Security) with your signatures guaranteed by your stockbroker or bank, to the transfer agent with instructions to reissue the certificate to the name of the trust.

Securities In Closely Held Companies

To transfer to the trust any shares of stock in a closely held company which is now held in your name(s), you should instruct the secretary of the corporation to issue new certificates in the name(s) of the trustee(s) in the form suggested on page 1. Existing certificates should then be cancelled.

Investments In Partnerships

Some partnership agreements may not permit an investor to transfer his or her partnership interest to a trust that the investor has created. If you are considering the transfer of any partnership interest to your revocable trust, you may want us to examine a copy of the partnership agreement and any amendments to the agreement to determine whether a transfer is permitted. If the partnership agreement permits the transfer, you then sign an Assignment of Partnership Interest, which we can prepare. Some partnerships also impose a fee for a transfer. It may also be necessary for the partners to sign a consent to the substitution of the trust as a partner.

Beneficiary Designation Assets

Certain assets such as life insurance, retirement plans and accounts, and annuities pass under beneficiary designation forms filed with the respective companies rather than under your will or trust.

Life Insurance Policies

It is not necessary to transfer ownership of life insurance policies to a revocable living trust. Life insurance proceeds are not subject to administration in a probate estate when a beneficiary other than one’s “estate” is named on the beneficiary designation form filed with the life insurance company. It may be satisfactory to retain your current beneficiaries (so long as your “estate” is not your beneficiary), or you may wish to name the trustee as beneficiary. We recommend that you discuss with us the appropriate beneficiary.

To change the beneficiary designation on personally owned life insurance policies, you may write to the company and ask for “change of beneficiary” forms, or you may ask your life insurance agent to handle the changes.

Employee Benefits And Retirement Plans

We recommend that you discuss with us the choice of a beneficiary of the proceeds of retirement type accounts, including Individual Retirement Accounts, Keogh plan accounts, 401(k) accounts, company pensions, deferred compensation accounts, and other retirement accounts. The employed spouse should generally name the other spouse as the primary beneficiary and other individuals, such as children or the trust as contingent beneficiary; if the trust is so named, the account can be made payable to the trustee(s) in the form suggested on page 1 of this memorandum. The law currently requires strict compliance with the formalities of signing certain types of beneficiary designations. Income tax consequences vary depending on the beneficiary designation. In particular, naming the trust as beneficiary of an IRA or other retirement type account can have adverse tax consequences. We strongly recommend that you discuss the beneficiary designation with us or other tax advisors.

Annuities also pass under beneficiary designations rather than under your will or trust. These beneficiary designations are tax sensitive, so please discuss these with us or your other tax advisors.

We hope that the above information is helpful to you. Please let us know if we can be of any help in transferring your assets to your revocable trust or preparing beneficiary designations.

Practice Areas

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How to Transfer Corporation Shares into a Trust

Need some help?

Are you an executor or trustee, want to get organized, want to offer estate planning, need a will or trust.

Transferring corporation shares into a trust is an effective way to manage and protect your assets, both in your lifetime and beyond. The process involves several steps, which, although complex, can provide significant benefits in terms of tax advantages, asset protection, and estate planning. This blog post will guide you through the process of transferring corporation shares into a trust.

Understanding Trusts

A trust is a legal arrangement where a trustee holds and manages assets for the benefit of a third party, known as the beneficiary. Trusts can be classified broadly as revocable or irrevocable, with each offering unique advantages. Trusts not only provide a means to manage your assets but also offer legal protection and can help avoid the lengthy and costly probate process.

Why Transfer Corporation Shares into a Trust?

There are several reasons to transfer corporation shares into a trust. It can provide a mechanism for seamless succession planning, ensuring the shares are managed according to your wishes after your death. Additionally, it can offer potential tax benefits and protect the shares from creditors. It also avoids the probate process, saving time, money, and maintaining privacy.

Setting Up a Trust for Corporation Shares

• Choose the type of trust: Depending on your goals, choose between a revocable trust, which can be altered or canceled, or an irrevocable trust, which cannot be changed without the consent of the trustee.
• Select a trustee: This individual or entity will manage the trust's assets. Choose someone you trust and who is competent to handle financial matters.
• Create the trust document: This outlines the terms of the trust, such as the beneficiaries and the trustee's responsibilities.
• Fund the trust: This involves transferring your assets, in this case, corporation shares, into the trust.

Transferring Corporation Shares into a Trust

• Verify share transferability: Some shares have restrictions on their transferability. Thus, it's vital to verify if your corporation's bylaws or shareholder agreement allow for such transfers.
• Prepare a stock assignment: This document transfers the shares from your name to the trust. You'll need to sign this in the presence of a notary public.
• Update the corporation's stock ledger: The ledger should reflect the trust as the new owner of the shares.
• Issuing a new stock certificate: The new certificate should be issued in the name of the trust.

Seeking Professional Help

Given the complex nature of transferring corporation shares into a trust, it's advisable to seek the help of an experienced attorney or financial advisor. They can guide you through the process, ensure all legal requirements are met, and provide advice on potential tax implications.

Transferring corporation shares into a trust is a significant step in asset management and protection. While the process may seem daunting, with the right guidance and careful planning, it can offer you peace of mind and substantial benefits.

Get a plan, get Snug.

A DIY guide to transferring assets into a living trust

You may have established a living trust, but it's not functional until you transfer ownership of your assets to it.

Find out more about Living Trusts

by   Brette Sember, J.D.

Brette is a former attorney and has been a writer and editor for more than 25 years. She is the author of more than 4...

Read more...

Legally reviewed by   Deborah R. Bronner

Deborah is an attorney whose law career has spanned more than 30 years. Since the 2008 mortgage crisis, she...

Updated on: May 17, 2024 · 8 min read

Key takeaways of a living trust

Understanding the benefits of a revocable living trust, preparing to transfer your assets, transferring real estate into your living trust, assigning financial accounts to the trust, ensuring personal property is included, business interests and your trust, overlooked assets and uncommon considerations, regular review and updating of your living trust, frequently asked questions.

Need to transfer assets to a living trust ? This guide provides detailed, practical steps to re-title your assets and secure your estate’s future: Learn exactly how to transfer assets to a living trust, avoiding any unnecessary confusion or legalese.

• A living trust is beneficial for avoiding probate, maintaining privacy in asset distribution, and providing long-term savings by minimizing legal and probate-related expenses.
• Assets must be carefully prepared for transfer into a living trust, requiring an inventory of assets, legal ownership changes, and coordination with financial institutions and insurers.
• Regularly reviewing and updating your living trust is crucial to ensure it reflects current life circumstances and asset distributions remain aligned with your intentions.

A revocable living trust is a legal mechanism that allows the transfer of assets to a trustee for management and eventual distribution to beneficiaries upon death or at a designated time. This process bypasses the often-time-consuming probate process, thereby maintaining confidentiality in asset distribution and offering asset protection.

Although the initial expense of establishing a living trust exceeds that of creating a will, it can result in substantial long-term savings through minimizing or eliminating costs associated with:

• other related expenses

Investing in the establishment of a living trust is a pivotal move in creating a comprehensive estate plan, ultimately ensuring the preservation of your assets’ value for your heirs.

Before you can enjoy the benefits of a living trust, there are necessary steps to take to prepare your assets for transfer. It’s crucial to classify your assets into four primary types:

• Real property
• Cash accounts
• Financial instruments
• Tangible personal property

To transfer ownership of these assets requires a change in legal ownership from your own name to the trust’s name, effectively funding the trust.

Before beginning the process of transferring assets into a living trust, it’s vital to compile a detailed inventory of all assets intended for the living trust to avoid any oversights during the transition.

Moving real estate into your living trust is an integral part of the asset transfer process. This can be accomplished through the use of a deed, such as a quitclaim or warranty deed, which should be executed and recorded properly. Moreover, consulting with a title insurance company to verify the accuracy of the deed transfer is vital.

Deed preparation and execution

The process of transferring real estate to a living trust begins with deed preparation. This process includes locating the current property deed, preparing a new deed, obtaining notarization for the new deed, and ultimately submitting the new deed to the relevant recorder's office for filing. If the property is part of a homeowners association, or if there’s a mortgage on the property, you may also need to obtain permission from the respective parties.

Coordination with mortgage lender and insurance company

Alongside deed preparation and execution, coordinating with your mortgage lender and insurance company is a critical component of transferring real estate to a living trust. This coordination is essential to ensure proper documentation and coverage. It’s advisable to proactively seek approval from the mortgage holder before proceeding with the transfer.

Failing to inform a mortgage lender about transferring real estate into a living trust could potentially activate the acceleration clause, prompting the lender to demand immediate repayment of the mortgage. It’s also advisable to reach out to your insurance agent or broker, who will guide you through the process and provide any required documentation or information. Transferring a home into a living trust generally does not impact the homeowner’s insurance policy, but it’s crucial to add the trust as an ‘additional insured’ on the policy to ensure continued protection for the property.

Assigning financial accounts to the trust constitutes another vital step in the process of transferring assets to a living trust. This includes:

• Bank accounts
• Brokerage accounts
• Health savings accounts
• Other financial instruments

Bank accounts and brokerage accounts

Financial assets such as investments, bank accounts, money market accounts, or stock certificates can indeed be transferred to a living trust. This process involves reaching out to the relevant institutions and fulfilling any necessary paperwork. For instance, transferring bank accounts to a living trust involves either closing the current account and reopening a new one in the name of the trust or, in the case of CDs, waiting for them to mature and using the funds to open a new CD in the trust’s account.

Similarly, transferring a safe deposit box to a living trust can typically be accomplished without the necessity of closing and reopening the box. If your bank requests copies of the trust documents prior to opening accounts in the name of your trust, it is advisable to furnish the required copies to ensure compliance with the bank’s policies.

Handling retirement and medical savings accounts

Retirement and medical savings accounts have specific rules and restrictions when it comes to being transferred into living trusts. Transfers of individual retirement accounts may be treated as distributions by the IRS, potentially resulting in income tax obligations on the transferred amount.

The process of transferring retirement accounts into a living trust can be intricate and may not be suitable in certain circumstances. It is prudent to seek guidance from an estate planning attorney before proceeding.

It is generally not recommended to transfer retirement accounts such as 401(k), IRA, 403(b), and certain qualified annuities directly into a living trust. This is due to potential tax implications and complex regulations associated with these accounts. 

The inclusion of personal property in your living trust is equally important as the transfer of real estate or financial accounts. 

Specific items and general assignments

Personal property can be transferred to a living trust by specifically naming the items in the trust document and indicating that their ownership is being transferred to the trust. This includes categories of personal belongings such as:

• collectibles
• other tangible personal property

A general assignment within a living trust involves the transfer of ownership of a wide range of personal assets into the ownership of the trust. This allows for the inclusion of assets without title documents or assets that were not retitled, ultimately helping to bypass probate for those assets and ensuring they are governed by the trust.

Transferring business interests to a trust can be beneficial for a variety of reasons, including alleviating your family from the responsibility of your business debts and potentially minimizing the tax liability on your estate. Nevertheless, reviewing relevant business documents for guidance and transfer limitations, such as partnership agreements, operating agreements, or articles of incorporation, is crucial.

The process for transferring a business name between interests varies depending on the type of business. Here are some examples:

• Transferring a partnership interest to a living trust may require obtaining approval in accordance with the terms of the partnership agreement or operating agreement.
• Transferring business interests from an LLC owner to a living trust typically involves obtaining approval from a majority of owners.
• Transferring a sole proprietorship into a living trust is usually straightforward as business assets are typically in the owner’s name, providing protection for the family from business liabilities.

Estate planning involves considering all types of assets, including those that are often overlooked or uncommon. Examples of commonly overlooked assets and less typical considerations include funeral trusts , sub-trusts for specific family scenarios, and different types of trusts, such as children’s trusts and generation-skipping trusts.

When planning your estate, it’s important to consider whether to designate a trust as the primary or secondary beneficiary for accounts with beneficiary designations, such as savings accounts. This ensures that the assets within these accounts are properly managed and distributed according to the terms of the living trust.

The process doesn’t end once your living trust is established and funded. Continually reviewing and updating your living trust is necessary to keep it current and effective, responding to life events and changing circumstances.

It is advisable to review your trust at least annually or following any major life events such as:

• the birth of a child
• the death of a beneficiary

Changes in circumstances, such as shifts in your financial landscape or family dynamics, require revisions to the trust to accurately reflect your current situation and intentions for your estate.

The creation and maintenance of a living trust can be an effective strategy to ensure a smooth transition of your assets to your beneficiaries. Whether it’s real estate, financial accounts, personal property, life insurance policies, or business interests, a living trust provides a comprehensive solution for managing your estate. However, it’s vital to remember that this is an ongoing process that requires regular review and updates in response to life events and changes in circumstances.

How are assets transferred to a trust?

Assets can be transferred to a trust through methods like a deed of grantor(s) to trustee(s), title transfer, assignment of ownership, opening new accounts, naming the trust as a beneficiary, and more. Transferring assets to a trust can be done through various legal means, providing flexibility to the grantor.

What assets should not be in a trust?

You should not put assets like retirement accounts, health savings accounts, life insurance policies, and vehicles in a trust. These types of assets generally have cash value and should not go into a living trust.

What are disadvantages of putting property in trust?

Not all trusts offer protection for other assets from creditors, as revocable trusts do not protect assets from creditors.

Are transfers to a trust taxable?

Transfers to a trust are not subject to income tax, including gifts to trusts and distributions of principal from trusts to beneficiaries. The gift tax and estate tax are the transfer taxes relevant to trusts.

What are the benefits of a living trust?

A living trust offers benefits such as bypassing probate, maintaining privacy, providing asset protection, and potentially offering tax benefits. Consider setting up a living trust to take advantage of these benefits.

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A General Assignment of Assets to one’s Living Trust can help avoid a Probate.

                 Re-titling assets, like stock and bonds, from one’s name into one’s living trust is necessary to avoiding an unnecessary probate of such assets if held outside of the trust.   Sometimes people fail to transfer some or all of their intended trust assets into their trust.   A general assignment of assets to one’s living trust provides an important safeguard. Let’s examine what a general assignment is and how it helps to fund one’s trust and avoid a probate with the help of a Lake County probate attorney:

                A general assignment of assets transfers ownership on a wide variety of assets as the name implies.   An all encompassing general assignment is regularly used by estate planners to transfer all types of financial assets (excluding tax deferred retirement accounts) and personal property (such as the contents of one’s home) into the trust. It is a half-step towards actually re-titling the securities and the financial accounts into the name of the trustee.   Nevertheless, the settlor should still proceed to contact the banks, brokerages, and stock transfer agents (as relevant) to formally transfer legal title into the name of the trustee.   But, in the event that the formal legal title is not transferred prior to death, the general assignment can be used to obtain a court order to transfer legal title into the trust.

                In Kucker v. Kucker , (2011), 192 CA 4 th , 90, the Court of Appeal reversed a trial court decision wherein the trial court disallowed a petition to transfer stocks into a trust based on a general assignment of all assets by the settlor to the trustee.   The Court of Appeal agreed with the petitioner that a general assignment of all or substantially all of the settlor’s assets into one’s trust does cause the stocks to be owned by the trustee.   An otherwise unnecessary probate was thus avoided thanks to a general assignment by the settlor.

                Similarly, a declaration of trust by a settlor to hold certain assets listed on a schedule of pledged assets attached to a trust document can likewise be used to accomplish the same result.   Most attorneys use a schedule of initial trust assets and a general assignment to reinforce one-another.   Moreover, unlike the general assignment, the schedule of trust assets will also include the real estate – together with a full legal description — for the same reason.   That is, if a trust transfer deed is not properly executed prior to the settlor’s death, then the schedule of initial trust assets to a declaration of trust can be used to petition the court to transfer legal title into the trust without a probate.

                While the general assignment and the declaration of trust are important safeguards against the failure to formally transfer title to trust assets while the settlor is still alive and competent, such safeguards are just safeguards.   The better course of action is to see that one’s real estate, stocks and bonds, and financial accounts (and other trust assets) are properly titled in the name of the trustee of one’s trust.   After all, filing a court petition entails further expenses and delay in the administration of the trust that can be avoided.   

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LIVING TRUST

The assignment of personal items to trust.

By John Stevens, J.D.

• How to Fund a Living Trust With Royalties

A living trust is a legal entity that holds property for the benefit of someone other than the person who created the trust. The process of transferring property into a trust varies depending on the type of property. For example, transferring a house into a trust calls for a process that is different than transferring a bank account. The process of transferring personal items into a trust is a comparatively straightforward one that is accomplished with a document typically called an "assignment of personal property."

Inventorying Personal Items

It is important to take an inventory of your personal items to determine which items you want to transfer into your trust. Generally, it is sufficient to list items using only general terms, such as “household furniture, furnishings, appliances and clothing.” You should specifically identify each individual personal item that is valuable, such as jewelry, antiques and collectibles. If you intend to leave a specific item to a specific beneficiary in your trust document, you should also describe that item with enough particularity so your successor trustee can easily identify it.

Assignment of Tangible Personal Property

Remember that you are transferring ownership of your personal items from yourself, as an individual, to yourself in your capacity as trustee of your trust. Begin your assignment document with language stating that you transfer your entire interest in the “following described items” to your trust. Use the name of the trust exactly as it appears on your trust document. For example, this language might read, “I, Mary Johnson, hereby transfer my entire interest in the following described property to The Mary Johnson Trust.” List those items you identified from your inventory after this introductory language. You must now include language stating that you, as the trustee of your trust, agree to accept the personal items into the trust. This language might read, “I, Mary Johnson, trustee, hereby agree to the above assignment.” Because you are acting in your dual capacity as an individual and as the trustee, you must sign the assignment document twice. First, sign your name as you usually do. Second, sign your name, followed by the word “trustee.”

Adding Property to the Trust in the Future

The vast majority of trusts allow the person who created the trust to add property to the trust in the future. So long as you are mentally competent, you are free to do so at any time. Consider contacting an attorney if you are unsure whether you have the power to add items. If you acquire an item that falls within one of the general category descriptions, such as “clothing” or “furniture,” there is no need to make a change. If you acquire an item that does not fall within one of those general categories, such as a new valuable painting, you must create a new assignment form and list that item individually. Read More: Who Can Sign a Deed Transferring Property Owned by a Trust for the Trustee?

Special Considerations with Corporate Trustees

The person or entity in charge of a living trust upon its creation is called the “initial trustee.” The person or entity that assumes administration of the trust upon the death or incapacity of the initial trustee is called the “successor trustee.” If you name a corporate trustee, such as a bank, to serve as the initial or successor trustee, you should contact that business before transferring personal items to your trust. Some corporate trustees are not willing to handle the transfers of personal items because of the liability risk associated with such property. Unlike with titled property, such as a house or bank account, personal items can easily be carried away or hidden. A corporate trustee may not be willing to deal with the possibility of a lawsuit from disgruntled family members who contend that a valuable coin collection that was stored within your home, for example, has suddenly gone missing. If the corporate trustee objects to handling personal property, ask the trustee whether it would handle the property if you exempted the trustee from liability with respect to those items.

• Funding a Revocable Trust; Continuing Education of the Bar

John Stevens has been a writer for various websites since 2008. He holds an Associate of Science in administration of justice from Riverside Community College, a Bachelor of Arts in criminal justice from California State University, San Bernardino, and a Juris Doctor from Whittier Law School. Stevens is a lawyer and licensed real-estate broker.

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Stock Assignment Separate from Certificate Transferring Stock to Revocable Trust | Practical Law

Stock Assignment Separate from Certificate Transferring Stock to Revocable Trust

Practical law standard document w-036-2266  (approx. 9 pages).

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Why It Is Important to Assign Shares to Family Trusts

Most of our clients probably have family trusts. Yet 99% of the 20,000 entities in our system are not owned by trusts, but by the individuals who formed the entities. We want to take this break from our regularly scheduled programming to remind our clients that if you have a trust, you can only realize its full benefit by insuring that all of your assets, including shares in corporations and membership interests in LLCs, are transferred to the trust.

The benefits of establishing a trust for estate-planning purposes are well documented and include avoiding probate to save time and money and to keep estate matters private. [1] But these benefits are lost if the trust is not properly “funded,” that is, if the assets of the person establishing the trust (known as the “settlor”) are not transferred into the trust before his or her death. As one estate-planning practitioner has explained,

[t]he most important step is funding the trust. It is an estate planning attorney’s imperative to communicate to clients the importance of funding the inter vivos trust [2] during the life of the settlors. A well-funded inter vivos trust does not typically require court oversight; however, a trust that has not been fully funded may require court petitions in order to transfer property into the trust after the death of the settlor, defeating the purposes of avoiding probate . [3]

In other words, the settlor’s property (including corporate shares and LLC membership interests) has to be in the trust in order for the advantages of the trust, including maintaining privacy, to be realized.

Although there are ways of getting property into a trust after the settlor has died, none of these options desirable. In particular, most estate plans involving the creation of a trust also call for the execution of a “pour-over will.” A pour-over will provides that all of the decedent’s “forgotten assets,” that is, those assets that were not successfully transferred to the trust during the settlor’s lifetime for whatever reason, should be paid to the trust. [4] The problem is that a pour-over will, like any other will, is ineffective until it has been probated, [5] which defeats the probate-avoidance purpose of establishing a trust.

Most states also have a small estate exemption that can be used to avoid probate for some amount of a settlor’s forgotten assets that did not make it into the trust before the settlor died. It is unwise, however, to rely on the small estate exemption as a post hoc method of funding a trust for various reasons, including the hassle and expense involved and, more importantly, the limited nature of the exemption. In New York, for example, a “small estate” is defined as the estate of a person who dies leaving personal property having a gross value of $30,000 or less, exclusive of various enumerated items, including “marketable securities” and other “money” not exceeding $25,000 in value. [6] Corporate shares and LLC membership interests are personal property, [7] but are probably not marketable securities in the context of the type of closely held corporation or LLC with just a few members that we are talking about here. So any corporation or LLC having a modest value of more than $30,000 will bust the small estate exemption. The limit is higher in California—$150,000—but that includes real and personal property in the state and provides for fewer excluded items than in New York, [8] so again the small estate exemption should not be relied on in California as a probate-avoidance technique.

Why are some assets “forgotten” when it comes time to fund a trust? One commentator in the area suggests that

the most common reason for the settlor’s failure to transfer property to his or her revocable trust is a simple lack of information regarding the necessity that they do so. A large portion of individuals who execute revocable trusts do not understand how the trusts work or how they “avoid probate.” Correspondingly, they are unaware of the requirement that they transfer their property to the trust. Moreover, estate planning attorneys generally do not assist their clients with transferring assets to their trust and may not even mention the need to do so to the client. Although the process of transferring most assets to a revocable trust is not complicated, it may be somewhat daunting for a lay-person. [9]

The process of transferring shares to a trust is incredibly easy. We prepare two documents (an Assignment Separate From Certificate and a new share certificate) and then update the stock ledger.

But you have to know to ask. And given that almost all of the shares in our system are individually owned, even though a majority of our clients probably have family trusts to, among other things, achieve privacy in their estate planning, it appears that many of our clients simply do not know to request that shareholding or membership interests in the businesses we form or maintain for them be assigned to their trusts, rather than to themselves individually, [10] which is why we wrote this article.

[1] See, e.g., David J. Feder & Robert H. Sitkoff, Revocable Trusts and Incapacity Planning: More Than Just A Will Substitute , 24 Elder L.J. 1, 16 (2016) (“Unlike a will, which upon probate becomes a public record, a revocable trust need not be filed with a court unless a dispute arises. So there is a privacy advantage to a revocable trust relative to a will, one that persists even in a state that has reformed probate to make it cheaper and faster.” (footnote omitted)); Bradley E.S. Fogel, Trust Me? Estate Planning with Revocable Trusts , 58 St. Louis U. L.J. 805, 817 (2014 ) (“Revocable trusts are quite effective at maintaining the privacy of an individual’s estate plan after his or her death.”); Frances H. Foster, Trust Privacy, 93 Cornell L. Rev. 555, 557 (2008) (“[R]evocable trusts, including those that continue for decades after the settlor’s death, are private.”).

[2] “Inter vivos trust” is merely the technical term for a trust that “is created during the [settlor’s] lifetime and becomes effective upon creation.” Aastha Madaan, The Basics of Inter Vivos Trusts , 33 No. 4 GPSolo 20, 21 (July/Aug 2016).

[3] Madaan, supra note 2, at 23 (emphasis added).

[4] Fogel, supra note 1, at 810.

[5] Id. at 811.

[6] See N.Y. Surr. Ct. Proc. Act Law § 1301(1) ; N.Y. Est. Powers & Trusts Law § 5-3.1(a) .

[7] See, e.g. , Cal. Corp. Code § 17705.01 ; N.Y. Ltd. Liab. Co. Law § 601 .

[8] See Cal. Prob. Code § 13100 .

[9] Fogel, supra note 1, at 813 (footnotes omitted).

[10] There is one caveat in that a trust may not own every type of corporate stock or LLC interest. For example, in California, shares of capital stock in a professional corporation may be issued only to a person who is licensed to render the same professional services offered by the corporation. See Cal. Corp. Code § 13406(a) .

Stock Assignment: Transferring Ownership Rights with Stock Power

1. introduction to stock assignment and stock power, 2. understanding ownership rights in stock, 3. the role of stock power in transferring ownership, 4. ways to obtain stock power, 5. filling out a stock power form, 6. executing a stock assignment, 7. legal considerations in stock assignment, 8. common mistakes to avoid in stock assignment, 9. conclusion and final thoughts on stock power and stock assignment.

Stock Assignment and Stock Power are two terms that are commonly used in the world of stocks and investments. They are often used interchangeably, but they refer to two different things. Stock assignment is the process of transferring ownership rights of a stock from one party to another, while Stock Power is a legal document that authorizes the transfer of ownership rights from one party to another. In this section, we will discuss in detail what Stock Assignment and Stock Power are, how they work, and why they are important.

1. What is Stock Assignment?

Stock Assignment refers to the transfer of ownership rights of a stock from one party to another. This process is typically used when an investor wants to sell their shares to someone else. The seller must sign an Assignment of Stock Certificate form, which is a legal document that transfers ownership rights to the buyer . The buyer must then present the form to the company's transfer agent, who will update the company's records to reflect the change in ownership.

2. What is Stock Power?

Stock Power is a legal document that authorizes the transfer of ownership rights from one party to another. It is typically used when an investor wants to transfer their shares to a family member or a trust. The seller must sign a stock Power form , which is a legal document that authorizes the transfer of ownership rights to the buyer. The buyer must then present the form to the company's transfer agent, who will update the company's records to reflect the change in ownership.

3. What are the differences between Stock Assignment and Stock Power?

The main difference between Stock Assignment and Stock Power is the purpose for which they are used. Stock Assignment is used when an investor wants to sell their shares to someone else, while Stock Power is used when an investor wants to transfer their shares to a family member or a trust. Another difference is the legal document that is used. Stock Assignment uses an Assignment of Stock Certificate form, while Stock Power uses a Stock Power form.

4. What are the benefits of Stock Assignment and Stock Power?

The main benefit of Stock Assignment and Stock Power is that they provide a legal framework for transferring ownership rights of a stock from one party to another. This ensures that the transfer is done legally and that the new owner has full ownership rights to the stock. It also ensures that the company's records are updated to reflect the change in ownership, which is important for tax purposes.

5. What are the risks of Stock Assignment and Stock Power?

The main risk of stock Assignment and stock Power is that they can be used for fraudulent purposes. For example, someone could forge an Assignment of Stock Certificate or a Stock Power form to transfer ownership rights of a stock to themselves. To mitigate this risk, it is important to use a reputable transfer agent and to verify the authenticity of the legal documents.

6. Which option is better: Stock Assignment or Stock Power?

The choice between Stock Assignment and Stock Power depends on the purpose for which they are being used. If an investor wants to sell their shares to someone else, then Stock Assignment is the better option. If an investor wants to transfer their shares to a family member or a trust, then Stock Power is the better option. It is important to use the correct legal document and to ensure that the transfer is done legally to avoid any potential risks .

Introduction to Stock Assignment and Stock Power - Stock Assignment: Transferring Ownership Rights with Stock Power

When it comes to owning stock, it's important to understand the concept of ownership rights. Ownership rights refer to the various privileges that come with owning stock, such as voting rights and the ability to receive dividends. Understanding these rights is crucial for investors who want to make informed decisions about their investments. In this section, we'll take a closer look at ownership rights in stock and what they mean for investors.

1. Voting Rights

One of the most important ownership rights in stock is the right to vote. When you own stock in a company, you are entitled to vote on certain matters that affect the company. These matters can include electing members to the board of directors, approving mergers or acquisitions, and making changes to the company's bylaws. The number of votes you have is typically based on the number of shares you own. For example, if a company has 1,000 shares outstanding and you own 100 shares , you would have 10% of the voting power.

2. Dividend Rights

Another ownership right in stock is the right to receive dividends. Dividends are payments made by a company to its shareholders, usually on a quarterly basis. The amount of the dividend is typically based on the company's profits and can vary from year to year. If you own stock in a company that pays dividends, you are entitled to a portion of those payments based on the number of shares you own.

3. Liquidation Rights

If a company goes bankrupt or is liquidated, shareholders have the right to a portion of the company's assets. This is known as liquidation rights. However, in most cases, shareholders are the last in line to receive payment after creditors and other stakeholders have been paid.

4. Preemptive Rights

Preemptive rights refer to the right of existing shareholders to purchase additional shares in a company before they are offered to the public. This allows shareholders to maintain their ownership percentage in the company and prevent dilution of their shares.

5. Transferability of Ownership Rights

Ownership rights in stock are transferable, meaning you can sell your shares to another investor. When you sell your shares, you transfer your ownership rights to the buyer. However, it's important to note that some ownership rights, such as voting rights, may be restricted for a period of time after the sale.

understanding ownership rights in stock is crucial for investors who want to make informed decisions about their investments. Voting rights, dividend rights, liquidation rights, preemptive rights, and transferability of ownership rights are all important concepts to understand. When considering investing in a company, it's important to evaluate these ownership rights and consider the potential risks and rewards .

Understanding Ownership Rights in Stock - Stock Assignment: Transferring Ownership Rights with Stock Power

Stock power plays a crucial role in transferring ownership of stocks from one person to another. Without it, the process would be more complicated and time-consuming. In this section, we will explore the different aspects of stock power and its importance in transferring ownership.

1. Definition of Stock Power: A stock power is a legal document that authorizes the transfer of ownership of a stock from the owner (the "grantor") to another person or entity (the "grantee"). It is also known as a stock assignment or a stock power form. The stock power form contains the details of the stock being transferred, the name of the grantee, and the signature of the grantor.

2. importance of Stock power : Stock power is important because it provides proof of ownership transfer and protects both the grantor and the grantee. With a stock power, the grantor can transfer ownership of the stock without physically delivering the stock certificate. This avoids the risk of loss or theft of the stock certificate. On the other hand, the grantee can prove ownership of the stock through the stock power, which is crucial for selling the stock or receiving dividends.

3. Types of stock Power forms : There are two types of stock power forms: "blank" and "special." A blank stock power form is unsigned and does not specify the name of the grantee. It is commonly used for transferring ownership of stocks to a brokerage firm or for depositing the stocks into a trust account. A special stock power form is signed and specifies the name of the grantee. It is used for transferring ownership of stocks to a specific person or entity.

4. How to Fill Out a Stock Power Form: Filling out a stock power form is a simple process. The grantor needs to sign the form and specify the name of the grantee. The grantee also needs to sign the form to acknowledge receipt of the stock. The completed form should be sent to the transfer agent or the brokerage firm that handles the stock.

5. Alternatives to Stock Power: While stock power is the most common way to transfer ownership of stocks, there are alternatives. One option is to use a trust. The grantor can transfer the stock to a trust and name the grantee as the beneficiary. The grantee will receive the stock upon the grantor's death. Another option is to use a will. The grantor can specify in the will that the stock should be transferred to the grantee upon the grantor's death.

Stock power plays an important role in transferring ownership of stocks. It provides proof of ownership transfer and protects both the grantor and the grantee. There are different types of stock power forms, and filling them out is a simple process. While there are alternatives to stock power, it is the most common way to transfer ownership of stocks.

The Role of Stock Power in Transferring Ownership - Stock Assignment: Transferring Ownership Rights with Stock Power

When it comes to transferring ownership rights with stock power , there are various ways to obtain this crucial document. Whether you are a shareholder looking to transfer your ownership or a company seeking to issue new shares, understanding the different methods available can help streamline the process and ensure a smooth transition of ownership. In this section, we will explore some common ways to obtain stock power, providing insights from different perspectives and comparing several options to determine the best approach.

1. Directly from the Transfer Agent:

One of the most straightforward ways to obtain stock power is by contacting the transfer agent directly. The transfer agent is responsible for maintaining the shareholder records and managing the transfer of ownership. They can provide you with the necessary stock power forms, which typically need to be completed, signed, and notarized before submitting them back to the transfer agent. This method ensures that the required documentation is obtained directly from the authorized party, reducing the risk of errors or fraudulent activity.

2. Online Stock Power Forms:

In today's digital era, many companies offer the convenience of online stock power forms. Shareholders can access these forms through the company's website or a designated platform. Online forms often include step-by-step instructions and may even provide a notary service. This option can save time and effort, as there is no need for physical paperwork or mailing documents. However, it is essential to ensure the online platform is secure and trustworthy, protecting sensitive information from potential cyber threats.

3. Brokerage Firms:

If you hold your shares through a brokerage account, you can obtain stock power through your broker. Brokerage firms typically have their own procedures for transferring ownership and may require specific forms or documentation. Contact your broker to inquire about the process and any associated fees. While this option may be convenient for shareholders who already have a brokerage account, it may not be the best choice for those who prefer a direct relationship with the transfer agent or have shares held outside of a brokerage account.

4. In-person at a Financial Institution:

Some shareholders may prefer to obtain stock power in person, either at their bank or another financial institution . This option allows for face-to-face interaction and immediate access to the necessary forms. However, not all financial institutions offer this service, so it is important to check beforehand. Additionally, consider any associated fees and potential time constraints when opting for this method.

Comparing the different ways to obtain stock power, the best option ultimately depends on your specific circumstances and preferences. If you have a direct relationship with the transfer agent, obtaining stock power directly from them ensures accuracy and eliminates potential intermediaries. On the other hand, online stock power forms can offer convenience and ease of use, particularly for tech-savvy individuals . Brokerage firms provide a viable option for those already utilizing their services, while in-person visits to financial institutions may be preferred by individuals seeking a personal touch.

Understanding the various ways to obtain stock power is crucial for shareholders and companies alike. By exploring the options available and considering the specific requirements and preferences, individuals can choose the most suitable method to transfer ownership rights efficiently and securely.

Ways to Obtain Stock Power - Stock Assignment: Transferring Ownership Rights with Stock Power

When transferring ownership rights with a stock power, there are several important steps to follow. Filling out the stock power form is one of the most crucial steps in this process, as it legally transfers ownership of the stock from one party to another. In this section, we will explore the process of filling out a stock power form, including what information is required, how to properly fill it out, and what to do after it is completed.

1. Understanding the Stock Power Form

A stock power form is a legal document that is used to transfer ownership of stock from one party to another. It is typically used in situations where the actual stock certificate is not available, such as when the stock is held in a brokerage account. The stock power form contains important information about the stock, such as the name of the company, the number of shares being transferred, and the name of the current owner.

2. Gathering the Required Information

Before filling out the stock power form, it is important to gather all of the necessary information. This may include the name of the company that issued the stock, the number of shares being transferred, and the name and contact information of the current owner. It is also important to have the recipient's information on hand, including their name and contact information.

3. Filling Out the Form

When filling out the stock power form, it is important to be accurate and thorough. The form will typically ask for the name and address of the current owner, as well as the name and address of the recipient. It may also ask for the number of shares being transferred, the date of the transfer, and other relevant information. It is important to double-check all of the information before submitting the form.

4. Submitting the Form

Once the stock power form has been filled out, it should be signed and dated by the current owner. Depending on the situation, the form may need to be notarized or witnessed by a third party. The completed form should be submitted to the appropriate parties, such as the brokerage firm or transfer agent.

5. Considerations When Filling Out a Stock Power Form

When filling out a stock power form, it is important to consider several factors. For example, if the stock is being transferred as a gift, it may be subject to gift taxes. It is also important to consider any restrictions or limitations on the transfer of the stock, such as those imposed by the company or by applicable laws and regulations.

6. Best Practices for Filling Out a Stock Power Form

To ensure that the stock power form is filled out correctly and completely, it is important to follow best practices. This may include reviewing the form carefully before submitting it, double-checking all of the information, and seeking professional advice if necessary. It is also important to keep copies of all relevant documents, such as the stock power form and any supporting documentation.

Filling out a stock power form is an important step in transferring ownership rights with a stock power. By following the steps outlined above and considering the relevant factors, it is possible to ensure that the transfer is completed correctly and legally.

Filling out a Stock Power Form - Stock Assignment: Transferring Ownership Rights with Stock Power

Executing a stock assignment is a process that involves transferring ownership rights from one party to another. It is a crucial step in the stock transfer process, and it requires both the assignor and the assignee to follow specific procedures to ensure a smooth transfer of ownership . In this section, we will explore the steps involved in executing a stock assignment and some insights from different points of view.

1. Review the Stock Power Form

Before executing a stock assignment, it is essential to review the stock power form carefully. This document is a legal instrument that transfers ownership rights from the assignor to the assignee. It contains important information, such as the name of the assignor, the name of the assignee, the number of shares being transferred, and the date of the transfer. Both the assignor and the assignee must sign the stock power form in the presence of a notary public.

2. Choose the Right Type of Stock Assignment

There are two types of stock assignments: a full assignment and a limited assignment. A full assignment transfers all ownership rights from the assignor to the assignee, while a limited assignment transfers only specific ownership rights, such as the right to vote or receive dividends. The type of stock assignment you choose depends on your specific needs and circumstances.

3. Consider the Tax Implications

Executing a stock assignment may have tax implications for both the assignor and the assignee. The assignor may be subject to capital gains tax if the stock has appreciated in value since it was acquired. The assignee may be subject to income tax if they receive dividends or sell the stock at a profit. It is important to consult with a tax professional to understand the tax implications of executing a stock assignment.

4. Choose the Right Method of Transfer

There are several methods of transferring ownership rights, including physical delivery, book-entry transfer, and electronic transfer. Physical delivery involves the physical delivery of stock certificates from the assignor to the assignee. Book-entry transfer involves the transfer of ownership rights through an intermediary, such as a stock transfer agent . Electronic transfer involves the transfer of ownership rights through an electronic network, such as the depository Trust company (DTC). The method of transfer you choose depends on your specific needs and circumstances.

5. seek Professional assistance

Executing a stock assignment can be a complex process, and it is advisable to seek professional assistance. A stock transfer agent can help you navigate the transfer process and ensure that all necessary procedures are followed. A tax professional can help you understand the tax implications of executing a stock assignment. Seeking professional assistance can help ensure a smooth transfer of ownership rights.

Executing a stock assignment is an essential step in transferring ownership rights from one party to another. It requires careful consideration of the stock power form, the type of stock assignment, the tax implications, the method of transfer, and professional assistance. By following these steps, you can ensure a smooth transfer of ownership rights.

Executing a Stock Assignment - Stock Assignment: Transferring Ownership Rights with Stock Power

When transferring ownership rights with a stock power, legal considerations must be taken into account to ensure a smooth and legally valid transaction. These considerations can vary depending on the type of stock being transferred and the parties involved. Here are some of the key legal considerations to keep in mind:

1. Type of Stock: The type of stock being transferred will impact the legal requirements for the transfer . For example, transferring common stock may require different legal documentation than transferring preferred stock. It's important to understand the specific requirements for the type of stock being transferred.

2. Parties Involved: The parties involved in the transfer will also impact the legal considerations . For example, transferring stock between family members may require different documentation than transferring stock between unrelated parties. It's important to understand the legal requirements based on the parties involved.

3. Tax Implications: The transfer of stock ownership can have tax implications for both the transferor and transferee. It's important to understand the tax consequences of the transfer and to consult with a tax professional if necessary.

4. Securities Laws: The transfer of stock ownership is subject to certain securities laws, including the Securities act of 1933 and the Securities Exchange act of 1934. These laws regulate the sale and transfer of securities and may require certain disclosures or filings.

5. State Laws: State laws may also impact the transfer of stock ownership. For example, some states require specific documentation or filings for stock transfers. It's important to understand the state laws that apply to the transfer.

When considering the legal considerations for stock assignment, it's important to consult with a legal professional to ensure compliance with all applicable laws and regulations. A legal professional can also help determine the best option for transferring ownership rights with a stock power.

Options for transferring ownership rights with a stock power include:

1. Direct Transfer: A direct transfer involves transferring the stock from one party to another without the involvement of a broker or intermediary. This option may be simpler and less expensive, but may require more legal documentation and may not be available for all types of stock.

2. Broker-Assisted Transfer: A broker-assisted transfer involves using a broker to facilitate the transfer of stock ownership. This option may be more expensive, but may be easier and more efficient, particularly for larger transfers or transfers involving multiple parties.

3. Gift Transfer: A gift transfer involves transferring ownership of the stock as a gift. This option may have tax implications for the transferor and transferee and may require additional legal documentation.

Ultimately, the best option for transferring ownership rights with a stock power will depend on the specific circumstances of the transfer. Consulting with a legal professional can help determine the most appropriate option and ensure compliance with all applicable legal requirements.

Legal Considerations in Stock Assignment - Stock Assignment: Transferring Ownership Rights with Stock Power

When it comes to stock assignment, there are several mistakes that people make which can lead to legal and financial complications. It is important to understand the process of transferring ownership rights with stock power and avoid these common mistakes.

1. Failing to Complete the Stock Assignment Form Correctly

One of the most common mistakes made in stock assignment is failing to complete the stock assignment form correctly. This can lead to delays in the transfer of ownership rights and can result in legal complications. It is important to ensure that all the required fields are filled out correctly and that the form is signed and dated by the appropriate parties.

2. Not Having a Properly Endorsed Stock Certificate

Another mistake that people make is not having a properly endorsed stock certificate. This is important because the stock certificate is the physical representation of the ownership rights of the stock. It is important to ensure that the certificate is properly endorsed by the seller and that the buyer has the certificate in their possession.

3. Not understanding the Tax implications of Stock Assignment

Another mistake that people make is not understanding the tax implications of stock assignment. Depending on the circumstances, there may be tax implications for both the buyer and the seller. It is important to consult with a tax professional to understand the tax implications before completing the stock assignment.

4. Not Using a Broker or Transfer Agent

Some people try to complete the stock assignment themselves without using a broker or transfer agent. This can lead to complications and delays in the transfer of ownership rights. It is recommended to use a broker or transfer agent to ensure that the process is completed correctly and efficiently.

5. Not Verifying the Identity of the Buyer or Seller

Finally, it is important to verify the identity of the buyer or seller before completing the stock assignment. This can help to prevent fraud and ensure that the transfer of ownership rights is legitimate. It is recommended to use a reputable broker or transfer agent who can help with this process.

Stock assignment can be a complicated process, but by avoiding these common mistakes, it can be completed successfully. It is important to ensure that the stock assignment form is completed correctly, that the stock certificate is properly endorsed, that the tax implications are understood, and that a reputable broker or transfer agent is used. By following these guidelines, the transfer of ownership rights can be completed efficiently and without complications.

Common Mistakes to Avoid in Stock Assignment - Stock Assignment: Transferring Ownership Rights with Stock Power

Stock Power and Stock Assignment are important concepts in the world of finance and investment. These concepts help investors transfer ownership rights of their stocks to another party. In this blog post, we have discussed the details of these concepts and their implications. We have also analyzed the different perspectives and provided insights on how to use these concepts effectively.

1. Importance of Stock Power and Stock Assignment

Stock Power and Stock Assignment are essential tools for investors who want to transfer ownership rights of their stocks to another party. These concepts enable investors to transfer their stocks without having to go through the hassle of selling them. This is particularly useful in cases where the investor wants to gift the stocks to someone or transfer them to another account.

2. Understanding Stock Power

Stock Power is a legal document that enables the transfer of ownership rights of a stock from one party to another. It is an endorsement that is required by the brokerage firm to transfer the ownership of the stock. The stock power must be signed by the owner of the stock and must be submitted along with the certificate of the stock to the brokerage firm.

3. Understanding Stock Assignment

Stock Assignment is a process where the ownership rights of a stock are transferred from one party to another. The process involves filling out a transfer form and submitting it to the brokerage firm. The transfer form must be signed by the owner of the stock and must be submitted along with the certificate of the stock.

4. pros and Cons of stock Power and Stock Assignment

Stock Power and Stock Assignment have their own advantages and disadvantages. Stock Power is a simpler process that requires the submission of a single document, whereas Stock Assignment involves filling out a transfer form. However, Stock Power can only be used if the certificate of the stock is in the possession of the owner, whereas Stock Assignment can be used even if the certificate is lost or misplaced.

5. Best Option

The best option depends on the situation. If the certificate of the stock is in the possession of the owner, Stock Power is the best option. However, if the certificate is lost or misplaced, Stock Assignment is the better option. In any case, it is important to consult with the brokerage firm to determine the best option.

Stock Power and Stock Assignment are important concepts that enable investors to transfer ownership rights of their stocks. These concepts have their own advantages and disadvantages, and the best option depends on the situation. It is important to consult with the brokerage firm to determine the best option.

Conclusion and Final Thoughts on Stock Power and Stock Assignment - Stock Assignment: Transferring Ownership Rights with Stock Power

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General Assignments Effectively Transfer Shares of Stock to a Trust

Recall that in order to ensure the creation of a valid trust, there must be trust property.  See Ensuring the Creation of a Valid Trust blog.  Written declarations and general assignments generally are not the best ways to create trust property; however, they can be sufficient to transfer shares of stock, but not real property, to a trust, according to a recent California Appellate case.

In Kucker v. Kucker , 192 Cal. App. 4th 90 (2011), Trustor signed a declaration creating a revocable inter vivos trust, a general property assignment, and a pour-over will.  Later, Trustor signed an amendment to the general property assignment transferring all of her shares of stock in eleven specified corporations and funds.  However, Trustor did not include her 3,017 shares of stock in Medco Health Solutions, Inc.  At the time the amendment was signed, the Medco stock certificate was lost and the issue before the court became whether the Trustor intended to include all the stock she owned when she amended the general assignment.

The lower court denied the petition to attach the Medco stock for failing to meet the writing requirement under the California Civil Code (which required a writing for contracts that granted credit for over $100,000).  The Second District California Court of Appeal reversed and held that a general assignment of assets was sufficient to transfer shares of stock to a trust, even if the assignment failed to specifically identify the stock.  The court further elucidated that, “There is no California authority invalidating a transfer of shares of stock to a trust because a general assignment of personal property did not identify the shares. Nor should there be.”  The Civil Code section used by the lower court applied to agreements to loan money or extends credit made by persons in the business of loaning money, not to transfers of shares of stock to a trust.

There are many intricacies involved in the creations of trusts, and estate planning in general.  To ensure your affairs are in order, or if you are interested in learning more about how to ensure the validity of your trust, please contact  the San Jose estate planning attorneys at Lonich Patton Erlich Policastri, LLP .  Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results.  While this post may include legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

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1871 The Alameda, Suite 400 San Jose, CA 95126

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Q&A: Transferring Shares to a Trust

 —Interested Shareholders  

 “In addition, there are issues such as service of process; maintenance  collection; proxy voting and uncontrolled occupation of the unit which may make  trust ownership problematic for the co-op board.  

 “Many co-ops have found ways to overcome these problems. The easiest way to do  this is to have the current shareholder and the trustee of the trust sign an  agreement at the time of transfer which in effect requires the current  shareholder to be the only occupant of the unit and the guarantor of the  maintenance. Of course, this document should be drawn by the cooperative's attorney and  approved by the board of directors.”  

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How can we help you today, how do i allot or transfer shares to a trust print.

Modified on: Thu, 21 Apr, 2022 at 11:43 AM

It is often a misconception that the shares should be registered in the name of a Trust . A Trust is not a person and so, strictly speaking, it should not be recorded as the holder of the shares. It would be wrong too, although it is often done, to register a Trust as though it were a corporate entity (unless it is a corporate trustee).

Note:  Shares, as per any other investment of a Trust, should be held by the trustees in their names on trust for the beneficiaries of the Trust.

To reflect the fact that shares are held by the Trustees  on  Trust (rather than beneficially) you can include the name of the Trust or the fact that they are being held on trust in the register and on any share certificates as an account designation .

For example: if Jack Jones and Jill Jones are trustees you would first create a joint shareholder.

  How do I create a joint shareholder?

In the above example we have used the designation " re Jones Family Settlement Trust ". You could equally have phrased it " as Trustees of the Jones Family Settlement Trust ". 

Note: The option to add a designation is always given after you have either allotted or transferred shares.

Simply select Yes and add the designation exactly as you want it to appear including any " re " or " as ".

Note: Where there is more than one Trustee, i.e. it is not a sole corporate Trustee, you should include each Trustee as a joint shareholder. The trustees can choose not to have all the trustees recorded as the holder of the shares but where they are individuals at least two must be included so they can give a valid receipt.

Note: You can, however, only enter one address for the trustees. This could be the personal address of the first named trustees or the address of the underlying company.

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When and How Family Businesses Should Use Shareholder Agreements

• Peter Jaskiewicz,
• François Belot,
• James G. Combs,
• Emmanuel Boutron,
• Céline Barrédy

Two studies show that the right contract can both protect shareholders and add market value.

Two studies by the authors demonstrate that the presence of robust shareholder agreements in publicly traded family firms in France adds 18% in market value to shareholders because they protect shareholders against misuse of capital by groups of family members.  This article describes the critical provisions in such agreements and presents data showing the impact of these provisions on market value.

A shareholder agreement (SA) is a legally enforceable contract signed by large shareholders. Its provisions typically bind the shareholders to make certain decisions together and limit when and to whom they can sell shares. SAs can create shareholder value when used by signatories to hold each other accountable, but they can destroy value when several join SAs to act as one large shareholder to extract benefits via lucrative insider transactions. Our research shows that the presence of the right kind of SAs can have a dramatically positive effect on the market valuation of family firms.

• PJ Peter Jaskiewicz is a University Research Chair in Enduring Entrepreneurship at the Telfer School of Management in Ottawa, Ontario
• FB François Belot is a professor at the Universite ́ Paris-Dauphine in Paris, France
• JC James G. Combs is a professor at the University of Ottawa’s Telfer School of Management in Ottawa, Canada
• EB Emmanuel Boutron is a professor at CEROS – University Paris Nanterre in Nanterre, France
• CB Céline Barrédy is a professor at CEROS – University Paris Nanterre in Nanterre, France

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Continental Stock Transfer & Trust put out a press release that should provide some comfort to investors in the current Canna-Global/Liqueous saga. That’s because Continental took the unusual position of backstopping Canna-Global’s trust for the 724,000 shares that were incorrectly issued to Liqueous , and which Liqueous has yet to return.

For those not familiar with the current drama, Canna-Global (NASDAQ:CNGL) had put out an 8-K last Thursday, June 27th , alerting investors that Canna-Global had issued 724K shares to Liqueous, which were then sold by Liqueous in the market despite being unregistered and not freely tradable until post-business combination closing. This had significant implications for Canna-Global shareholders since it reduced the cash-in-trust value of their shares.

If you’re asking why did Canna-Global issue 724K shares to Liqueous, it was because EF Hutton had sold the rights to their $8 million deferred underwriting fee on the transaction and it also came along with an additional 820,531 shares to be issued at a later date. Except what seemed to get lost in translation was that this deferred underwriting liability is contingent on a deal closing . It’s a “success” fee and if a deal doesn’t close, the fee doesn’t exist. To issue freely tradeable shares for an event that may not happen should be an obvious problem.

Despite this, Canna-Global directed Continental, pursuant to written instructions from Canna and a counsel opinion which they were told by the CEO of Canna to rely upon, to issue the new shares. However, this goes against Canna’s charter which prohibits the issuance of free trading stock prior to a business combination.

On Monday, June 24th, both Continental and Canna-Global contacted Nasdaq seeking a halt in trading and a reversal of all trades of those shares. However, trading wasn’t halted until Thursday, June 27th, the same day the company filed an 8-k outlining what had transpired.

To make the situation even more complicated, Canna-Global, rather than demanding return of the shares from Liqueous, attempted to amend its charter to permit the issuance of free trading shares before a closed combination. The amendment was approved by a shareholder vote, but the insiders owned a substantial portion of the voting shares and could control the outcome. Regardless of the vote, it’s not clear that they gave adequate notice to investors, which is required. Basically, rather than try to correct the original mistake, they doubled down.

Nonetheless, the original 8-K from Canna-Global on Thursday, June 27th, mentioned a backstop of the Trust by Liqueous. However, it now appears that’s unlikely since Continental has stepped in to do just that. Today’s press release states, “Continental as trustee has itself agreed to guarantee the payment of full trust value for the 724,000 Class A common shares of Canna-Global in the event of a redemption or liquidation event.”

This should provide some comfort to investors, but it’s doubtful they’re going to feel completely relaxed. After all, it begs the question – could something like this happen again? Never say never, but it’s highly unlikely.  Clearly no one in SPACLand wants to go through this again.  Most likely, procedures have already been put in place to prevent this.

However, the real takeaway from the Canna-Global situation, as well as with some of the other lawsuits this year (Financial Strategies, Industrial Human Capital), it’s important to know and trust your sponsor team.

At the SPAC of Dawn US markets finished their truncated trading session Wednesday at an all-time high, yet “market conditions” nonetheless claimed another SPAC transaction as victim over the holiday break. Futures remain largely green all the same with a new government taking shape in the UK and fresh job numbers slated to come out...

At the SPAC of Dawn Today is a half-day for the US markets, but that rarely equates to half as much activity in SPACs. Teams frequently like to tuck deal announcements and less-than-positive corporate actions into portions of the calendar just before a holiday. But, with the minutes from the Fed’s June meetings coming out...

With June wrapping up, legacy SPACs have continued to need to approve additional time for their business combinations, while at the same time, new deals have paved the way for the future. The amount of funds that could be left in the trust account is unknown territory for newly issued SPACs, but these fresh starts...

Eureka Acquisition Corp announced the pricing of its $50 million IPO and its units are expected to begin trading on the Nasdaq under the symbol “EURKU”, Tuesday, July 2, 2024. The new SPAC aims to combine with a target in Asia utilizing the team’s established deal-sourcing network among private equity and venture capital firms in...

At the SPAC of Dawn SPACs jumped into show business in a big way this year with Screaming Eagle‘s combination with Lionsgate Studios (NASDAQ:LION). But, they had already been active in the music scene listing companies like Middle Eastern music streamer Anghami (NASDAQ:ANGH), music portfolio investor Reservoir (NASDAQ:RSVR) and ticket seller Vivid Seats (NASDAQ:SEAT). But,...

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