This article provides an overview of stock powers forms and how they are used. If you need to transfer ownership of stock or other securities from one owner to another, you may need to complete a stock powers form. For example, stock powers may be used to transfer ownership of securities when stocks or bonds are sold or gifted.
See Gift Stock to Children.A person with stock powers can transfer title to securities to a new owner. A stock powers document may be required to be included with physical stock certificates when they are sold, gifted or otherwise transferred. A stock power is a type of power of attorney. See also
Letter of Instruction.
To properly complete a stock powers form, you may need the following information:1. The full name of the company stock or security;2. The certificate numbers;3. The number of shares or units to which the stock power applies;4. The type of stock, such as common or preferred;5. The full name of the stockholder or bondholder as shown on the certificates; and6. The dollar amount, issue amount, principal amount, etc.
An agent with power of attorney may be able to execute stock powers if the power of attorney document grants the agent such authority. See Agent Powers Under POA.When dealing with stock powers documents, make sure they bear the correct endorsements, as well as any signature guarantees that may be required. If you do not know whether a stock powers document is properly executed or legitimate, consult a lawyer. Finding an attorney.
Stock Powers Forms
If you need a stock powers form to transfer securities, one option is to request the form from the financial institution where the securities are held. If you cannot locate the form on their website, contact them directly to request their standard stock powers form. You can also ask an attorney to draft a stock powers form tailored to the specific transaction. Before executing any stock power, transfer letter, letter of instruction or power of attorney, have it reviewed by your attorney. See
power of attorney forms.
Stock Powers, Trusts, and Estates
If you are the executor of an estate or the trustee of a trust, you may need to complete a stock powers form as part of the process of selling or transferring securities for the estate or trust. For example, if the deceased owned stocks or bonds, the executor, personal representative or administrator of the decedent's estate may need to complete stock powers, transfer letters or similar types of forms during the process of probate or
estate administration.A trustee may need to use a stock powers form to transfer securities to or from a trust. When stocks or bonds are held in trust, the trustee may also need to complete these types of documents during the process of trust administration.
Stock powers may be required when transferring ownership of stocks or bonds to trust beneficiaries, such as during the distribution phase of settling a trust.If you are going to donate stock or other securities for purposes of estate planning or as part of your charitable giving, the donee may request a completed stock powers form from the donor, along with the securities.
Drafting Stock Powers Forms
There are several factors that impact how a stock powers form should be drafted and executed. These factors include the following:a. the type of security to which the stock power applies;b. the type of transfer for which the stock power will be used;c. the requirements of any financial institutions involved, including where the securities will be deposited;d. the type of individual or entity executing the stock power form;e. the type of recipient to whom the securities will be transferred;f. how the securities will be held; andg. applicable federal and state laws and regulations.A stock powers form should be drafted by a licensed attorney.
Signing Stock Powers
When drafting and executing stock powers, particular attention must be paid to exactly how the stock certificates or other securities are titled. See title to property. The signature or signatures on a stock power are generally required to match the exact name on the stock certificate or other security documentation. For example, if the stock certificate is titled in the full legal name of the owner, the stock power typically should not use a shortened form of the owner's name or any other version of the owner's name. When completing a stock power form, make sure the name and signature on the form match the name on the stock or bond certificate, unless you are instructed otherwise by your attorney or advisor. Of course, there may be exceptions in some circumstances. Therefore, consult a legal or financial professional if you are unsure how the names or signatures should appear on a stock powers form.It is also a good idea to have your financial advisor or legal professional provide instructions on how to properly indorse stock certificates. Mistakes are frequently made when endorsing stock certificates, signing securities transfer documents, and completing new brokerage account applications.Before executing a stock power form, ask your financial advisor if a signature guarantee is required. Also, if you are signing a stock power form in your capacity as an executor, personal representative, trustee or agent under a power of attorney, you will typically need to indicate your title or role. Ask your attorney for instructions on how to properly execute the stock powers form and any related transfer documentation.Copyright 2020 Pennyborn.com. ALL RIGHTS RESERVED.Published January 7, 2020. Updated January 23, 2020.
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