How to give a share of stock as a gift gas and bloating


With few exceptions, this couldn’t be easier. You fill out a form, mail in a check, and that’s it. The person receives a statement showing the number of shares they own, and can then buy more by mailing in additional checks, having automatic withdrawals set up from their bank account, or reinvesting any cash dividends their new stock pays. If you want to buy them more shares, many plans will allow you to write another check and send it in yourself, or write it directly to the person if you trust they’ll use the funds to buy the stock you want to gift them.

What if you want a physical representation of ownership? Though stock certificates are becoming rare and, in some cases, companies refuse to issue them, you can check with a service like They can title the stock in the name of the gift recipient then you might be able to use that share to set up the DRIP. In my own family, this is how I helped my youngest sister begin building her ownership stake in the Coca-Cola Direct Stock Purchase Plan. She still has her first framed certificate, with 99%+ of her remaining held under direct registration. How to Give Stock as a Gift If You Want to Place Restrictions on the Shares

For Minors: These custodial accounts are unique because they allow you to name a custodian who has a duty to manage the money for the welfare of the minor, but the property belongs to the minor since gifts to the UTMA are irrevocable. Depending on the state, you can decide at the time to account is established whether you want the minor to have the right to take possession of the assets at the age of 21 or some other age (a few states allow you to ​defer to as long as the child’s 25th birthday, while some will let you set it as young as 18).

Establish a Trust Fund and Transfer Shares of Stock To It: Whether you want to give shares of stock to a minor or adult, the ultimate option in terms of flexibility is a trust fund. You can write a trust declaration that splits the legal title of the property between a trustee, who has a fiduciary duty to manage it with the utmost standard of care, and an economic beneficiary, who gets to enjoy the property in a way that you determine.

Imagine that you were sitting on a block of 10,000 shares of Royal Dutch Shell Class B ADR. You decide that you want to give the stock as a gift to your three grandchildren. You hire an attorney to write a basic trust document (a simple, straightforward trust will probably run you around $1,000 in legal fees, though this could vary wildly by location) that says you are transferring all 10,000 shares to the trust itself. For the rest of their lives, 100% of the dividends paid on the stock in the trust is to be distributed to your grandkids at Christmas. When the last of them dies, the whole block – whatever it is worth – is to go to your alma mater to establish scholarships.

You could either convert your existing brokerage account into a trust by filling out the paperwork (some brokers will even let you keep the same account number so nothing but the ownership changes) or you can set up a separate, new account under the trust’s name and have the stock transferred to it through retitle, as we’ve already discussed.

In this case, you were able to give the stock as a gift but the grandkids could never touch it. Instead, they got to live off the dividends. Over the past 12 months, this would have amounted to $34,400. Each grandkid would have received a check for roughly $11,467. Over time, the checks should continue to grow larger. In this illustration, you didn’t restrict how that money could be used, but if you had wanted, you could have limited it to buying a home, regularly purchasing a new wardrobe, or paying for groceries. Trusts are extremely flexible and almost all provisions will be upheld unless they violate a law or require someone to behave in a way that is considered contrary public policy.