Leaving Stock Through a Texas Estate Plan
Stocks can be gifted as part of an estate plan and benefit the inheritor if they appreciate in value.
When people are listing the property and items they will give to loved ones during the Houston estate planning process, stocks and other securities often do not come to mind. A stock is a fractional share representing ownership of a small portion of a corporation. Stocks can be gifted as part of an estate plan and benefit the inheritor if they appreciate in value. Although stocks may seem complicated overall—and the process of gifting them even more so—estate planning attorneys can help to simplify the process. Below are common questions that individuals have about gifting stock and its inherent benefits.
How Do I Leave Someone Shares of Stock After My Death?
For individuals who want to leave loved ones their stock after their passing, they will incorporate this gift into their estate plan. Beyond including this as a part of a person’s will, there is another document that Texans should include in their estate plan. It is called a Transfer on Death Document. This document allows assets—like stocks—to be given to beneficiaries after the person’s death without having to go to court. A person creating a Transfer on Death designation names the beneficiary—the person receiving the stock—as well as which stock the beneficiary will receive and how many shares they will get, if the person is bequeathing the stock to more than one person.
With a Transfer on Death document, the named beneficiary does not have access or control over the person’s assets as long as they are still alive. And the individual who is giving away the stock can change their mind at any time before their death. This includes selling the stock or changing the paperwork to name someone else as the beneficiary.
What Are the Benefits of Gifting Stock?
While many people do not think about the tax benefits of gifting stock to loved ones, there are many. For tax purposes, individuals need only report the cost of the stock as the price that the person bought it at, not at whatever its value is when the stock is gifted. This is an immense benefit, especially when the shares have significantly appreciated in value. Additionally, there is a high limit for reporting the gift or incurring taxes upon the stock. If this stock is under $15,000 in value, the person does not need to report the gift. This is important to keep in mind when individuals are including stocks as gifts in their estate plan.
Because gifting stocks as part of an estate plan can be a complicated process, individuals thinking about this process should contact an experienced estate planning attorney to help.
Contact a Houston Estate Planning Attorney
If you or a loved one wants to incorporate stocks within their Houston estate plan, contact the knowledgeable attorneys at McCulloch & Miller, PLLC. With years of experience handling a diverse set of estate planning needs, we can ensure stock is gifted to the individual—and in the manner—you request. Estate planning may seem complicated, but we are here to demystify the process.