Ask Terry Questions Stocks — Terry says Don’t let this mess happen to you!

Stocks — Terry says Don’t let this mess happen to you!

By Terry Savage on February 28, 2024 | Investments

My husband and I own approximately $16000 worth of various stocks some held by the company and some in certificates. We have a will and other assets have my children as beneficiaries. What can I do to ensure that my children inherit the stock when we die. I’ve heard of transfer upon death but how do I do this. There are about 20 different stock company’s involved. Thank you

Terry Says

Whew, this is going to be a mess — either now or after you die. So to keep your kids from making huge mistakes, you need to take action to sort this out.

First, you need to sit down with a trusted advisor to review your cost basis for each stock, and whether you have gains or losses. If you’ve held the stocks for a long time, you will have capital gains, which are taxed at a significantly lower basis. And if you have losses you can use them to offset gains, if you decide to sell.

That’s the big question, do you want to keep holding all of these stocks, or can you get exposure to the market in a mutual fund — while protecting against a big tax bill?

In the back of your mind, you should know that if you die owning these stocks, your kids will pay no taxes on those inherent gains since under current law, their new cost will be the value on the date of death.

To find someone you can trust to review these stockholdings and advise on what to do, use this link to find a trusted advisor.

After you’ve gone through this process of deciding what to keep, what to sell, then you need to get all your stocks together in one place, with one firm so your kids won’t have to do a treasure hunt while they are grieving your death.

BUT, you must also keep a record of your cost basis for each stock — so that if you need the money and decide to sell some shares, you can pay appropriate taxes. I hope you’ve kept those original cost of purchase records along the way.

Your fiduciary advisor might suggest you create a Revocable Living Trust, instead of a will. Watch this video to understand the difference.

Then you would re-title all the shares in the name of your revocable living trust (vs joint name) so if one of you became incapacitated and you needed the money, the other spouse as co-trustee could sell the stocks and get the cash.

Yes, I know this is complicated for you. But don’t procrastinate. Just think of how complicated this project would be for your kids to take this estate through probate, and how costly for lawyers, and what delays in getting the money to them!!
This is YOUR responsibility. Start now!!



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