Stock ownership is extremely common in the United States so the question of what happens to the stock when the holder dies is of great importance to many. Many different variables come into play but the most important is marital status of the owner. Inheriting through a spouse generally means that any community owned equities pass to the survivor although the laws of various states may differ especially when it comes to separate property. An increasingly common method to pass stock along is to use a Transfer on Death registration allowing a named beneficiary to take ownership while avoiding probate. However, not all states allow TOD registration for stocks which means that the probate process will be required when the inheritance comes through intestacy or a will. But inter vivos transfers to individuals or a trust, when other options to avoid probate are unavailable, can do the trick even if other issues such as tax implications and setup cost must be considered.
See, What Happens to the Ownership of Stocks After a Person Dies, The Motley Fool, February 27, 2016.
