Stock investors typically focus on how to buy or sell shares of the stocks they own. Yet from time to time, you might want to make gifts of stock, either to family members, charities, or other people or institutions. The process of changing stock ownership is more complex than simply giving someone a piece of paper, and depending on how you own your shares, you'll need to follow a different process to complete your gift or transfer.

Three ways to own stock
There are three different ways you can hold shares of stock. Most people who have brokerage accounts hold shares in street name, meaning that the broker they use is the official registered owner of the shares. Your stock is allocated to you internally within the broker's operational records, but as far as the company whose shares you own is concerned, ownership remains with your broker. That means that you'll have to work with your broker to change stock ownership.

Alternatively, there are two situations in which you will be recognized as the official owner of your stock. If you hold paper stock certificates, your name will be reflected in the company's own records. Alternatively, some companies allow you to register shares directly, especially if the company offers a direct reinvestment investing plan. Either way, you'll work directly with the company's transfer agent to change stock ownership.

The process of changing stock ownership
If you own stock in street name, then you can work with your broker to change the ownership of some or all of your shares. Contact your broker to get the appropriate forms to complete. The process will be simpler if the new owner also has or will have an account with the same broker, because no change in the actual registration of the shares will be necessary. The broker will simply make the transfer on its own internal books. If you transfer shares outside your broker, you'll need a broker-to-broker transfer form, and your current broker will need instructions on how to make the transfer to the receiving broker.

If you have a stock certificate or have your shares registered directly, then the transfer process will involve the company's transfer agent. You can find out who your company's transfer agent is by contacting its investor relations department. Then, the transfer agent will have you send in any paper stock certificates you have, along with a letter of instruction to instruct it on how to change the ownership of the stock. You'll typically need to get a signature guarantee from a financial institution to satisfy the transfer agent, and you might also need other legal documents granting you authority to change ownership.

Giving shares of stock isn't as simple as giving cash, but it can be a better way to give both for you and for your intended recipient. With help, you can navigate the process of changing stock ownership the way you want.

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