Transferring Stock Ownership After Death

What Happens to the Ownership of Stocks After a Person Dies?

By Robin Hartill, CFP – Updated May 28, 2025 at 4:39 PM | Fact-checked by Frank Bass

Key Points

Designating a TOD beneficiary allows stock transfer without probate.
Jointly owned stocks automatically transfer to the co-owner upon death.
Without a TOD designation, stocks must go through probate for transfer.

Creating and updating your estate plan is vital in financial planning. No matter where you are in that process, you may be wondering how to transfer stock ownership after death. If you designate a transfer-on-death (TOD) beneficiary, the process can actually be pretty straightforward. Your shares will pass directly to the person you've named and won't have to go through the probate process.

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An infographic explaining three different ways stocks transfer after the owner's death. — Image source: The Motley Fool.

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Read on to learn how stock ownership is transferred when someone dies and what you should do to ensure your loved ones won't encounter any hurdles involving your brokerage account when you die.

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Stock

A stock represents an ownership interest in a business. When a business wants to raise money, its board of directors determines the number of shares to issue.

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Probate: If there's no joint account owner or beneficiary

Probate is a legal process for settling a deceased person's estate. If a person who's the sole owner of stocks passes away without naming a TOD beneficiary, the stocks will have to go through probate. When a person leaves stocks behind, a probate court must first determine who gets the shares and then direct the executor of the estate to transfer ownership accordingly.

To facilitate a transfer, the executor will need a copy of the decedent's will or a letter from the probate court confirming that the beneficiary in question is indeed the person entitled to receive the shares. The executor must then send these documents to a transfer agent, who can complete the transfer of ownership.

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Bear in mind, though, that beneficiary designations supersede the instructions in your will. So, if you've been divorced for a decade and forgot to remove your ex-spouse as the beneficiary, they would still have a claim to the account. That's why reviewing beneficiary designations after a major life change, like a marriage or divorce, is essential.

Also, be sure to notify your loved ones whom you've named as beneficiaries. You'll need to give them the name of the brokerage firm so they can notify the company and avoid delays in transferring ownership.

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About the Author

Robin Hartill, CFP, is a contributing writer at The Motley Fool. Robin’s work has also been published by Yahoo Finance, USA Today, and Penny Hoarder. She is a graduate of the University of Florida.

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