Are you searching for ways to transfer stock market investment shares from parents to children. One of our readers sent us this question on how to transfer shares from father to daughter.
Question 1: Hi, I am single lady, and my stock market investments are with my dad. He is the first holder in one of the demats and I am the second. We, as a family, are going through a lot of miscommunication, and hence the query. No judgements and personal advice please. What happens to the investments after first holder is deceased. Can those investments be willed to my brother by my father or do I become the sole holder.
Question 2: can I transfer these to my demat. If it is gifted by my dad to me, my brother may think it is dad’s shares which he gifted me. Instead, is liquidating ( it is long -term portfolio of 15 years worth 35 lacs) a good idea, and I then buy same shares in my demat account or put it in mutual funds? This was done also because my previous work places had restrictions on me holding stocks. While current organization does not have restrictions, the future ones will definitely have 🙁 does it make sense to park all the money in index funds? No restrictions on investing in MFS.
Transfer Stock Market Investment Shares rom Parents To Children
Since you are not the first holder, all that you are worrying are possibilities. Better to be the first holder yourself. Anyways it is good if you control your money under your name first and then someone else. If it is your money it should be legally in your name.
One of the main reasons friendship and relationship goes sour is Money. Get those shares ONLY in your name, no joint holder, please! Because if he expires, though the shares will come to you, others will claim that it is still family property. AT ONCE, settle this, not even by Will because even a WILL can be contested. GET YOUR MONEY BACK, or ensure your father’s name is deleted at once, and you become the SOLE holder. NO PLAN B, be warned.
Answer 1: Your father can WILL these holdings to anybody. It’s advisable to take control now. Open a new single demat account in your name and transfer all holdings from joint account to single account. If a WILL is created, it’ll be a task to get back the holdings in future, in case of dispute between siblings. Hence it’s advisable to take control today, while father is alive and holdings can be transferred. Offline or online transfer of holdings is a choice of the person.
He can’t do do that unless the both the first holder and second holder sign the DI. In the case of it being willed- it be rejected as daughter said she’s the second holder. Gifting is only possible if her father has POA in his favor, in which case her sign won’t be required. Secondly answering her query after the death of the first holder all the holdings will be transferred to the second holder without any questions being asked on intimation of death. And she become the sole holder.
Answer 2: You can take a custodial letter from your father stating that he is holding in “Trust” as a natural trustee, mentioning shares purchased by you, with your own earnings. This will help in case any dispute arises in the future.
A lady (single or otherwise) should have a corpus of her own so that she can act independently in her best interest. You can work on two things from now on.
1. Try to channel your monthly investments into an account where you are the primary holder. Better still, open an account where you are the owner.
2. Try to get your share from the joint account into your independent account. This may be delicate. You need to be tactful.
3. Start understanding law (succession act etc) which can help you understand what can happen in case of an eventuality.