Day: January 22, 2018

Give The Gift Of Stock For Valentines Day

Gift giving season is upon us gain, Valentines Day is right around the corner. Want to wow your valentine like Kanye wowed Kim? Give him or her the gift of stock this Valentines Day. It's unique and will serve your valentine for years to come.

Kanye West had the right idea when he gave Kim Kardashian West the gift of stock for Christmas. He took stocking stuffer to a whole new level. While it is not a conventional gift, it rivals any diamond around. As a matter of fact, I would rather have stock than a diamond. There are a few way’s to give stock as a gift, let’s talk about a few.

How to give stock as a gift with no RESTRICTIONS

If you want to give stock as a gift where the person you are giving it to can do whatever they like with no strings attached. You can give stock by re-titling your existing stock holdings, setting up a direct stock purchase plan or a dividend reinvestment plan in the name of the recipient.

 Re-Titling Your Existing Stock Holdings

If you already hold the shares you want to gift in a brokerage account or dividend reinvestment plan of your own, you can contact the institution and fill out forms to re-title some of your holdings in the name of the person to whom you want to gift the stock. You can even set up regular gifts at predetermined intervals, such as the 1st of every month, or the third Tuesday of each quarter.

Here’s an example: Say you have a brokerage account with Charles Schwab. Well Charles, and yes I called him by his first name, has a form that is called a Letter of Authorization for Movement of Funds. This form allows clients to create schedules transfers of shares to third parties. Let’s say after much successful investing you have built up a large portion of Amazon stock. Once all information has been verified, you could simply say, “Hey Charles, I want to gift 100 shares of Amazon to my granddaughter every month by taking it out of my account and putting it into her brokerage account.”

Now if said person does not have a brokerage account with old Charles, then Charles could send the said person a certificate of stock or just have the shares registered in said person name through the direct registration system. (fees may apply)

Set Up a Direct Stock Purchase Plan or Dividend Reinvestment Program Account in Their Name

This is by far the easiest way to give stock. All you do is fill out a form and a check and mail it in. The person receives a statement showing the number of shares they own, and they can even purchase more by mailing in additional checks, having automatic withdrawals set up from their bank accounts, or by reinvesting any dividends their stock may pay.

If by chance you want to purchase more shares for them, most plans will allow you to write another check and send it in yourself or write a check directly to the person you are gifting the stock to, that is if you trust them to do the right thing with it.

Although stock certificates are becoming rare, you can check with services like They can title stock in the name of the gift recipient, then you might be able to use that share to set up the DRIP.

How I give the gift of stock

The way I give the gift of stock to my grandchildren is through their parents. I just cashapp them the money and they pick the stocks they want for their children and boom there it is. See easy peasy. I do this because I want their parents to invest in what they want for their children. I do, however, offer suggestions as to what stocks I would like to see them purchase, but again, the final decision is up to the parents.

Now, I know that some may want to give stocks with restrictions so here are a couple of ideas for that,

For Minors, Setup a Brokerage Account or Direct Stock Purchase Plan Registered Under the Uniform Transfers to Minors Act of Your State (UTMA)

What I love about these accounts is that they are unique in that they allow you to name a custodian. The custodian has the duty to manage the money for the welfare of the child. The actual stock belongs to the child as gifts to the UTMA are irrevocable.

Depending on the state in which you live, you can decide at the time when the account is established whether you want the minor to have the right to take possession of the assets at the age of 21 or some other age. Some states allow you to defer possession until the child reaches the age of 25, while other states allow the child to take possession as young as 18.

Establish a Trust Fund and Transfer Shares of Stock To It

This option can be used for a minor or an adult and it is the ultimate option in terms of flexibility. You can write a trust declaration that splits the legal title of the stock between the trustee and the beneficiary. The trustee has the fiduciary duty to manage the trust fund with the utmost of care, while the economic beneficiary gets to enjoy the property in the way that you specify.

I hope this helps you give the gift of stock to your sweetheart for Valentines Day.


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