Designate and Donate — Stocks and Investment Accounts
How It Works
- Contact your broker or investment account holder about a T.O.D. (Transfer on Death) or beneficiary designation form for mutual funds or other types of investment accounts.
Benefits
- You receive an income tax deduction for the fair market value of the securities on the date of transfer, no matter what you originally paid for them.
- You pay no capital gains tax on the transfer when the stock or share of investment account is sold.
Stocks and Investment Accounts: You've Planned for the Future
Investment accounts hold cash or stocks for the long term. You may have a mutual fund or a brokerage account, which is held at a financial institution. The objective of these accounts is to achieve long-term growth, provide future income, or preserve capital. After your passing, the remaining account balance may be transferred to heirs or charity.
When you opened the account, you should have received a form that tells the financial institution what to do with the assets when you pass away. This form is called a "Transfer on Death" (T.O.D.) form. With it, you decide how your assets will be transferred. If you do not complete this form, you will cause unnecessary confusion among your heirs and added expense to your estate administration.
Keep it simple. Ask the account custodian for a T.O.D. form, complete it, and share it with your financial or legal advisor. You can also leave all or a percentage of the assets to the Wharton Institute for the Performing Arts. Any portion of your investment account left to us will be exempt from estate and inheritance tax. You also avoid paying any capital gains on assets that have increased in value over the years!