How to cash in old stock certificates

Make sure the shares still count

Before any paperwork, find out what became of the company and whether your certificate still counts. A certificate from a company that was later renamed or bought may now stand for shares of a different company, or for a cash payment nobody ever collected. Our guide on how to find out if an old stock certificate is worth anything covers how.

Call the transfer agent

The transfer agent for the company, or for the company that took it over, keeps the list of shareholders, and the company’s investor relations page names it. Have the certificate in front of you when you call. Ask whether this certificate (give its number, the number of shares and the owner’s name) is still outstanding, what it represents today after any mergers or splits, whether anything was paid on it that nobody collected, like dividends or a buyout payment, and what they need from you to move the shares into your name or sell them.

Many transfer agents will sell the shares for you for a fee. Others will record them in the Direct Registration System (DRS), which holds shares in your name electronically, and from there you can move them to a broker. Fair warning: they’ll usually only discuss an account with the registered owner or that person’s legal representative, such as an executor.

Or start with a broker

Some brokers still take paper certificates for deposit, but many charge a fee and some no longer accept them at all, so call before you mail anything. The name on the account generally has to match the name on the certificate, or the shares need to be transferred first.

Get the paperwork right

Don’t sign the back of the certificate yet. The transfer form there, or a separate form called a stock power, gets signed by the registered owner when the transfer agent or broker asks for it. Once it’s signed, whoever holds the certificate can transfer it, so keep it blank until then.

Transfer agents usually want the owner’s signature backed by a medallion signature guarantee, a stamp from a bank, credit union or broker that vouches the signature is real. Most only give them to their own customers, so start with the bank you already use. A notary stamp isn’t the same thing and won’t be accepted in its place.

If the owner has died, expect to need a certified death certificate, court papers naming the executor (or a small estate affidavit, depending on the state), an affidavit of domicile, and the executor’s guaranteed signature. If the owner’s name changed, by marriage for example, include the document that shows it. The transfer agent will send an exact list, and it’s worth asking for one before you gather anything.

If the certificate is lost or damaged

The registered owner can ask the transfer agent to replace a lost certificate or record the shares electronically instead. That usually takes a sworn statement that the certificate is lost, plus an indemnity bond: insurance that protects the company if the old certificate turns up in someone else’s hands. The bond typically costs around 2 to 3 percent of the shares’ current value. One more thing: if a certificate was reported lost and replaced years ago, the old paper no longer counts, even if it turns up again.

If the shares went to the state

When a shareholder loses touch for years, the shares, or the money owed on them, get handed over to a state unclaimed property office. Claiming them back is free, and our guide to old stock certificates and unclaimed property explains where to look.

Taxes

Selling shares can mean capital gains tax, and the original price of very old shares is often unknown. Inherited shares are generally valued as of the date of death, which usually helps. A tax professional can tell you what applies to you.