How to proceed with share transfer requiring Medallion signature?

Question

My mother owned shares with two companies, and my brother and I are listed as beneficiaries. I started the process to transfer these shares to us within the companies after her passing. I am also the Successor Trustee of the Family Trust. Despite having filled out all required forms and both companies acknowledging our beneficiary status, they insist on a Medallion signature guarantee. The investments are listed in the Trust but not titled as such. We have approached both my bank and my mother's bank, which holds the Trust, but they are reluctant to provide the Medallion signature, and the companies won't bypass this requirement. Can you provide advice on how to proceed?

Julie King · Answer

Very few people like dealing with Medallions! Most banks and credit unions stopped issuing Medallions years ago or, if they still do, they will only issue them for people who bank at their financial institutions. Alternatively, if you have an established business relationship with a financial advisor (such as at LPL Financial, Edward Jones, etc.), they may be able to stamp your documents for you. Otherwise, there is an online Medallion provider, but it charges approximately $150 per signature so, if someone owns stock in seven different companies, the fee will be approximately $1,050. The only way someone can use that online site is to have a web address and cell phone number. I recognize the overwhelming majority of people have both of those, but I have had some elderly clients who do not, so that can be a real pain!  I hope that helps.

James L. Arrasmith · Answer

When financial institutions remain inflexible about Medallion signature guarantee requirements despite your status as Successor Trustee, you have several strategic options to pursue. First, consider approaching smaller credit unions or regional financial institutions where you maintain accounts, as they may offer more personalized service for trust administration matters compared to larger banks. Additionally, you might engage with specialized financial service providers such as Signature Guarantee Services, which exclusively offer Medallion guarantees for a fee without requiring existing account relationships. 
 
The reluctance you've encountered likely stems from financial institutions' heightened liability concerns when dealing with trust assets not properly titled within the trust. To overcome this barrier, prepare comprehensive documentation demonstrating your authority as Successor Trustee, including the death certificate, trust instrument provisions identifying you as successor, and any Letters of Trusteeship issued by the probate court. You might also benefit from requesting that your attorney draft a formal legal opinion letter addressing the ownership issue and confirming your legal authority to transfer these securities despite the titling discrepancy. 
 
Should these approaches prove unsuccessful, two alternative pathways merit consideration. First, petition the probate court for an explicit order directing the transfer of these specific securities, which may satisfy the transfer agent's requirements without a Medallion guarantee. Second, if the securities have relatively modest value, evaluate whether the simplified Small Estate Affidavit procedure under California Probate Code Section 13100 might apply, potentially circumventing the Medallion requirement altogether. This situation highlights the importance of proper trust funding during estate planning to prevent precisely these complications during trust administration.

Q: How to proceed with share transfer requiring Medallion signature?