Lost Assets and Medicaid (Part 2)

Last week we were discussing George’s problem.  He was rapidly spending down Mom’s assets and preparing to apply for Medicaid when he discovered that she and Dad owned some stock.  He could not, however, locate the physical stock certificates.  What to do?

We asked George if he could find an account number or the name of the transfer agent but he was unsuccessful.  The transfer agent is the company that handles a company’s stock registry.  If certificate shares are sold or transferred, the transfer agent will make the change, removing one owner and adding another to the master shareholding list.  My staff looked up the company on the internet and located its transfer agent.

We contacted the transfer agent to report that the stock certificates were lost.  New certificates need to be issued, which of course, involves some paperwork and cost.  First, an affidavit of loss must be completed.  Since George’s dad has passed away, a death certificate is needed, since he cannot sign the affidavit.  If Mom cannot sign because of her dementia, then a valid power of attorney is necessary for George to sign on her behalf.

Typically, the affidavit must be signed in front of a notary or, if the stock exceeds a certain monetary value, determined by each company, then a medallion signature guarantee will be necessary.  Most major brokerage firms and banks can provide this service.

The cost of replacing a lost certificate is not insignificant.  Many transfer agents will charge a $50 processing fee but the real cost is the premium – equivalent to 2 to 3 percent of the value of the stock.  In George’s case he didn’t have a problem paying the fee since he just wants to be sure he can get his mother on Medicaid without incurring any nursing home private pay costs as a result of any delays in qualifying.

The entire process can take some time because of the steps involved so we had to work fast.  In George’s case we had 2 to 3 months.  But, the lesson for all is that if you know – or suspect – there may be stock certificates that need to be replaced, then act now to avoid the rush to get things done with an impending Medicaid deadline looming.

Comments are closed.