As an authorised provider of medallion signature guarantees (medallions), our international solicitors assist a wide range of clients from around the world.

Traditionally, our medallion service has focused on assisting executors dealing with estates, which contain North American shares. In recent years, we have been assisting an increasing number of “transfer on death” beneficiaries to receive North American assets. We can also assist corporate entities and trustees with transferring North American shares.

This note provides a brief overview of how we can help “transfer on death” beneficiaries, corporate entities and trustees.

Medallions for “transfer on death” (TOD) beneficiaries

It is common for owners of North American assets such as investment accounts, savings accounts, checking accounts and retirement accounts (also known as IRA’s), to name designated individuals on their accounts to inherit in the event of their death.

Where a TOD beneficiary is named on an account, that asset will automatically pass to them instead of being distributed in accordance with the deceased’s Will (for testate estates) or relevant intestacy laws (for intestate estates). The asset is considered as falling outside of the estate for distribution purposes and, as a result, a grant of probate is not usually required for these types of accounts.

To accept their entitlement over a deceased’s account, a TOD beneficiary is usually required to complete a change of ownership and/ or account registration form. As part of this process, the TOD beneficiary is usually required to have their signature authenticated by a medallion signature guarantee.

The medallion verifies the authenticity of the person signing the paperwork. By providing a medallion, we are verifying that we have carried out the necessary due diligence to identify the TOD beneficiary, that the signature is genuine and that the person signing has the authority to sign. The medallion serves to protect the asset holder from transferring an asset to the wrong person.

Medallions for corporate entities and trustees

Companies that own North American shares may also face the requirement for a medallion when transferring or selling.

A company may be required to transfer or sell North American shares for a number of reasons, including the following:

• Company restructure;
• Winding-up;
• Payments to members or directors;
• Generating cash.

When providing a medallion for corporate entities, we have to conduct enhanced due diligence, which usually involves the following work:

• Reviewing the constitution of the company and checking to see the current status, for example, active or in liquidation;
• Identifying the company directors/ authorised signatories and obtaining the necessary identification documents;
• Ensuring that the company directors/ authorised signatories signing the transfer paperwork have the requisite authority to do so under the company’s constitution and/ or relevant company legislation applying to that jurisdiction; and
• Requesting company resolutions and/ or board minutes approving the proposed transaction (if necessary).

The medallion verifies the authority of the person(s) signing the paperwork. With corporate entities, this will usually be two directors of the company, or a lawfully appointed agent or attorney.

Fees for this service are quoted on a case-by-case basis.

As well as corporate entities, we also assist trustees with transferring or selling North American shares that may be held in trust. Our due-diligence for these cases will include the following:

• Reviewing the trust deed;
• Checking the current trustees and reviewing any previous retirements and appointments;
• Identifying the trustees;
• Checking any minutes or resolutions prepared by the trustees in connection with the proposed transfer or sale.

If you are a TOD beneficiary, corporate entity or trustee and require assistance with a medallion, you are most welcome to contact us and provide details of your requirements. It would be our pleasure to outline how we can help.

Details of our general service for providing medallions and the procedures that we follow can be found by clicking here. Please contact our specialist international lawyers by calling 01202 786194 or by emailing online.enquiries@la-law.com

If you are responsible for dealing with an estate involving North American assets, or you are attending to any other transfer of North American shares or securities, you will usually be asked to provide a medallion signature guarantee (also referred to as a medallion guarantee, signature or stamp). These are a statutory requirement when managing the movement of securities and shares in North America and they act to limit the liability and loss by safeguarding against forged signatures.

Only certain institutions are authorised to provide medallion signature stamp, and a North American transfer agent will not accept a lesser signature guarantee in place of this, such as a notary stamp or apostille.

They are not the same as surety bonds, although we can help with both.

Despite the fact that there are many financial institutions in North America authorised to provide medallion signature guarantees, it would seem that very few will provide these to the general public and only these few will do so if you are a long standing client of theirs.

It is harder still for residents outside of North America to obtain these, as many banks outside of the US just do not want to take on the risk associated with the guarantee.

How do you obtain a Medallion Signature Guarantee?

Medallions are not easy to obtain if you are a resident outside of the USA. Lester Aldridge has become the first UK based solicitor firm to be authorised to provide Medallion Signature Guarantee stamps as a guarantor on the US Medallion Signature Guarantee STAMP programme.

Various companies have different names for this stamp, which can cause confusion. The following terms are sometimes used: ‘Medallion Guarantees’, ‘Signature Guarantees’, ‘Barcoded Signature Guarantees’, ‘Barcoded Medallion Guarantees’ and ‘Medallion Stamps’.

Please see our Medallion checklist for details about how you can apply to obtain a Medallion Signature Guarantee through Lester Aldridge.

How much does a Medallion Guarantee Stamp cost?

The Medallion Only Service:

The fee for the “Medallion Only Service” starts from £400, plus VAT for UK residents.

If you select this service you will be responsible for ensuring that all the papers required by the transfer agents have been confirmed by them and that you have completed these correctly.

This service does not include checking the completed papers, or liaising with the transfer agents, or any advice or assistance in the drafting of any of the required papers.

As we would have had no prior involvement with the transfer agents, we cannot be sure if the papers you have drafted will meet their requirements. Therefore, if you have any queries about the transfer paperwork, please refer it to the transfer agent/ share registrar before sending this to us so that they can clarify their requirements to you.

Once the stamp has been affixed to your papers, the documents are returned to you so that you may arrange to forward these on to the transfer agents/ share registrars together with all their other requirements.

The Full Registration Service:

The fee for the full registration service starts from £1000 plus VAT and disbursements for shareholdings worth in excess of US $10,000. For very low-value shareholdings, where our usual registration services would not be economical, please get in touch with us to see if an alternative service can be arranged.

With the full registration service, there are a number of factors that will have an impact on the type of administration required. The value of the shares, the format in which they are held, the domicile of the deceased shareholder, and what you want to have done with the shares, will all be taken into account to determine which service is appropriate to meet your needs.

As part of this service, we include any Medallion Guarantee Stamps that are required – there is no additional cost for these.

For Canadian holdings, where the instructions are to execute a sale of the shares, it is not always necessary for a Medallion Signature Guarantee stamp to be required. Under our full service, we can ensure that only those who require a medallion go through the application to obtain one.

Please note that additional fees will apply if any work is required with regard to missing share certificates, escheatment of securities, confirming shareholdings, lifting restrictions on shareholdings and the collection of outstanding dividends.

If the value of any US stock at the date of death, for a non-US citizen, exceeds US $60,000 you will need to obtain a federal tax clearance certificate (also known as a federal transfer certificate) from the Internal Revenue Service (IRS) and pay any estate tax (if applicable). We can assist with this, however, please note that the work required is quite extensive. Historically it has taken IRS at least 6 – 9 months to issue clearance on the most simple of estates, however, due to current delays caused by the pandemic, the processing times currently being experienced are between 15 – 24 months. It can take up to three years if the estate is selected for audit, which again may be even longer than this at the moment due to current delays.

You cannot attend to the shares until the clearance has been issued. If you require a federal tax clearance certificate, a further fee of at least £3000 plus VAT will apply, depending on the domicile of the deceased and whether any estate tax is due to the IRS.

For assets other than shares, we would require further information about the estate and the assets to enable us to provide a quote.

Please note that for multiple requests within the same application, we may be able to offer a discount. Please contact us to discuss further if you think this may apply to your application.

How can our Medallion signature guarantee solicitors help?

Lester Aldridge is pleased to be the first law firm in the UK to be authorised to act as a guarantor under the US Medallion Signature Guarantee STAMP programme.

To complement the firm’s specialist services in assisting executors and beneficiaries around the world with administering estate assets located in North America, Lester Aldridge has now extended its offering and is an authorised guarantor to handle Medallion Signature Guarantee applications, without having to refer any part of the process to a third party.

Complimentary services include applying for and obtaining IRS clearance by way of transfer certificates and 706 applications, applying for surety bonds to obtain replacements for missing share certificates, and dealing with US unclaimed property applications, among a host of other services.

If you require assistance with a medallion signature guarantee that is required, please contact the International Probate team at Lester Aldridge, who would be pleased to assist you.