'These shares are the only assets in her estate without designated beneficiaries'

"We're simply trying to avoid probate for this one asset." (Photo subject is a model.)

Dear Quentin,

My 91-year-old mother is bedridden in an assisted-living memory-care facility in Virginia.

She owns about $100,000 of Consolidated Edison stock that is held at a company I'll call Acme Corp., a well-known stock-transfer agent, as a paper stock certificate. I hold durable power of attorney for her and am the named executor of her will.

My mother is bedridden and has very limited use of her hands. She has mild dementia but is still capable of making decisions, and she recognizes her three children. These shares are the only assets in her estate without designated beneficiaries.

Acme says that before beneficiaries can be added, the paper certificate must first be converted to electronic (book-entry) form. That requires submitting a transfer request with a medallion signature guarantee.

This is where we're stuck. Despite having a valid power of attorney, I've been unable to obtain an MSG. Multiple banks, brokerages where I have accounts and even an online MSG service have all declined to provide one.

We're simply trying to avoid probate for this one asset. Is there any way to add beneficiaries or otherwise avoid probate without obtaining an MSG? Are there alternatives that Acme might accept in these circumstances?

The Son

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You are making a lot of extra work for yourself by trying to add a beneficiary to this paper stock certificate.

Dear Son,

Is it worth all this hassle?

This is becoming an estate-planning nightmare because (a) it's a tricky situation and (b) you're trying to use power of attorney for a job it wasn't designed to do: unlocking a paper certificate that predates electronic transfers. Your mother has dementia, and you are making a lot of extra work for yourself by trying to employ the power of attorney to add a beneficiary to this paper stock certificate.

I can save you some time, I hope. Most banks won't issue a medallion signature guarantee for someone who isn't already a customer with assets on deposit, which is very likely why your pleas when cold-calling banks and online MSG services keep falling on deaf ears. Companies are first and foremost worried about liability. A medical letter attesting to your mother's health might help.

A medallion signature guarantee, for those who are unaware, is a special certification for transferring or selling securities like stocks and bonds. It verifies the signer's identity and legal authority to complete the transaction, and - this is the key part - makes the issuing financial institution financially liable if the signature proves to be fraudulent.

Here's what the banks aren't telling you: There are institutions that issue MSGs for transactions involving powers of attorney, but their policies vary from company to company. Some will refuse to do them and others may require the principal - in this case, your mom - to appear in person, but there are some companies that will issue MSGs for homebound or incapacitated customers.

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Before you go further afield, though, go back to Acme itself. Ask its transfer services or escalations department - a specialized unit a step above general customer service - whether an MSG is really the only acceptable form of authentication, or whether they'll take a notarized affidavit, a signature guarantee from a different program, or a court order instead. You may be solving for a requirement that has more flexibility than the front line let on.

So what else can you do? You could contact a trust and estate attorney, which could cost you thousands of dollars in legal fees. Another possibility: If you can open a brokerage account in your mother's name and deposit the certificate via a transmittal/deposit, some firms may process it without an MSG. But this depends entirely on the brokerage's policy for depositing paper stock certificates. That could lead you on yet another paperless chase.

Your mother has not cashed out these shares in the last 10, 20 or 50 years, so there's no market-timing urgency here. But there is another kind of urgency: If her capacity continues to decline, some of these "workaround windows" that require her to appear in person or affirm her own wishes will eventually close entirely.

You're not the only person to have an allergic reaction to the idea of probate. Consider filing a small-estate affidavit or summary probate, which is often less expensive and faster than the full probate process. (To qualify for small-estate probate, the amount in most states is somewhere between $50,000 and $150,000, so this might work out perfectly for your mother's stock certificate.)

Decide how much time this issue deserves. If Acme won't budge, small-estate probate could provide a more-than-adequate safety net.

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-Quentin Fottrell