You can put stocks into a trust, and the mechanics are simpler than most people expect: you change the registration on your brokerage account (or on your paper certificates) from your personal name to the trust’s legal name. That single act, called retitling, is what actually moves the shares. Putting stocks in a trust keeps them out of probate, lets a successor trustee manage them if you become incapacitated, and — depending on whether the trust is revocable or irrevocable — either changes nothing about your taxes or reshapes your estate, gift, and capital gains picture in ways that are hard to reverse.
How to Retitle Stock Into a Trust
The brokerage account registration has to change from something like “Jane Smith” to something like “The Jane Smith Revocable Trust, dated March 15, 2026.” Until that registration change is made, the shares remain your personal property and will pass through probate no matter what your trust document says.
You work directly with your brokerage firm. Most firms want a copy of the trust agreement, or at minimum the first and last pages plus the trustee certification page, so they can confirm the trust exists and see who has authority to act for it.1Mellon Investor Services Guide. A Guide for Transferring Stock You’ll also fill out the firm’s own re-registration form. Some brokerages accept digital uploads; others still require paper. Call first and ask for the checklist before you start gathering documents.
Paper stock certificates add a step. You’ll need a Medallion Signature Guarantee, a stamp from a participating bank, credit union, or brokerage that verifies your identity and authorizes the transfer.2Investor.gov. Medallion Signature Guarantees: Preventing the Unauthorized Transfer of Securities Expect the stamp to come from a financial institution where you already have a relationship. Walk-ins are routinely turned away.
Revocable or Irrevocable
Which type of trust you use governs almost every other question that follows.
Revocable Living Trust
This is the common choice for holding stock. You keep full control. You can buy, sell, change beneficiaries, or dissolve the trust whenever you want. You usually serve as your own trustee, so managing the portfolio feels no different than owning the account outright. The point is probate avoidance and continuity of management if you’re incapacitated.
What you don’t get: any estate tax reduction, and any protection from your personal creditors. Because you can still take everything back, the IRS and creditors both still treat the shares as yours.
Irrevocable Trust
Here you give up ownership and control permanently. You can’t take the stock back, can’t change the terms, and generally can’t swap assets in and out. That surrender is the whole mechanism: because the assets aren’t yours anymore, they’re removed from your taxable estate and are usually beyond the reach of your personal creditors.
For someone with a portfolio expected to grow, the estate tax benefit can be large — all future appreciation on stock inside the trust stays out of your gross estate at death. The catch is that the decision is permanent, and the basis rules described below can be brutal if you fund the trust with stock that has already run up in value.
How the Stock’s Income Gets Taxed
The IRS classifies trusts as either “grantor” or “non-grantor” for income tax purposes. That label — not the revocable/irrevocable label — determines how the dividends and gains are taxed, though in practice the two usually track each other.
A grantor trust is invisible for income tax purposes. All dividends, interest, and capital gains flow through to your personal Form 1040 at your individual rates under Internal Revenue Code sections 671 through 679.3Internal Revenue Code. 26 USC 671 – Trust Income, Deductions, and Credits Attributable to Grantors and Others as Substantial Owners Most revocable trusts are grantor trusts. Some irrevocable trusts are deliberately drafted to keep grantor status for income tax purposes while still shifting the assets out of the estate.
A non-grantor trust is its own taxpayer. It files Form 1041 and pays tax on any income it keeps rather than distributes.4Internal Revenue Service. Instructions for Form 1041 and Schedules A, B, G, J, and K-1 (2025) Trust brackets are steeply compressed: for 2026, a trust hits the top 37% federal rate on taxable income above just $16,000.5IRS.gov. 2026 Form 1041-ES Estimated Income Tax for Estates and Trusts An individual doesn’t reach 37% until income is well into six figures. Because of that compression, trustees of non-grantor trusts usually push investment income out to the beneficiaries, who then pay tax on it at their own (usually lower) rates.
Step-Up vs. Carryover Basis
This is the single biggest tax consequence of choosing between revocable and irrevocable, and it surprises people more than anything else in trust planning.
Stock in a revocable trust gets a step-up in basis at your death. The cost basis resets to the fair market value on the date of death, and every dollar of gain accumulated during your lifetime disappears for capital gains purposes.6Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent If you bought at $10 and the stock is worth $100 when you die, your beneficiaries inherit it with a $100 basis and can sell immediately with no capital gains tax. That step-up exists precisely because revocable trust assets are still part of your gross estate.
Stock gifted into an irrevocable trust during your lifetime generally keeps your original basis — a carryover basis.7Office of the Law Revision Counsel. 26 USC 1015 – Basis of Property Acquired by Gifts and Transfers in Trust Same example: beneficiaries inherit the $10 basis and owe capital gains tax on $90 per share when they sell. The IRS confirmed in Revenue Ruling 2023-2 that even intentionally defective grantor trusts — irrevocable trusts still taxed to the grantor on income — get no basis step-up unless the assets are pulled back into the grantor’s gross estate.
The practical rule: irrevocable trusts pay off when you fund them with stock you expect to appreciate a lot from that day forward, because the future growth escapes estate tax and the carryover basis only applies to the value at the time of the gift. Transferring already-appreciated stock into an irrevocable trust locks in a large future capital gains bill for your beneficiaries.
Gift Tax Reporting When You Fund an Irrevocable Trust
Moving stock into an irrevocable trust is a completed gift for federal tax purposes. You can give up to $19,000 per recipient in 2026 without any gift tax or reporting requirement.8Internal Revenue Service. What’s New – Estate and Gift Tax Anything above that annual exclusion has to be reported on Form 709 and eats into your lifetime exemption.9Internal Revenue Service. Instructions for Form 709 (2025)
The federal lifetime gift and estate tax exemption for 2026 is $15,000,000 per person, following the increase enacted by the One, Big, Beautiful Bill Act signed into law on July 4, 2025.8Internal Revenue Service. What’s New – Estate and Gift Tax Most people will never owe gift tax at that level, but the Form 709 filing requirement still applies whenever a gift exceeds the annual exclusion, because filing starts the statute of limitations on the gift’s valuation.
Stock Types That Need Extra Care
Not every share of stock transfers cleanly.
S-Corporation Stock
S-corporations can only have certain kinds of shareholders. Put S-corp stock into the wrong trust and you terminate the S-election, converting the company to a C-corporation with double taxation. A standard revocable (grantor) trust is fine during your lifetime — grantor trusts are on the list of eligible S-corp shareholders.10Office of the Law Revision Counsel. 26 USC 1361 – S Corporation Defined
After the grantor’s death, the trust remains an eligible shareholder for only two years.10Office of the Law Revision Counsel. 26 USC 1361 – S Corporation Defined After that, the trust either has to distribute the shares to an eligible individual or qualify as a Qualified Subchapter S Trust (QSST) or Electing Small Business Trust (ESBT). Both require specific drafting and a formal IRS election. If your estate includes S-corp stock, the trust needs to be written with the two-year deadline in mind from the start.
RSUs and Stock Options
Restricted stock units and incentive stock options generally can’t be transferred into a trust before they vest. Most corporate plans prohibit it outright, and unvested RSUs aren’t really shares yet — they’re a promise contingent on continued employment. Once RSUs vest and the shares land in your brokerage account, they retitle like any other public stock. Check your employer’s plan documents before assuming a transfer is possible.
Closely Held Business Stock
Shares in a private company usually come with a shareholder agreement that restricts transfers. Rights of first refusal, buy-sell provisions, and consent requirements can block or delay a transfer to a trust. Read the agreement before starting. If the stock is going into an irrevocable trust, you’ll also need a formal business valuation for the Form 709, since there’s no market price to reference.
Stocks Inside Retirement Accounts
This is the trap that catches the most people. Stocks held inside an IRA, 401(k), or other qualified retirement account cannot be retitled into a trust. Pulling the assets out of the retirement wrapper triggers immediate taxation of the entire balance as a distribution. The tax-deferred structure is the asset, and that structure can’t be moved into a trust.
Instead, you name the trust as the beneficiary of the retirement account. The account stays in your name while you’re alive, and the trust receives the proceeds at your death. Under the SECURE Act’s 10-year rule, most non-spouse beneficiaries have to withdraw the entire inherited IRA within 10 years of the original owner’s death. When the beneficiary is a trust, the trust must qualify as a “see-through” trust for the IRS to look through it to the underlying beneficiaries and apply the 10-year rule instead of the more aggressive 5-year rule.
A see-through trust has to be valid under state law, become irrevocable at the owner’s death, and have identifiable beneficiaries. Generic trust documents almost always fall short of these requirements, and the cost of getting it wrong is accelerated taxation of the whole retirement balance. If retirement accounts are a big part of your wealth, the trust has to be drafted specifically to handle them.
What It Costs
An attorney-drafted revocable living trust typically runs $1,000 to $5,000 for an individual. Joint trusts for married couples run 25% to 50% higher. Estates with business interests, multiple property types, or specialized provisions like S-corp shareholder language can push fees above $10,000. Online trust services are cheaper, but for portfolios with any of the complications above, attorney drafting is worth the money.
If you use a corporate trustee — a bank or trust company — instead of a family member, expect ongoing fees of roughly 1% to 2% of assets under management annually, sometimes with additional charges on income the trust generates. Get the full fee schedule in writing before you sign.
Medicaid Timing on Irrevocable Transfers
Some people move stock into an irrevocable trust to protect assets from being counted for long-term care Medicaid eligibility. Federal law imposes a 60-month look-back on most transfers. Move stock into an irrevocable trust and apply for Medicaid within five years, and the transfer is treated as a disqualifying gift that triggers a penalty period of ineligibility.
Worth flagging: the gift tax annual exclusion and Medicaid transfer rules are separate systems. Giving away $19,000 or less keeps you clear of federal gift tax reporting, but Medicaid doesn’t care about that threshold. Any transfer for less than fair market value during the look-back period counts, regardless of size. Planning around Medicaid means starting the clock well before you expect to need care — five years is the minimum runway.