I asked the question kind of out of context.... I should probably fill in some details about my experience and where I'm coming from with this inquiry. This is something that other folks, perhaps everyone with investments, might be interested in, and so I should share what little I know, from my own experience, just to start things off.
A Medallion Signature Guarantee is a certification a bank officer applies to a written letter of instruction to a brokerage, attesting to the identity of the person signing the letter, and promising that if it turns out that the person signing is not the person who they are attested to be, that the bank granting the Medallion Signature Guarantee will be financially liable for any and all losses stemming from the brokerage following the instructions in the letter of instruction. So, unlike a notary public, who just says, "Yeah, I'm pretty sure this is the person," a Medallion Signature Guarantee means, "I'm so sure that this is the person that if it is not, and someone loses money because of this, then I'll financially insure that loss."
The medallion isn't an embossed stamp, like you'd see with a notarization, but instead is a printed stamp, like
THIS, but instead of black, it is in lime green (at least all that I've seen).
My understanding is that there are only 700 banks in the country that offer the medallion, so it very possible that your bank doesn't even offer it. If you
do have a relationship with a bank that offers such guarantees, they will generally provide the guarantee to you for free. It should be noted that (at least at my bank) you have to have a pre-existing relationship with the bank, it cannot be "recent", and it must be "significant". By that I think they mean you cannot just write a check for $50 to open an account with them, and then get a Medallion Signature Guarantee from them. I have no idea what the SEC expects you to do if you don't have a significant relationship with one of these 700 banks.
Another complexity we encountered is that the brokerage insisted on all three surviving owners of the joint tenancy actually sign the physical piece of paper -- we couldn't each sign our own copies of the letter. Given that we live in three different states,
and bank at different banks (see above where banks won't provide the guarantee for non-customers), it meant that this same physical piece of paper had to travel from owner to owner. Even then, one of the bank officers objected saying that the three owners had to appear in front of her in person to sign the letter together (but she still refused to guarantee the signatures of non-customers).
However, the brokerage's form for the letter of instruction only had space for the signature of two owners! So I had to create my own form with space for all three of us. However, the bank objected to
that, saying that they want to only guarantee official brokerage forms. I had to get the bank officer and the brokerage CSR on the phone together, to have the brokerage CSR say that the brokerage would accept my homemade form. (The bank officer commented, afterward, looking at my homemade form and the brokerage's, that mine was better; in several ways: Not only was it more professional-looking and more flexible, but it actually had the brokerage's logo on it, and lines and such were in the brokerage's logo's color, blue, while the brokerage's form inexplicably had red lines, didn't have their logo on it, and didn't look very professional at all. She suspected that the brokerage would be calling me to get a copy of the Microsoft Word file.
)
Another complexity we encountered is that my bank (Bank of America) won't grant the medallion unless you have a recent statement of the brokerage account, to prove that it isn't worth more than $1M. They care about how much you have in the brokerage because, remember, they're promising to cover any financial losses associated with you not being who they say you are. I'm not sure what happens if you happen to have more invested than that, and need to have a medallion granted.
Having a recent statement may not seem like much of a problem, but in the case of a death of one account holder, with three surviving owners of a joint tenancy, plus the representative of the deceased, all having to issue the same instruction, all Medallion Signature Guaranteed, it isn't strange that at least two of those people don't happen to have a current statement of the account with them.
In the end, we did work out all the complexities, at least with the first letter of instruction. Now they're objecting to the fact that the name of the Certificate of Death doesn't match the name on the brokerage account. (My mother left her account in her first-married name, i.e., my father's, and therefore my, last name, but the Certificate of Death has her second-married name.) So now they want a letter certifying that the two names are the same person.
And guess what! They want that letter also Medallion Signature Guaranteed!
Anyway, my inquiry is not so much looking for guidance on dealing with it, but rather I'm interested in finding out whether other folks encounter complexities like we did, or was our experience unique. I'm especially interested in finding out what folks do if they don't have a relationship with one of the 700 banks that offer the Medallion Signature Guaranteed.
