7 Sample Letters of Instruction for Gifting Mutual Funds to Family (Free Templates)

Why gifting mutual funds is a smart family move

Mutual funds are familiar, scalable, and easy to automate, so your gift can become a long-term habit, not a one-time spend.

In fact, mutual funds are widely held: 71.0 million U.S. households owned mutual funds in 2024.
That’s why this topic performs well: readers recognize the asset and just need help with the paperwork and wording.

Real-life example: A grandmother gifts $2,500 of an index mutual fund to her granddaughter’s custodial (UTMA) account. The granddaughter learns investing basics early, and the family avoids the “here’s cash, hope you’re responsible” problem.

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What a “Letter of Instruction” is (and why brokerages love it)

A Letter of Instruction (LOI) is a short, direct letter that tells a brokerage or fund company:

• who you are,

• what you want transferred,

• where it should go,

• and how it should be handled (in-kind vs liquidate).

It’s persuasive because it prevents back-and-forth. Most transfer delays come from missing details, mismatched registrations, or unclear instructions.

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Gift shares or gift cash? Pick the cleaner route for your goal

Option A: Gift mutual fund shares “in-kind” (transfer shares)

You transfer ownership of shares to your family member (or their trust/custodial account). Many firms support this with specific gifting/transfer forms and written instructions.

My opinion: This is the best “teaching” gift because the recipient sees shares move into their account and feels ownership immediately.

Option B: Sell shares and gift cash

You sell and then gift the proceeds.

My opinion: This is the cleanest route when the recipient is likely to sell soon anyway (or when you want to simplify their future tax paperwork).

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The tax basics (plain-English and accurate)

Annual exclusion (2026)

For tax year 2026, the annual exclusion for gifts remains $19,000 per recipient.

Form 709 (gift tax return)

Form 709 is used to report certain gifts. Many people who file it still owe $0 gift tax, but you need to follow the rules when a gift is reportable.

Cost basis matters (this is where families get burned)

To figure the basis of property received as a gift, you generally need the donor’s adjusted basis, the fair market value at the time of the gift, and any gift tax paid (if applicable).

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Don’t get stuck: Medallion Signature Guarantee (MSG) in one minute

Some transfers (especially ownership changes or larger transfers) require a Medallion Signature Guarantee. It’s not a notarization, and a notary public can’t provide an MSG.
Your LOI can be perfect, but the transfer can still be rejected if the firm requires an MSG and you don’t include it.

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7 Copy-Paste Templates: Letters of Instruction for Gifting Mutual Funds

1) In-Kind Gift Transfer (Same Brokerage, Different Owner)

[Your Name]
[Your Address]
[City, State ZIP]
[Phone] | [Email]
[Date]

Transfers Department
[Brokerage Name]
[Brokerage Address]

Subject: Letter of Instruction – Gift Transfer of Mutual Fund Shares (In-Kind)

To Whom It May Concern,

I am the owner of account [Account Number] registered as [Exact Registration Name(s)]. Please complete an in-kind gift transfer of the mutual fund shares listed below from my account to the recipient’s account at your firm.

Shares to transfer (in-kind):

• Fund name: [Mutual Fund Name]

• Ticker (if applicable): [Ticker]

• Share class (if applicable): [Class]

• Shares: [Exact Share Quantity] (or “all shares”)

Receiving account:

• Recipient: [Recipient Full Legal Name]

• Relationship: [Relationship]

• Recipient account number: [Recipient Account Number]

• Registration on receiving account: [Exact Recipient Registration]

This transfer is a gift and not a sale or loan. (If this gift supports a home purchase, see 17 Best Gift Letter Samples for Mortgage for the wording lenders expect.)

Please process this request as soon as administratively feasible. If you require a Medallion Signature Guarantee or additional documentation, contact me at [Phone/Email] immediately.

Sincerely,
[Signature]
[Printed Name]

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2) Gift Transfer to a Different Brokerage (External / Firm-to-Firm)

[Your Name]
[Your Address]
[City, State ZIP]
[Phone] | [Email]
[Date]

Transfers Department
[Current Brokerage Name]
[Address]

Subject: Letter of Instruction – External Gift Transfer of Mutual Fund Shares

To Whom It May Concern,

I request an in-kind gift transfer of mutual fund shares from my brokerage account [Account Number] (registered as [Exact Registration]) to my family member at another financial institution.

Assets to transfer (in-kind):

Receiving institution / recipient:

• Receiving brokerage: [Receiving Firm Name]

• Recipient name: [Recipient Full Legal Name]

• Recipient account number: [Recipient Account Number]

Please advise whether your firm requires a Medallion Signature Guarantee for this ownership change (a notary is not an MSG).

Sincerely,
[Signature]
[Printed Name]

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3) Mutual Funds Held Directly With the Fund Company (Re-Registration Gift)

[Your Name]
[Address]
[Phone] | [Email]
[Date]

Shareholder Services
[Fund Company / Transfer Agent]
[Address]

Subject: Letter of Instruction – Gift Transfer / Change of Ownership

Dear Shareholder Services,

I am the registered owner of mutual fund account [Account Number] in the name of [Exact Registration]. Please transfer ownership of the following shares to the new owner listed below as a gift transfer.

Shares to be gifted:

New owner (recipient):

• Full legal name: [Recipient Name]

• Address: [Recipient Address]

• Tax ID (if required): [Provided on required form]

Please inform me if you require a Medallion Signature Guarantee or additional paperwork before processing.

Sincerely,
[Signature]
[Printed Name]

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4) Gift to a Minor (UTMA/UGMA Custodial Account)

[Your Name]
[Address]
[Phone] | [Email]
[Date]

Custodial Accounts / Transfers
[Brokerage Name]
[Address]

Subject: Letter of Instruction – Gift of Mutual Fund Shares to UTMA/UGMA Account

To Whom It May Concern,

Please transfer mutual fund shares from my account [Account Number] to the custodial account established for [Minor’s Full Name] under the [UTMA/UGMA] laws of [State].

Donor account registration: [Exact Registration]
Custodial account: [UTMA/UGMA Account Number]
Custodian: [Custodian Full Name]

Transfer (in-kind):

If you require proof of custodianship or signature guarantee procedures, notify me promptly.

Sincerely,
[Signature]
[Printed Name]

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5) Gift to a Family Trust (Recipient = Trust Account)

[Your Name]
[Address]
[Phone] | [Email]
[Date]

Transfers Department
[Brokerage Name]
[Address]

Subject: Letter of Instruction – Gift Transfer of Mutual Fund Shares to [Trust Name]

To Whom It May Concern,

I request an in-kind gift transfer from my account [Account Number] to the following trust account:

Receiving trust account:

• Trust name: [Full Trust Name]

• Trustee(s): [Trustee Name(s)]

• Trust account number: [Trust Account Number]

Shares to transfer:

This transfer is a gift, not a sale. If any authorization letter is required by your firm, use this wording as the primary instruction and advise what additional form(s) you require.

Sincerely,
[Signature]
[Printed Name]

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6) Letter to the Recipient (Makes the “Gift” crystal clear)

[Your Name]
[Address]
[Date]

[Recipient Name]
[Recipient Address]

Subject: Gift of Mutual Fund Shares – Confirmation for Your Records

Dear [Name],

I’m gifting you mutual fund shares to support your long-term financial goals. This is a gift (not a loan, and no repayment is expected). If you ever need lender-style language confirming this gift, here are examples: 17 Best Gift Letter Samples for Mortgage.

Gift details:

Tax note: If you sell these shares later, the taxable gain can depend on the original cost basis and the value at the time of the gift—keep the statements and confirmations you receive.

With love,
[Signature]
[Printed Name]

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7) Letter to Your CPA/Tax Preparer (Form 709 + documentation)

[Your Name]
[Address]
[Phone] | [Email]
[Date]

[CPA Name / Firm]
[Address]

Subject: Mutual Fund Gift – Documentation + Form 709 Review (If Required)

Hello [CPA Name],

I made a gift of mutual fund shares during [Tax Year] and want to ensure proper reporting and records.

Gift summary:

• Recipient: [Full Name]

• Date of gift: [MM/DD/YYYY]

• Asset: [Mutual Fund Name] (Ticker: [Ticker])

• Shares: [Number]

• FMV on gift date: $[FMV] (see attached confirmation/statement)

Please confirm whether a Form 709 filing is required and advise how to document cost basis details for the recipient’s future reporting.

Thank you,
[Signature]
[Printed Name]

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“Gift vs. Loan” warning (include this if there’s any chance of confusion)

If your family situation is “I’ll give it now and you’ll pay me back later,” that’s not a gift—it’s a loan. In that case, link readers to: 11 Promissory Note Sample Letters (Free Templates + Payment Terms Guide).

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If you gift cash instead of shares (easy internal link placement)

If you decide to sell shares and gift cash (or send money to fund the recipient’s purchase), add this line and link it:

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Checklist A: Before you send your LOI

Checklist B: After the transfer completes

Checklist C: Tax-time

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Short FAQ

Do I always need a Medallion Signature Guarantee?
No—requirements vary by firm, transfer type, and sometimes value. But if the firm requires one, a notary won’t substitute.

Does gifting mutual fund shares trigger capital gains immediately?
A transfer of shares is generally not a sale by itself, but future taxes can depend on basis rules when the recipient sells.

If I give more than $19,000 to one person in 2026, do I automatically owe gift tax?
Not automatically. It may require filing Form 709, and many filers still owe $0 depending on their overall situation.

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• IRS gift tax basics (official IRS video script page):

• Schwab: “How to transfer securities between accounts” (includes a video):

• Fidelity: “How to gift shares into or out of Fidelity” (process overview):

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• IRS: 2026 annual exclusion remains $19,000

• IRS: About Form 709 (gift tax return)

• IRS: Basis of property received as a gift (FAQ)

• ICI: 71.0 million U.S. households owned mutual funds in 2024

• Vanguard: Medallion Signature Guarantee overview (and notary limitation)

• Fidelity: How to gift shares (requires written request/forms)

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Disclaimer

This content is educational and provides general templates only: not legal, tax, or investment advice. Brokerage rules and tax outcomes vary, so confirm requirements with your financial institution and consult a qualified professional for your situation.