Q&A: Who gets the dividend?

Question: If shares or trust units sold five days before a dividend payment who gets the dividend, the seller or the buyer? – James M.

Gordon Pape answers: In the time frame you mention, usually it will be the buyer. It depends on the “record date” – that’s the date on which all investors who own shares or units qualify to receive a payment. It is usually several weeks before the actual payment date. If the trade is settled after the record date, then the buyer receives the dividend. If it is before, the dividend goes to the seller. When a stock trades “ex-dividend” it means that the record date for the next payment has passed.

You can usually find the record date for all dividends by checking a company’s or a trust’s website.

Do you have a money question you’d like to ask Gordon Pape? E-mail it to [email protected] and then check our website every week to see if it was chosen for a response. Sorry, we cannot send personal answers.