Disclaimer: The content provided in this blog is for informational purposes only and does not constitute financial advice.
When a loved one passes away, executors are often faced with the responsibility of managing and finalising the deceased’s estate. This can include the daunting task of selling shares that the deceased owned. Whether you’re looking to sell deceased estate (or inherited) shares understanding the process is crucial for executors to ensure a smooth and efficient handling of the estate’s financial assets. This guide aims to simplify the process, providing a clear path forward for executors tasked with this responsibility.
Understanding Your Role as an Executor
Before diving into the process of selling shares from a deceased estate, it’s important to understand the legal and fiduciary duties of an executor. As an executor, you’re responsible for managing the deceased’s assets according to their will or, in the absence of a will, according to the laws of intestacy. This involves a range of tasks from paying off debts and taxes to distributing assets to the rightful heirs.
Step 1: Gather the Necessary Documents
The first step in selling deceased estate shares is to gather all necessary documentation. This typically includes:
- The deceased’s will, if available
- Death certificate
- Share certificates or statements
- Probate or letters of administration
These documents are essential not only for verifying your authority as executor but also for the share sale process with brokerage firms or online platforms.
Step 2: Obtain Probate or Letters of Administration
Before any shares can be sold, it’s likely that you’ll need to obtain probate or letters of administration. Probate is the legal process that confirms the will’s validity and your authority as executor. In cases where there is no will, letters of administration serve a similar purpose. This step is crucial as it officially recognises your right to manage and dispose of the estate’s assets, including shares.
Step 3: Valuation of Shares
Valuing the shares is a necessary step before their sale. The valuation should reflect the market value of the shares at the date of death, as this will have implications for capital gains tax and the distribution of the estate. Professional financial advice or services from a stockbroker can be invaluable in accurately determining this value.
Step 4: Selling Deceased Estate Shares
Identify the Shares to be Sold
Gather all necessary documentation regarding the shares, including share certificates and any online brokerage account information. It’s crucial to understand what shares the deceased owned and in which companies these shares are held.
Value the Shares
For both tax purposes and equitable distribution among beneficiaries, it’s essential to get an accurate valuation of the shares as of the date of death. At Sell My Shares, we provide a share calculator tool to help with this valuation.
Transfer the Shares to an Estate Account
Before selling, shares typically need to be transferred to an estate account under the executor’s management. This process involves submitting the Grant of Probate or Letters of Administration, along with a death certificate and transfer forms to the brokerage or company’s share registry.
Sell the Shares
Once the shares are in the estate account, the executor can proceed with selling them. It’s advisable to consult with financial advisors or the beneficiaries before making any sales to ensure the best outcome for the estate.
Distribute the Proceeds
After the sale, the proceeds should be allocated according to the will or the laws of intestacy. Executors must keep detailed records of all transactions and distributions for estate accounting purposes.
Best Practices for Executors
- Understand Tax Implications: Selling deceased estate shares can have capital gains tax implications. It’s essential to consult with a tax professional to understand these implications and plan the sale accordingly.
- Keep Beneficiaries Informed: Throughout the process, maintain clear communication with the beneficiaries about the status of the share sales and any decisions made.
- Seek Professional Advice: Don’t hesitate to seek advice from financial advisors, tax professionals, or legal counsel to navigate the complexities of selling shares from a deceased estate.
By following this step-by-step guide, executors can confidently manage the process of selling deceased estate shares online. It’s a responsibility that, when executed carefully, ensures the deceased’s financial assets are handled with care and in the best interest of the beneficiaries.
