Dealing with Shares and Stocks

When a loved one passes away, the responsibility of managing their estate often falls to the executor of their will. Among the many tasks, one of the more challenging duties is identifying, valuing, and distributing the deceased’s shares and stocks. This article provides guidance on how to handle shares and stocks during the estate administration process.

Understanding Share Ownership

If the deceased held shares, they likely received dividends, which are payments made by companies to shareholders. Dividends are often paid directly into the shareholder’s bank account or sent by cheque. These payments typically come with a dividend counterfoil, which is a document issued by the company’s registrar as proof of payment. These counterfoils are important as they not only serve as evidence of share ownership but also provide a starting point for tracing and confirming shares.

Identifying Shareholdings

Identifying whether the deceased held shares can be tricky, especially if there is no clear documentation. Here are some steps to help you identify potential shareholdings:

1. Search for Share Certificates: Check the deceased’s personal belongings for any share certificates. These documents are direct evidence of share ownership, although modern share certificates can be quite basic and easy to overlook.

2. Review Bank Statements: Look at the deceased's bank account statements for any dividend payments. Regular deposits from company names could indicate share ownership.

3. Check for Dividend Counterfoils: These are usually sent alongside dividend payments and can be a useful indicator of share ownership.

4. Look for the SRN/IVC Number: On any dividend counterfoil or share certificate, there is typically an SRN (Shareholder Reference Number) or IVC (Investor Code) number at the top right-hand side of the page. This unique identifier can be used by registrars to confirm shareholdings.

Confirming Share Ownership

Once you've found potential evidence of share ownership, the next step is to confirm the validity of these shares. Unlike with bank accounts or property, there is no central registry that lists all shares owned by a person. Stockbrokers, who typically manage share trades, do not have access to all shareholder registers and therefore cannot independently verify if the deceased owned shares.

However, you can confirm shareholdings by contacting the company’s registrar. To do this, you'll need either a copy of the share certificate or some form of documentary evidence, such as a dividend statement. The registrar will use the SRN/IVC number to verify ownership.

Valuing Shares for the Estate

Once you've confirmed the shares, you will need to determine their value. This is necessary for completing the SA2 form, which is used for inheritance tax purposes. Davy’s Valuation Service can assist with this process, providing accurate valuations of shares as required by law.

Distribution of Shares

After the shares have been valued, you can distribute them according to the terms of the will. This may involve transferring the shares to beneficiaries or selling them and distributing the proceeds. The exact process will depend on the instructions in the will and the wishes of the beneficiaries.