death and shares

Seawolf

I asked HSBC Invest direct what would happen if I had shares in my name and I died and my children wanted to freeze the shares in order to prevent any possible losses in the event of crashes etc. They said that my children would have to produce a probate certificate, however, obtaining that could take months. There must be some way whereby the shares' value could be frozen? Does anyone out there know please?

Reaper

Shares can't be "frozen", they trade on the open market and sell for the current price. Nobody will volunteer to buy them off you at the price they were at the time of death (if higher). Why would they? Would you?

They only way to stop them changing in value is to sell them and your children would need probate to be allowed to do that.

However presumably you expect them to be more likely to go up in value than down in value otherwise you wouldn't have them in the first place.

lisyloo

I don't think you can "freeze" shares, but you can certainly sell them and put them in a cash account.
One way this could be done more quickly is if you set up a power of attorney.

I did this when it was free to do so some years ago.
I believe there are costs assocaited now, but it does mean someone can take charge more quickly (not instantly I don't think as it has to be registered).

We did this mainly in case myself or my husband were incapacotated e.g. in a coma.

noh

Power of attorney ceases on death so no use in the scenario described by the OP.

noh

My mother died on 11/09/2001.
Unforseen external events can have a dramatic effect on prices.
It may not be beneficial to freeze prices on the date of death even if you could.

Seawolf

Thanks for your answers, though I'm still in the dark.

Enduring power of attorney ceases on death.
It could take six months to obtain probate, the shares could drop markedly in that time.
It happened when my husband died in September 2008 and the market started plunging early October 2008. My husband's broker had some leeway with Skandia and managed to freeze the shares but not before quite a bit was lost. It was a nightmare.

Once bitten, twice shy.

TheMatrix_2

Seawolf wrote: »

My husband's broker had some leeway with Skandia and managed to freeze the shares but not before quite a bit was lost. It was a nightmare.

How did he do that, shares can only be sold or brought, the only way they can be frozen is if the market is closed. Then you are liable to gaping once the markets open back up again

Sparky47

As already said, you cannot freeze shares only sell them.
The value of shares will always go up and down, so if you are not happy with that situation, then sell the shares now while you are still alive.

xrjtg

Seawolf wrote: »

It could take six months to obtain probate, the shares could drop markedly in that time.

An obvious point, but it's not been made explicitly: they could also go up a lot in that time.

lisyloo

Just wondering but could the share holder put a stop loss system in place
e.g. an advance order to sell at a certain price, so if they fell they'd get sold.

I think I had this facility on interactive investor website although I don't know how long the advance orders could be valid for.

Could he/she prepare instructions for a broker in advance.

DavidHayton

Seawolf wrote: »

I asked HSBC Invest direct what would happen if I had shares in my name and I died and my children wanted to freeze the shares in order to prevent any possible losses in the event of crashes etc. They said that my children would have to produce a probate certificate, however, obtaining that could take months. There must be some way whereby the shares' value could be frozen? Does anyone out there know please?

Two ideas ...

They could use a spreadbetting service to hedge the risk. For example if there were 10000 Vodafone shares in your account, your children could "sell" 10000 Vodafone shares in a spreadbetting account. They then close the spreadbetting position when they sell the shares.

Alternatively, if the shares are held directly (outside an ISA or pension scheme) you could consider adding your children as joint account holders to your sharedealing account. Then, should you die, the shares will pass to them as surviving joint account holders. In the meantime, you can tell HMRC that the money in the joint account belongs to you. Naturally you have to trust your children to go down this route!

Best wishes
David