Transferring Shares

mum2g1b

I hope this is the right place to post this!
My father is 91 and I help him with his financial stuff. He is very sharp even at 91 but doesn't use computers etc so I help with that. I have no financial expertise and basically just do what he asks.
He is aware that at 91 he needs to make things as simple as possible with regards to his estate.

He wants to transfer a large number of shares that he owns into joint name (with my mum)- he thinks this will simplify things for her on his death. Mum doesn't manage the money at all- she just gets an allowance from dad every month and is happy with this- has no clue how to pay a bill and has no interest! So making things simple is important. The shares are currently just in his name.

Is it easy to transfer shares from a single name into a joint name and are there any tax implications?
I thought all shares transferred automatically to a spouse on death unless otherwise indicated in a will so is there any benefit in transferring them to joint name prior to death?

Thanks in advance for any help anyone can offer!

Savvy_Sue

I know nothing about shares, but two things spring to mind if he wants to make things as simple as possible.

1. He should make a will. The way you say 'unless otherwise indicated in a will' suggests he hasn't.

2. Both he and your mother should set up Lasting Powers of Attorney, I'd suggest with two attorneys each. That way, if your dad suddenly becomes unable to manage, one or other of the attorneys would be able to take over relatively easily.

mum2g1b

Thank you for your reply.
Dad has a will and after a bit of encouragement from me, we are in process of setting up Power of Attorney thing.

Unfortunately my Dad doesn't like the fact that he has to pay for all this! Dad doesn't like paying for services- he seems to think I can handle it all and I can't really- I don't know what I am doing but he seems to think I do cos I have managed this far! He won't pay for someone to manage his share portfolio for him- I know its pricey but I find it very stressful doing this- but have told him this many times but makes no difference!!

margaretclare

Two things spring to mind:

1. Managing a share portfolio is not a job for the uninitiated. I would suggest you need an IFA. If it really is shares and not funds. I have a stocks-and-shares ISA with funds and I've learned a bit over time, but shares are a different ball-game entirely. Have a look at: www.hl.co.uk

2. Your mum has 'no clue how to pay a bill'. How in heaven's name has she managed this far? If Dad is 91 how old is Mum? And what will she do if Dad pre-deceases her and her cosy little set-up disappears?

Errata

MC - it isn't a 'cosy little set up' it's how a married couple have managed their affairs to their own mutual satisfaction.

OP - tell your dad you don't have a clue about shares and their ownership, and keep on telling him. I found out (eventually) that if I kept repeating something every time a certain matter was given an airing my aged parent finally got the message

datostar

Shares don't automatically pass to a survivor on decease. The share registrar has to be notified and payment of dividends is suspended until an executor establishes his/her status. Dividends will then be paid to the executor until the shares are sold or transferred to someone else. Even if the shares are jointly held prior to decease, they will still have to be transferred to a sole name, although this will probably be a simpler process. It makes a difference whether the shares are held on certificate or in a nominee account. There aren't many tax implications to joint holdings unless any of the parties are higher-rate taxpayers so need to pay additional tax over and above the 10% already deducted. Non taxpayers can't reclaim that either.

Might be a good idea to establish the type of holdings (certificated or nominee account) and the identity of the broker or registrar.

mum2g1b

MC- Mum has managed because for 60 years they've been married and Dad has always managed the bank accounts etc. Dad has always paid the bills and when he dies (she's 83 so he is likely to go first) I will no doubt have to help her a bit but everything is pretty much on DD so not too hard. Can't really expect her to suddenly take over the reins after 60 years of Dad managing the money)- damn fine job he's done too really!

Datostar- thanks for that info. I know he has the shares in certificate form and think Equiniti are the registrar so maybe we should call them and ask them how to transfer to joint name. The worry my Dad has is their main source of income comes from the dividends from these shares so he is worried Mum won't have the income when he dies- he is worried everything will be frozen until probate etc.
They aren't higher rate taxpayers so that's ok. Thanks for the info.

Savvy_Sue

mum2g1b wrote: »

The worry my Dad has is their main source of income comes from the dividends from these shares so he is worried Mum won't have the income when he dies- he is worried everything will be frozen until probate etc.

And that's a real worry: even though Mum doesn't pay bills etc then making sure that their main account is a 'joint' one is usually a good idea, because those do pass automatically to the survivor - a sole account in Dad's name would be frozen on his death.

Can't help with how such an account would be topped up after death, I'm afraid!

margaretclare

'All the bills are on DD' - this will continue after Dad's death if they're being paid from a joint account. Not if the account is in his name alone. In that case his account would be frozen until probate was granted and no DDs or anything else would go out.

I have seen too many sad and distressing situations not to feel pretty strongly about this. It was the reason why DH and I set up our joint account to pay bills some years ago and it has worked well for us.

datostar

mum2g1b wrote: »

Datostar- thanks for that info. I know he has the shares in certificate form and think Equiniti are the registrar so maybe we should call them and ask them how to transfer to joint name. The worry my Dad has is their main source of income comes from the dividends from these shares so he is worried Mum won't have the income when he dies- he is worried everything will be frozen until probate etc.
They aren't higher rate taxpayers so that's ok. Thanks for the info.

Quite by coincidence this appeared today on the Motley Fool site - very relevant!
http://www.fool.co.uk/news/investing/2011/06/28/watch-out-for-these-share-certificate-pitfalls.aspx?source=ufwflwlnk0000001

mum2g1b

MC their bank accounts are all joint- always have been so not worried about that.

Thanks datostar- will have a look!