Can shares be disowned / ignored?

Ma1cD0g

This is my first post since joining this week. I am completing probate following a death in the family (nearly 3 years ago now) and there are a few shares traded in the USA. In order to sell them for the beneficiaries of the will, it's necessary to provide a Medallion Signature Guarantee (for signature authorisation certification, required by the US as we reside in the UK). This typically costs £295 incl. VAT, but the shares are currently only worth about £100. Clearly this is not cost-effective. If I choose to simply leave the shares in the name of the deceased and do nothing, can I allow them to lapse in some way - i.e. simply ignore them as a write-off? I could tell the company I intend to do this, purely for information, but they wouldn't recognise my authority as executor of the will, so I doubt there's any point. Or am I forced, as the executor, to re-register or sell the shares, accepting the loss involved? Any thoughts? Thanks. Malc

Stubod

..well I know what I would be doing!!  (...no point in incurring costs for no benefit??)

Malthusian

As executor you must distribute the shares in accordance with the Will. Leaving them to rot in the deceased's name is a tempting option but it leaves your job unfinished.

Is it worth asking the US share registrar whether the shares can be donated to charity? You would of course need the consent of all affected beneficiaries. Although ShareGift is in the UK, it might be worth asking if they accept US-registered shares.

Ma1cD0g

Thanks for the suggestions. However, as the shares are in the name of the deceased and the US share registrar has no knowledge of me acting as Executor, I can't see how the shares could be donated without that Medallion Guarantee to give me the right to do it.

LHW99

Do you have a stocks & shares ISA / SIPP or trading account? Some platforms do trade US shares

I don't know how this works, but if you do have such an account it could be worth just enquiring with the platform to see if they have any suggestions.

Thrugelmir

You role as executor is to finalise the affairs of the deceased. Not dealing with the shares leaves a loose end.  You don't incur the loss, the estate does. Though you could get the shares transferred into a beneficiaries name. One day they could be valuable. 

jamei305

You have a fiduciary duty to act in the best interest of the beneficiaries. I would suggest  that incurring a fee so large that you made a loss on realizing the value of these shares would not be to their advantage. Even if the shares later increase dramatically in value, as long you can show that you deemed that so unlikely now that it wasn't worth losing £195 for the possible future gain then you've done your duty IMO.

Ma1cD0g

Thanks to all for your thoughts. jamei305, I just sent an enquiry via the Medallion Guarantee website. The reply included this: "If the stock remains undealt with, it would usually be claimed by the state and classed as abandoned property.". Obviously this isn't meant to be taken as personal advice, but it's useful to know the likely outcome, which I would be ok with. I agree that the best interest of the beneficiaries comes into play. If I choose this course, I'll certainly keep evidence of my reasoning.

underground99

The shares are in a 'limited company' which means the owners liability for the activities of the company is limited to the capital put in. In other words, if you don't deal with the stock, it's not like the company or its suppliers or customers can sue the estate. So by not chasing down and dealing with the shares you are simply giving up the deceased's rights (if e.g. the state claims the abandoned assets for its own purposes) rather than exposing the deceased's estate to legal problems from the company or its registrar.

Looked at 'in the round' it doesn't make a lot of sense to spend £300 to assert the estate's rights over £100-worth of shares.  Overall the economic benefits are negative at current valuations.

However, that's the estate as a whole. Depending on how the estate as a whole is going to be carved up, the individual who was supposed to be a beneficiary of the shares, may be aggrieved if they didn't get them.  For example if I am supposed to inherit a shares portfolio and someone else is going to inherit a house and someone else is supposed to inherit the remaining cash, I would be quite happy for the estate to spend its cash to recover my £100 of shares, even if it cost the estate £300 to do so, because that's not my problem - I'm not supposed to be paying the bill - the estate is.

Whereas if the same person or group of beneficiaries is going to inherit both the remaining cash and the remaining shares, they would probably be quite happy that there was £300 extra cash rather than £100 extra shares.  If they wanted those £100 shares they could buy them in the market with the £300 extra that they were able to inherit, and be better off.

If that is approach you plan to take (abandoning the shares to preserve a larger amount of cash) it would be better to tell the affected beneficiaries that that's what you propose to do so that they can agree it's in their best interest - rather than just doing it and 'keeping evidence of the reasoning'. If the shares ballooned 10x in value in a few months or years time, a disgruntled beneficiary would be within their rights to ask why you didn't do your job and distribute them to the beneficiaries because with the benefit of hindsight, the 'reasoning' to save a few bob might be considered flawed.

Ma1cD0g

Thanks underground99 - that's all helpful insight. There are 2 beneficiaries who each receive exactly half of everything. So they would simply lose out by about £100 each if the shares were formally sold. They're both in agreement that it's better to let them go. Thanks everyone. I'll leave it there.

eskbanker

Ma1cD0g said:

Thanks underground99 - that's all helpful insight. There are 2 beneficiaries who each receive exactly half of everything. So they would simply lose out by about £100 each if the shares were formally sold. They're both in agreement that it's better to let them go. Thanks everyone. I'll leave it there.

Perhaps worth getting them to put that in writing if you haven't already?