22/05/2009
Probate valuation expert, Pam Dexter, explains the finer detail of valuing and verifying stocks and shares for probate.
Don’t forget to verify the holdings
When a deceased holds stocks and shares, these will need to be valued before the Grant of Probate can be obtained. Gathering together a list of shareholdings is, however, not always easy for the Executors or family to produce. Many times the holdings at the date of death are not clear, particularly if the deceased’s records are muddled or out of date or the holding has been accruing additional shares in lieu of dividends. As it is important to be sure of the correct number of shares held before valuing the holding, good practice dictates that the holdings should be verified before producing an accurate valuation. This is particularly important where the estate is liable for IHT, as if the number of shares is incorrect then the tax paid will, of course, be incorrect and this may result in protracted liaison with HMRC.
Firms that specialise in probate valuation like Title Research are best placed to spot immediately where information is incomplete or historic and have access to historic records and databases to follow through the company history in order to ascertain the current likely holdings which can then be verified. In such cases, it is not uncommon to identify additional potential holdings following, for example, a demerger. Occasionally there is even money held on Dissenters’ Registers waiting to be reclaimed for the estate following an acquisition.
Sale or transfer?
Having obtained the Grant of Probate (or in Scotland, Confirmation) it becomes necessary to sell or transfer the holdings as required. Whilst, in theory this should be relatively straightforward, the process can be slowed down considerably by incomplete paperwork or lack of familiarity with the processes.
At the outset, the Grant should be lodged and it is advisable to check that the certificates in your possession are not only valid but represent the entire holding. If the holding is receiving additional shares in lieu of dividends or has been involved in a recent Company action the holding may not be the same as it was at date of death.
It is not uncommon to find that some share certificates are missing. In these cases, it will be invariably necessary to obtain replacement certificates but note the Registrars will charge both an administrative fee and an Indemnity fee which will vary according to the value of the holding.
Tying up loose ends is time consuming and frustrating. Inevitably, there are very often dividends to be reissued because these will have been retained by the Registrars if the death was registered. If the death was not registered then these will have been issued in the name of the deceased and will usually have remained unbanked and will require reissuing.
By far the easiest and cost effective way of dealing with probate valuations is to engage a specialist firm to take care of the end-to-end process and avoid any pitfalls and hassle; a firm that understands the requirements of the Registrars and will undertake to complete all the administration involved in selling or transferring the deceased’s holdings and reclaiming dividends for a fixed fee per holding.