Can an executor sell stock?
If the will specifies that the stocks should be sold, then the executor is obligated to follow the terms of the will and liquidate the stocks. Likewise, if the will specifies that the stocks should be transferred, the executor must obey those instructions.
You will need to have the share certificates to hand before instructing your sale. You can use our Generic Postal Dealing Form to sell single or multiple holdings, the form also offers solutions for missing certificates. The form and full guidance notes can be downloaded here.
To facilitate a transfer, the executor will need a copy of the decedent's will or a letter from the probate court confirming that the beneficiary in question is indeed the person entitled to receive the shares. The executor must then send these documents to a transfer agent, who can complete the transfer of ownership.
When the Executors are ready to distribute the assets of the estate they will advise the company to whom the shares should be transferred. The company then transfers the shares from out of the name(s) of the executors to the Beneficiary.
Once you officially inherit the stock, you can sell your shares at any time, similar to how you would cash out any other stock or asset. Note that selling inherited stock may have tax implications depending on your timeline. Consult with a tax professional to see the impact of selling an inherited stock.
Following the issue of a grant of probate or letters of administration, the personal representatives do not need to be included on a company's register of members before transferring the deceased's shares to the ultimate beneficiary, a transmittee may transfer the shares to another person without being a registered ...
What Happens to Shares When a Shareholder Dies. If a shareholder dies their estate, including their shares, passes under the terms of their Will. If the deceased did not leave a Will the shares and estate pass by intestacy rules.
For tax purposes, the cost basis of inherited stock is typically the value at the time of the giver's death, not the original purchase value. Inherited stock is always taxed at long-term capital gains rates regardless of the length of ownership by the giver or recipient.
The assets in question could be all manner of things, from houses and vehicles to stocks and money in a bank account. It could even be an old collection of baseball cards or comic books. It's all subject to probate unless it is a part of a class of items sheltered from probate.
This scenario is called a step-up basis, which applies to many inherited capital assets. You can hold the stock (any value increases after you inherit it will result in capital gains) or sell it at the stepped-up value without owing capital gains taxes.
Can an executor withdraw?
Conversely, if no steps have been taken at all, an executor can be invited to 'renounce' their position, that is to say, step down from the role.
- Affidavit sworn in by the claimants.
- Indemnity Bond.
- Title Claim Form.
- No Objection Certificate from other heirs in favour of person claiming the title to shares.
- Surety Form.
- Appoint a broker/advisor.
- Provide the following documentation to the broker: SRN statements of holdings. Certified copies of the following: Death Certificate. Probate and Will extract or Letters of Administration or Small Estate Indemnity and Will or Intestacy Request and Indemnity.
If the executor files an estate tax return, they could use an alternate valuation date of up to 6 months from the date of death. When you sell an inherited asset for more than the stepped-up cost basis, it would be counted as a long-term capital gain for tax purposes.
Beneficiaries can do what they want with the stock they inherit. The options are to keep or sell it.
To transfer ownership of securities, they must be registered as transferable on death with the financial intermediary from whom they were purchased. For example, if the securities were purchased from a brokerage house, they must be registered as transferable on death with the same brokerage house.
You are free to sell it, give it away or name a different beneficiary. But on your death, the beneficiary can claim the securities without probate, simply by providing proof of death and some identification to the broker or transfer agent.
All worldwide assets, such as cash and investment accounts, ISAs and shares, are valued as at the date of death, but are not distributed until probate is granted.
This means that once you pass away, your beneficiaries will inherit the brokerage account in its entirety, including any stocks you held at the time of your death. This might be the simplest way to pass on stocks and other investments, especially if you're married.
Many people worry about the estate tax affecting the inheritance they pass along to their children, but it's not a reality most people will face. In 2024, the first $13,610,000 of an estate is exempt from taxes, up from $12,920,000 in 2023.
What is considered a large inheritance?
A large inheritance is generally an amount that is significantly larger than your typical yearly income. It varies from person to person. Inheriting $100,000 or more is often considered sizable. This sum of money is significant, and it's essential to manage it wisely to meet your financial goals.
Inheritances — Your holding period is automatically considered to be more than one year. So, when you sell the inherited stock, it's subject to long-term capital treatment.
While it is not possible to sell investments before probate is granted, there are ways to protect assets from probate and possibly even avoid probate entirely.
The General Rule | Shares
However, it is likely to be several weeks if not months before the executors of an estate are in a position to deal with transferring or selling shares that belonged to the deceased. They will normally have to wait until they have obtained the grant of probate.
Assets like health or medical savings accounts, life estates, life insurance policies, retirement accounts — including IRAs and 401(k)s — and annuities allow you to name a beneficiary. This means that when you die, those assets will be given directly to the person you appointed without having to go through probate.
