How do I sell stock of a deceased person?
The process for liquidating inherited stock is fairly straightforward. Once the stock is in the beneficiary's brokerage account, they can sell the stock by placing a sell order through the brokerage. The beneficiary can choose to sell the stock all at once or to sell it in smaller portions over time.
After providing a death certificate, proof of identity, probate court order, and others, the heir can either transfer the shares into their account or sell the shares for the proceeds.
When someone passes, the executor of their will can choose to either to sell some or all of the shares owned by the deceased and pay the proceeds to each beneficiary, or they could transfer the ownership of the shares to the beneficiaries.
Most states have adopted the Uniform Transfer-on-Death Security Registration Act, which allows investors to designate a TOD beneficiary for any stocks they own. This enables the beneficiary to receive those stocks automatically once the holder passes away.
“Check any paperwork you have relating to the shares and you'll see who the registrar is.” You can then ask the registrar for a share sale form. Complete this and send it off along with the grant of probate and the death certificate in order to sell.
In these cases, it is usually up to the board of directors to decide whether or not they will require a Grant of Probate to be issued before actioning a sale or transfer. They may be agreeable to accepting other evidence instead, such as a certified copy of the Will.
Inherited stock doesn't incur capital gains on any growth prior to your inheritance, but any change in value thereafter will likely trigger capital gains taxes when sold.
- 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.
It is estimated that, on average, between 2% and 5% of a company's shareholders have either moved from the address to which the company sends correspondence, or have died. To track down lost shares the first step should be to contact the company's share registrar, in cases where the company name is known.
The cost base for the beneficiary for the purposes of CGT calculations is the market value of the shares as of the date of death. That is, the date on which the beneficiary is deemed to have acquired the shares as part of a deceased estate transfer.
Should executor sell stocks?
Liquidate financial assets
Talk to a highly qualified financial adviser but consider selling at least some stocks and bonds to minimize the risk of loss in capital. Before you sell any stocks, however, check the will to see if specific shares of stocks are in accounts like IRAs and 401Ks left to beneficiaries.
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.
There is no exact limit on when you need to claim funds, and you can certainly take some time to adapt to a loved one's death. However, it's wise to act promptly. Eventually, the account may go dormant, and banks might be required to turn over dormant accounts to the state for safekeeping (usually after several years).
Commission rate reduces to 0.25% on the remaining balance. For example, Certificated trade value is £54,000. 1.5% will be charged on £50,000 and then 0.25% will be charged on the remaining £4,000.
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.
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.
In general, file and prepare the final individual income tax return of a deceased person the same way you would if the person were alive. Report all income up to the date of death and claim all eligible credits and deductions.
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.
Inheritance is not income
As a general rule, cash or property you inherit from a decedent is not considered income. You don't have to report it on your income tax return. Of course, if you later receive income from that property (such as dividends on stock) you must report that income.
Most of the time, you calculate the cost basis for inherited stock by determining the fair market value of the stock on the date that the person in question died. Sometimes, however, the person's estate may choose what's known as the alternate valuation date, which is six months after the date of death.
What is a decedent transfer of stock?
Sometimes, people choose to make their securities “transferable on death”. This means that someone besides the original owner will become the securities' new owner when the original owner passes away. The transfer becomes effective automatically on death, regardless of any language in the original owner's will.
To determine the value of an old stock certificate, you will need to verify if the company is still active, the current (or most recent name) of the company and if its shares are still tradable.
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.
If you inherit property or assets, as opposed to cash, you generally don't owe taxes until you sell those assets. These capital gains taxes are then calculated using what's known as a stepped-up cost basis. This means that you pay taxes only on appreciation that occurs after you inherit the property.
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.
