How share certificates will ruin your family’s life
They are perhaps the most popular form of investment we see on a daily basis here at SWW Trust Corporation: and of course, the investment in business capital which could potentially grow in value, and the dividends that they generate, are significant benefits to shareholders.
However, failure to keep your share certificates safe and available to your executors could mean months – potentially years – of frustration, expense and confusion after you have gone.
Buying and selling shares is not always as fast-paced as film and television depictions of YUPPIES would make it seem.
Unless your shareholding is electronically registered so that no certificate is required for transfers or sale, your shares probably need certificates as proof of ownership. When you pass away your executors will need to apply for Probate, and then register themselves as owners in your stead with the relevant share registrars. They will then need to complete the relevant forms for sale, or get the intended beneficiary to co-sign on any transfer forms.
This is a lengthy process at the best of times, regrettably. However, if the share certificates are unavailable, extra steps – and expenses – are required.
Firstly the executors need to let the registrars know. They will then need to buy a countersigned indemnity to protect the registrars for the lost shares. This takes time, and additional administrative expense. Then, replacement certificates need to be issued in the names of the personal representatives. This too, unsurprisingly, takes time and costs money.
Then, the executors need to write back to the registrars with the new certificates and all the forms for transfer or sale, including their Grant, identification for themselves and/or any transferee, and any other required documentation.
It is not a glamorous or swift process. Our best advice: ask your registrars now whether you can do away with certificated ownership, or alternatively, double-check you have a certificate for each and every share you own, and keep them safe and available for your executors for when the time comes.
You will be sparing your loved ones a great deal of wasted time and effort if you do.