Estate with various shareholdings

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homer911

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I am Executor of an Estate with various shareholdings. I'm dealing with a number of beneficiaries who know that the Estate has various shareholdings. Some have expressed interest in receiving a transfer of shares while others would just like the cash. Some shares have gone up in value while some have lost value. The shares form part of the residue of the Estate.

It seems to me that the only equitable way to deal with the shares is to either sell them all and offset any losses against gains, pay any CGT owing and distribute the cash OR
transfer 1/x of each shareholding to each of x beneficiaries.

Some have expressed interest in selecting specific shares - this makes me very uncomfortable. Shareholdings are valued at date of death for CAT and they could make a paper gain at the expense of the other beneficiaries.

I appreciate as sole executor, the final decision is mine but beneficiaries are all family members..

Anyone out there been faced with this situation? How did you deal with it?
 
Not a legal, but I would think you should sell and they can then buy the shares themselves. If you are transferring, who pays for the fees, the stamp duty and the CGT incurred by the ESTATE? Too messy to transfer shares to the people.
 
As executor you do have decision making power - but not necessarily the final decision.

Giving people shares (or other estate assets) to satisfy their inheritance entitlements, in full or in part, is permissible and commonplace.

It is called an appropriation - and there are various rules to be met.

Notices must be served and objections can be made. Section 55 of the Succession Act gives further guidance.

CGT consequences can vary too.

If you are making appropriations, the date of death is not the correct valuation date. It should be at, or as close as practicable to, the date of actual distribution. There is a large body of case law on this.

Are you handling the administration yourself? If so, the best advice is to circulate to all beneficiaries a full copy of the proposed distribution scheme and make sure that they are all in agreement. In other words, rather than quoting the law chapter and verse, more a sort of "here is what I am going to do as soon as everybody signs off on it"

But, echoing Ravima, you might be as well off to sell the lot and tell them to just buy shares with their money, if that is what they want.
 
Gosh, that sounds complicated! I'll have to tell them its not possible unless all the beneficiaries agree (and I'm one, so they won't :))
 
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