# Navigating deceased estate shares



## borkborkbork (31 January 2013)

Hi,

Have been googling my way through but have stopped to ask help as I have found forums very helpful regarding other topics.

So just want to confirm some things. 

Relative who is deceased, I am the sole beneficiary and executor.
Found out most shares are with Link MS, which I learnt in the other thread they are Australias 2nd largest registry.
Was getting ready to fill out the off market transfer forms etc, but then found that the major share holdings actually have the X prefix, meaning that it is a CHESS sponsored holding, meaning I can't off-market transfer with a form but rather I have to go through a broker.

Are there any brokers that have a special fee regarding deceased estate transfer of shares or is it inevitable that I will have to pay a percentage broking fee on the transfer to my name?

I know off market transfers which are non CHESS don't have a % broking fee, just a small flat fee.

I did try the search function with the term "deceased" but nothing comprehensive was addressing my issues.

Thanks!


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## DocK (31 January 2013)

I was in the same position a few years ago, and from memory is was a simple enough process to convert the shares from Chess sponsored to Issuer Sponsored - you need to find out which broker is the current Chess sponsor and find out their requirements.  Again, from memory, they will require certified copies of the death certificate, will and probate if applicable (JPs in shopping centres can do this if you have the originals).  I do recall having difficulties with my late father's broker as to whether probate was required, he maintained it was based on the value of the estate, whereas my investigations showed it was based on the value of the share portfolio (I won ), but that was several years ago.  

Once you have had the shareholdings converted to Issuer Sponsored you can proceed with Link to satisfy their requirements (much the same re production of certified docs) to do off-market transfers.   Just bear in mind that while you are going through this process, which can be quite lengthy depending upon which broker currently sponsors the shares, that their value will continue to fluctuate - sometimes it's better to pay the higher cost and stay with the Chess sponsorship than watch values fall while stuck in paperwork land.  

Most online brokers have a special service for one-off transfers for deceased estates, but the fees are higher than the process I've outlined above.  Naturally, your decision will also be influenced by whether you intend to keep the shares or sell them.  I'd recommend giving the current broker a call - they should be able to give you all the info you need.


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## borkborkbork (31 January 2013)

Thanks for the info.



"sometimes it's better to pay the higher cost and stay with the Chess sponsorship than watch values fall while stuck in paperwork land. "

Why do you say that? - is it only in the instance that I wish to sell the shares before they supposedly drop in value? 

I plan to keep the shares, not sell, just need the transfer into my name. I don't think share price fluctuation is a factor in my situation?

I believe I would save money if I have the CHESS sponsored shares converted to issuer sponsored as I don't have to pay a comission.

Is there any benefit to keeping the shares as X CHESS sponsored?

Thanks


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## DocK (31 January 2013)

borkborkbork said:


> Thanks for the info.
> 
> 
> 
> ...




If you wish to keep the shares then the length of time the transfer process takes will not be an issue.  In my case, I was stuck waiting for my brother to make a decision re sell or keep in the middle of the GFC, while watching my inheritance drop in value daily, so the time factor played a part for me.  I'm certainly not making any predictions as to which way the market, or your inherited shares, will go in the near future, but if you're going to keep them anyway it's not really an issue.

There's a lot of info on the ASX website re the benefits of Chess Sponsorship and how it works.  Here's a couple of links:

http://www.asx.com.au/products/chess-benefits-issuer-sponsorship.htm
http://www.asx.com.au/products/chess_faq.htm


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## borkborkbork (31 January 2013)

Thanks for the info.

From reading it seems that it does not matter whether my eventual shares are CHESS or Issuer Sponsored.

The only real benefit is that if the shares are CHESS sponsored then they are able to be traded faster, i.e. as soon as you inform your broker you want to sell.

If you keep them as issuer sponsored and want to sell you have to fill forms and wait. There also seems to be a higher comission fee  when selling issuer sponsored shares, i.e. in the one off sale fashion.

I guess I need to work out how much the fee is to convert the CHESS into issuer sponsored, and then back into CHESS at a later date when they are in my name.

I know the majority of my shares are in companies that have link market services as the register but how do I find out my relatives CHESS broker?

Thanks


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## tinhat (31 January 2013)

DocK said:


> If you wish to keep the shares then the length of time the transfer process takes will not be an issue.  In my case, I was stuck waiting for my brother to make a decision re sell or keep in the middle of the GFC, while watching my inheritance drop in value daily, so the time factor played a part for me.  I'm certainly not making any predictions as to which way the market, or your inherited shares, will go in the near future, but if you're going to keep them anyway it's not really an issue.
> 
> There's a lot of info on the ASX website re the benefits of Chess Sponsorship and how it works.  Here's a couple of links:
> 
> ...




I'm sorry to hear that. I was in the same boat and due to my relative lack of experience, we are still recovering. Frankly I wish we had never informed NAB that my father was dead as I actually had access to his NAB trading account for a brief moment (we found his login info). Against the terms of the broker though it might have been, I could have sold everything but alas once the bank were informed of his death that window closed and we had to go through the painful process of death certificates, wills, paperwork and getting the shares transferred.


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## DocK (31 January 2013)

tinhat said:


> I'm sorry to hear that. I was in the same boat and due to my relative lack of experience, we are still recovering. Frankly I wish we had never informed NAB that my father was dead as I actually had access to his NAB trading account for a brief moment (we found his login info). Against the terms of the broker though it might have been, I could have sold everything but alas once the bank were informed of his death that window closed and we had to go through the painful process of death certificates, wills, paperwork and getting the shares transferred.




I hear ya!  Sometimes doing the right thing can cost!  Especially when a broker will do all in his power to keep his commissions and makes it as difficult as possible to  remove his Chess sponsorship!  

Bork - have you given Link a call?  That would be the obvious first step - otherwise I guess you might just have to trawl through your relative's paperwork if that's possible, and look for Chess statements, broker statements and the like.


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## borkborkbork (31 January 2013)

I have a feeling that the broker of the relative is a broker with a higher % transfer fee regarding deceased estates.

Is it possible to get set up with another broker, with a better % transfer rate, and have them administer/transfer the shares or am I stuck with the deceased's broker?


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## DocK (31 January 2013)

borkborkbork said:


> I have a feeling that the broker of the relative is a broker with a higher % transfer fee regarding deceased estates.
> 
> Is it possible to get set up with another broker, with a better % transfer rate, and have them administer/transfer the shares or am I stuck with the deceased's broker?




OK, I don't wish to appear rude, but have you made a phone call yet?  The best person to ask this question of would be the cheaper broker you wish to use.  Online brokers generally will look after the transfer of existing chess sponsored shares to their own sponsorship, but I don't know whether this can be done for a deceased estate - best you establish this directly for yourself I think.


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## borkborkbork (31 January 2013)

DocK said:


> OK, I don't wish to appear rude, but have you made a phone call yet?  The best person to ask this question of would be the cheaper broker you wish to use.  Online brokers generally will look after the transfer of existing chess sponsored shares to their own sponsorship, but I don't know whether this can be done for a deceased estate - best you establish this directly for yourself I think.




No problem, not rude at all. Thanks for your help so far.

I actually have rung up the CHESS helpline, link, and 3 brokers regarding my questions. Haven't got that far with them really.

I am wondering, do the transfer of shares into the beneficiary's name (mine), incur a % based fee like in a trade? Or is the so called "deceased estate" fee kick in when you try and sell the shares without really transferring into a name.

It's weird that Commsec lists deceased estate fee of 0.54%, and others list is as approx 0.1%, and etrade says all trades are 0.11%. Bit of a difference there.


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## Sir Osisofliver (1 February 2013)

Hi Bork,

There's a bit of paperwork involved in a Deceased estate, that's why you pay the fee after all.  How much are we talking about, a little inheritance or a big one?

If it's small - (I can't remember the figure off the top of my head speak to an accountant or tax lawyer) - you have the option of selling the shares as part of the estate. The advantage to this is that the estate will then pick up the profit/loss of anything you sell and you simply receive the cash.

If it's a big inheritance.... you may wish to speak to a good financial adviser about setting the shares into a trust or company structure. This is something that can be expensive later on down the track if you decide to do this exercise. Advantages are that you get some asset protection and the ability to do tax minimization.

The trust will need to be set up before the transfer of scrip (shares).

Some organisations will charge a flat fee, others a %. It depends on the market participant.  You are not stuck with the deceased broker.  However, when you tell the deceased broker that the party is deceased, they are obligated under their security protocols to "lock' the HIN, meaning no transactions can occur.  This however does not stop a Broker to Broker transfer of the HIN itself, (which isn't free either).

Either way if it's decent sized, I'd suggest talking to a profesional in this area.

Cheers

Sir O


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## borkborkbork (3 February 2013)

Thanks for the info! Is this fee they talk about, the % fee, is that the cost to transfer the shares from the relative to my name or is it a supposed fee based on a trade I.e. If I sell to the market?  I know that non chess shares all I need to do is perform a flat fee off market transfer via the standard transfer form.

In regards to the shares in a trust company thingo, do normal investors do this? I mean without the concept of inheriting. With those benefits you outline, why wouldn't all do so?


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## Sir Osisofliver (5 February 2013)

borkborkbork said:


> Thanks for the info! Is this fee they talk about, the % fee, is that the cost to transfer the shares from the relative to my name or is it a supposed fee based on a trade I.e. If I sell to the market?  I know that non chess shares all I need to do is perform a flat fee off market transfer via the standard transfer form.




No the fee is associated with processing the Off Market Transfer form.  As a broker they are a market participant, which means they have the ability to transfer scrip from one HIN to another HIN, or from one HIN to an SRN (issuer sponsored). What you are paying for is for someone to process the transaction with CHESS, rather than have CHESS do it. 







> In regards to the shares in a trust company thingo, do normal investors do this? I mean without the concept of inheriting. With those benefits you outline, why wouldn't all do so?




Because it's not without cost. Setting up a trust will cost you money to do so. A trust or company will also have ongoing audit requirements, meaning an accountant fee for doing so.  This is why I asked if a large or small inheritance, because a large inheritance, those fees are small in comparison to the earnings inside the trust. If it's only a small inheritance, the costs associated with set-up and ongoing audit will likely drown the dividend return.  As an estimate, *(DYOR)* less than about 100K is not worth it IMO.

Cheers

Sir O


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## Andrew Newman (27 February 2013)

Sir Osisofliver said:


> ...you may wish to speak to a good financial adviser about setting the shares into a trust or company structure...




You may ask what is a good financial adviser? 

I believe a good financial adviser is honest, provides value for money and conflict free advice. 

For conflict free advice, your financial adviser should satisfy the following 3 criteria:

1. They don't have ownership links or affiliations with any product manufacturers. (I have read that about 80% of the financial planners in Australia are affiliated with a product manufacturer) 

2. They don't receive commissions or incentive payments from investment products. (can be rebated)

3. They don't charge a percentage of your assets. (this is really a commission disguised as a fee)

Kind Regards

Andrew Newman


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## Julia (27 February 2013)

Where would we perhaps find such a person, Andrew?


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## Andrew Newman (27 February 2013)

Hi Julia

I am financial adviser and my business satisfies all 3 of the criteria I mention, allowing me to provide conflict free advice to my clients. 

Kind Regards

Andrew Newman


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## Julia (27 February 2013)

Andrew Newman said:


> Hi Julia
> 
> I am financial adviser and my business satisfies all 3 of the criteria I mention, allowing me to provide conflict free advice to my clients.
> 
> ...



Thank you, Andrew.  As I thought.


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## Andrew Newman (27 February 2013)

What do you mean as I thought?


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## Julia (27 February 2013)

Andrew Newman said:


> What do you mean as I thought?



Nothing more or less than I said, Andrew.
I deduced from your earlier post that you were a financial adviser.  You have confirmed this.


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## Andrew Newman (28 February 2013)

Hi Julia.

Perhaps I am beating my own drum a little. However, I am very passionate about providing conflict free financial advice.

Kind Regards

Andrew Newman


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