Deceased estate question

[smithie]

Hi,
My Mum died last year in March and left a considerable shares portfolio. We have set up a TFN so the shares are in her name (like an Estate of). My sister and I are both the executors. She wishes to keep the shares open in my Mum’s name for now to allow them to grow, I would like to sell/withdraw them within the estate rather than transfer them to my name as the CGT rate will be lower.
Has anyone had experience in splitting the units and selling half of each shares account off? Thanks

 

[noirua]

Hi,
My Mum died last year in March and left a considerable shares portfolio. We have set up a TFN so the shares are in her name (like an Estate of). My sister and I are both the executors. She wishes to keep the shares open in my Mum’s name for now to allow them to grow, I would like to sell/withdraw them within the estate rather than transfer them to my name as the CGT rate will be lower.
Has anyone had experience in splitting the units and selling half of each shares account off? Thanks

I've been outside of Australia for about 30 years now. However, I did get involved with two estates in 1998 and 2005 - so there may be some changes in laws since then. This website does show the way to go though it does depend whether there is enough value in the shareholdings.

How To Sell or Transfer Shares for a Deceased Estate

Estate administration can be a complex and overwhelming process but dealing with shares owned by the deceased doesn’t need to be.

www.sellmyshares.com.au

In cases where shares were acquired before September 20th 1985, there is no capital gains tax on the sale amount. For shares acquired after that date the shares sold by the estate will be handled as part of the estate’s taxation finalisation and will be subject to capital gains tax.

If shares are transferred to beneficiaries of a deceased estate capital gains tax doesn’t apply until a point in time when the shares are sold. Where those shares were acquired after September 20th 1985, the cost base will carry over from the estate’s original purchase cost.

In scenarios where the shares were acquired by the estate prior to September 20th 1985, the cost base resets to the share price on the day the deceased died.

 

[smithie]

Thankyou. None of the shares were purchased before 1985. I guess I’m wondering if anyone has had experience and was able to withdraw 50% of the units for each security, or have to close the entire fund off. I’ve found some companies will and some won’t.

 

[noirua]

The main thing is not to fall out over a will. The worse situations in families occur in this situation. I decided on both occasions to just cave in with my own ideas and let the other executor in Australia get on with it. In the end I congratulated the other executor on the work he did and said I agreed with everything in the end - not true of course.

 

[qldfrog]

The main thing is not to fall out over a will. The worse situations in families occur in this situation. I decided on both occasions to just cave in with my own ideas and let the other executor in Australia get on with it. In the end I congratulated the other executor on the work he did and said I agreed with everything in the end - not true of course.

Which sadly means how much $ do i value a relationship...
Do i let something silly and expensive happen to keep smooth peaceful relations.a near universal issue
I dread that time.
Do for your best,not easy.sorry can not help on your specific issue but hey sell all and do what you want with your share seems quite a reasonable way out

 

[KevinBB]

Hi,
My Mum died last year in March and left a considerable shares portfolio. We have set up a TFN so the shares are in her name (like an Estate of). My sister and I are both the executors. She wishes to keep the shares open in my Mum’s name for now to allow them to grow, I would like to sell/withdraw them within the estate rather than transfer them to my name as the CGT rate will be lower.
Has anyone had experience in splitting the units and selling half of each shares account off? Thanks

Hello

In addition to the information @noirua has given ...

Have you spoken to your accountant about this, as there are considerable tax benefits if the estate is kept intact for 3 tax periods (not years, but periods) after the date of death. I am thinking "yes" because you have been through the process of setting up an Estate Trust.

If the date of death was March 2021, then the three tax periods are tax years ending June 2021, 2022 and 2023. After June 2023 the tax benefits of keeping the estate intact are greatly reduced, so there is more of an incentive to distribute the estate to the beneficiaries.

So, I suppose I'm getting at: If you haven't spoken to your accountant, then it is time to do so.

KH

 

[Garpal Gumnut]

After taking appropriate taxation advice as mentioned above it is often best to just sell the lot, divi the money and buy your own shares.

gg

 

[smithie]

Thankyou, yes we have spoken to our accountant and she told us about the 3 tax years. Does anyone think it’s a good time to withdraw my half of the shares now, are they predicted to crash and I wonder by June 2023 when my sister (the other executor) will definitely sell them it will have recovered? Very hard to say of course but any advice is appreciated.

 

[smithie]

After taking appropriate taxation advice as mentioned above it is often best to just sell the lot, divi the money and buy your own shares.

gg

Are there predictions of a stock market crash soon? I was thinking of selling my lot and putting them in property rather than more shares.

 

[Garpal Gumnut]

Are there predictions of a stock market crash soon? I was thinking of selling my lot and putting them in property rather than more shares.

@smithie

Stock forums forbid giving financial advice.

If I knew where the markets are going I wouldn't be posting on ASF or any other forum. .

Just sell the bloody shares and buy some more simultaneously in your own name if you fancy those shares.

If you cannot make up your mind I can sell you a good ouija board for $999.99, in cash only. I have a cent I can give you if you have a grand.

gg

 

[Belli]

Get thee to a solicitor. Deceased estates can be difficult and have traps. Not usually but it can happen. It may depend on how the Will has been drafted 50/50 or proportional, establishing a Testamentary Trust, etc.

An accountant is not permitted to provide financial advice by the way or indeed taxation advice unless they are a registered tax agent.

 

[macca]

I would assume if you wanted to sell a portion of a holding then you could do so, I don't see why you cannot sell your portion of each or any share whenever you want to.

As you know, you need to weigh up the legal aspects and accounting details of each transaction before deciding on an action.

Naturally, you would have to adjust your entitlements in the estate so that your sister is treated fairly.

One of the attractions of shares rather than real estate is that you can sell a portion of your holdings, it is a bit hard to sell a bedroom if you need funds.

Practice some hypotheticals with your advisors and see if you like the outcome.

It has been mentioned in the Media of late, that there may be an interest rate rise in the coming year, if that actually happens then the sharemarket may fall.

The big But is that until things actually happen noone knows and your guess is as good as ours.

We cannot give advice and we would not because your personal situation is known only to you.

 

[Garpal Gumnut]

I would assume if you wanted to sell a portion of a holding then you could do so, I don't see why you cannot sell your portion of each or any share whenever you want to.

As you know, you need to weigh up the legal aspects and accounting details of each transaction before deciding on an action.

Naturally, you would have to adjust your entitlements in the estate so that your sister is treated fairly.

One of the attractions of shares rather than real estate is that you can sell a portion of your holdings, it is a bit hard to sell a bedroom if you need funds.

Practice some hypotheticals with your advisors and see if you like the outcome.

It has been mentioned in the Media of late, that there may be an interest rate rise in the coming year, if that actually happens then the sharemarket may fall.

The big But is that until things actually happen noone knows and your guess is as good as ours.

We cannot give advice and we would not because your personal situation is known only to you.

It would be a solicitor's picnic with an accountant invited over for the best brandy afterwards.

The best and cheapest option no matter how much the will is worth, containing shares, is to sell and buy again should you wish to have a similar portfolio to the deceased.

I should qualify that. If the will contains 100's of millions of $ worth of shares there may be some value, but the usual $50k to $2m estate containing shares it just isn't worth the bother from folk I've spoken to who have been in the unfortunate position of inheriting small estates.

gg

 

[smithie]

I would assume if you wanted to sell a portion of a holding then you could do so, I don't see why you cannot sell your portion of each or any share whenever you want to.

As you know, you need to weigh up the legal aspects and accounting details of each transaction before deciding on an action.

Naturally, you would have to adjust your entitlements in the estate so that your sister is treated fairly.

One of the attractions of shares rather than real estate is that you can sell a portion of your holdings, it is a bit hard to sell a bedroom if you need funds.

Practice some hypotheticals with your advisors and see if you like the outcome.

It has been mentioned in the Media of late, that there may be an interest rate rise in the coming year, if that actually happens then the sharemarket may fall.

The big But is that until things actually happen noone knows and your guess is as good as ours.

We cannot give advice and we would not because your personal situation is known only to you.

Thankyou for your message. For some reason, Perpetual managed fund is saying that they cannot do partial sales on deceased estates (I have to close the entire fund) but the others have said it’s no problem doing partial sale.

 

[Belli]

First, none here know how the Will is actually drafted and what instructions it contains. So any advice on "do this or do that" is simply blind and probably best ignored.

Second, once your Mum passed away she no longer owns the assets. It goes to that amorphous thing call Deceased Estate.

Third, it is incumbent on the executors to act in accordance with the instructions in the Will - doesn't matter one whit whether the executors are also beneficiaries.

Four, the Will is the rule book.

Five, if the executors are having difficulties in deciding what a particular beneficiary can or cannot do, you are now in legal territory.

Six, if an asset of the Deceased Estate has restrictions on it, you are again highly likely moving into legal territory.

 

[lindsayf]

Depending on the will and the age of the beneficiaries - it can be worth considering transferring the shares across to the beneficiaries. Then if you are eyeballing retirement (and reduced income) it may work tax wise to sell down the holdings at that time. In the mean time just bank the divs.
But I tend to agree, dont risk the sibling relationship over this stuff..that is a terrible legacy to live with.

 

[dyna]

Are there predictions of a stock market crash soon? I was thinking of selling my lot and putting them in property rather than more shares.

As a life- long property lover ( like most Aussies ) I'm now more wary of real estate crashes than the normal ups and downs of the sharemarket. Those "crashes'" that the media gets so excited about, tend to blow over, fairly quickly anyway.
I'm of the view these days, that there's far more risk for myself with a big exposure to real estate, than any other market.

 

[smithie]

As executors, we have done a ‘transmission of shares’ for some of the holdings. Does this mean the shares are still under the deceased estate’s name?

 

[Belli]

First, to whom were the shares transferred to?

Second, this is some legislation background in the Corporations Act which governs the requirements upon the company in which the shares are held.

CORPORATIONS ACT 2001 - SECT 1072A Transmission of shares on death (replaceable rule--see section 135)

www5.austlii.edu.au

 

[smithie]

First, to whom were the shares transferred to?

Second, this is some legislation background in the Corporations Act which governs the requirements upon the company in which the shares are held.

CORPORATIONS ACT 2001 - SECT 1072A Transmission of shares on death (replaceable rule--see section 135)

www5.austlii.edu.au

Thankyou for the info, that’s very helpful. The shares have been ‘transmitted’ to my sister and I as executors.