Shares in parents estate

Shares make up part of estate

three executors ( children )

beneficiaries 3 children + 7 grandchildren

is there a legal obligation for the executors to offer the benificiaries the option of taking the shares or the proceeds of the sale of shares ?
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Is there a legal obligation on the executors to provide a professional opinion about the benifit a of doing one or the other to the benificiaries ?


Cliff

 

Selling the shares in the estate might result in cgt payable by the estate.

the will may include an equalisation clause to allow for tax?

 

no.

no

 

no equalisation clause in will .

yes there will be CGT . Either now in estate or if beneficiaries sell later . CGT based on purchase price . Rate determined by estate or personal ( beneficiary rate )

Most of the grandkids are buying / have just bough properties or about to rebuild , so for most benificiaries a lump sum is preferable .

cliff

 

@Terry_w

is their a dummies guide or equivalent for executors ?

yes we will be getting professional advise

cliff

 

Don't think so

 

Trustee has a power of appropriation which might help

 

Get an accountant to work out the tax - hopefully you have the cost base history of the shares?

If you are talking about multiple holdings of shares being split 7 ways that could be fun ... better get those signing hands fit.

 

This is three years old and is a guide, I use that word with some caution, for beneficiaries of deceased estates. I wouldn't take it as gospel if you get my drift.

A Guide for Beneficiaries - Legal Practitioners' Liability Committee

I think some state governments do provide a checklist of sorts but only for the initial stages, eg cancel diver's licence.

Otherwise it's meet a lawyer when only a solicitor will do.

 

There could be a shareholders agreement, if the deceased was not the sole owner in private companies.

 

@Terry_w

do most estates sell shares or pass them on

cliff

 

I have no idea. It would depend on the circumstances. In some cases it would be more tax effective for the estate to sell and in other cases to pass them on and then the beneficiary sell.

 

If the CGT was/is large - would it not be preferable to take the shares - and if cash was required, either borrow against the shares as security, use dividends to pay interest on other loans, or time smaller capital sales. Why make the ATO a pseudo beneficiery if you don't need to!

 

It comes down to whether the beneficiaries want a capital injection or ongoing cash flow . Most of them have mortgages or are looking at getting one , so for them the cash is preferable. One who is interested in shares has already said if he wants more shares , he wants to choose which ones.

Cliff

 

Super tax equalisation clauses in wills — devil is in the detail