When a person dies, their estate includes their assets such as shares. What happens to these is usually decided by the will of the deceased. It can be more complicated where there is no will, and that scenario shall also be explained.
Where there’s a Will:
The will should appoint who the ‘executor’ is, who is responsible for paying the debts of the deceased and carrying out their wishes. They are granted this power via a grant of probate from the court.
Gifting Shares
The deceased’s will may have provided that the shares are to be passed on to a relative or a friend. This is known as a transfer to a beneficiary. The executor should contact the company and notify them of this transfer, as they may require evidence of a grant of probate.
The type of share may result in different requirements or processes. For example, an unlisted security requires the payment of stamp duty when transferring. It can be helpful to obtain legal advice to ensure everything is done correctly.
Selling Shares
If the shares are sold, the proceeds of the sale are again dealt with as per the will.
Where there is not a Will:
If the deceased has died intestate and there is no will, the Succession Act 2006 (NSW) applies and the rules of intestacy determine what happens to the estate of the deceased. However, an eligible person can apply for a Letter of Administration. The administrator has similar responsibilities as the executor, having to collect assets and pay debts.
The Succession Act will then determine what happens to the assets and who receives them. It provides that spouses or de facto partners are given first priority, and then children of the deceased coming next. Otherwise, relatives of the deceased can claim the assets.
If you are a relative or partner of someone who has died without a will, it is important to understand these rules. Our team at OpenLegal can help explain the rules of intestacy, or alternatively assist you in creating a valid will.
Phil is a director at OpenLegal. He has over 16 years experience working in private practice and in-house counsel in Sydney and London, giving him expertise in employment law, IP, finance, leases, dispute resolution, insurance and contracts.
