While the world is coming to terms with the developing crisis and we have the realisation that life as we know it will be different for some time, we appreciate that it is very difficult for people to know what to try and deal with now and what to postpone until some normality resumes.
We have had a number of enquiries from those attending to estates with North American shares, who are understandably concerned about the state of the stock markets through this difficult time. There is a feeling of wanting to get matters finalised as soon as possible from some, while others would rather wait in the hope that the markets recover so that the assets recoup some of their depleted value.
In addition, some have been concerned that where they have already obtained medallion signature guarantee stamps, and are now holding on to these during this crisis, that the medallion stamp may expire while they wait. It is our understanding that as long as the medallioned form is not dated, there is no expiration of the stamp. Where a date has been requested and included, I know that I have seen estates where these have been accepted many months after the date on the forms when unforeseen delays have arisen.
To try and ease our clients concerns, Lester Aldridge would like to confirm that should your medallion stamp be rejected, purely due to you having held on to the papers for some time during the COVID-19 crisis, we will stamp a new form at no further expense to the estate as long as all signees remain the same.
As to whether you should delay in attending to administration during this time, this is of course completely up to you. You may have many other plates to keep spinning through this period which may take priority. If however, your only concern is with regard to the values at this time and you want to delay for that reason, it is important to consider the following points and options for the estate.
Should I hold off doing anything with US stocks in the estate during COVID-19?
If the value of all US shares held at the date of death was in excess of $60,000.00, the estate will need to obtain a federal tax certificate (Form 5173) from the IRS before they can attend to the shares. This process usually takes the IRS 6 – 9 months to finalise when they receive the applications. We do not yet know whether this processing time will be delayed during this crisis, but the application for clearance from the IRS is very separate to the sale or transfer of the shares and therefore we would recommend that estates do not delay on this part of the process if they are able to proceed with an application.
Should I sell estate shares during the COVID-19 crisis?
If the estate is concerned about plummeting share prices, there is always the option to just arrange a transfer at this time and sell the shares later. In most cases we find that as a medallion is provided as part of the death registration process, there is usually no requirement for a further stamp for the sale. If the shares are transferred, the estate can get everything in place ready to make a sale at a time when they are feeling more comfortable with the value, giving them more control over the process.
What will happen to US shares if I do not deal with them during COVID-19 crisis?
If the assets are left with no communications or cashing of dividend cheques, the assets will be at risk of the escheatment process. This does not mean that the assets are lost, but it does mean a different, and usually much longer, collection process. The escheatment process is guided by statutes in the US and at this time we are not sure if there is any plan to suspend this process during this period.
If you are concerned about what to do with a North American estate that you are attending to, please do get in touch and let our international solicitors talk you through the options to ease your concerns. You can contact us by calling 01202 786208 or by emailing firstname.lastname@example.org.