-- Navigating a deceased loved one's stock portfolio can be overwhelming, especially without clear instructions. Probate Attorney Robert Brumfield advises that understanding the legal, financial, and tax implications is essential to avoid unnecessary complications.
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In a recent interview, Brumfield of the Law Offices of Robert H. Brumfield, P.C., outlined some of the common challenges executors and beneficiaries face when dealing with stocks and shares in an estate.
Brumfield explained that stocks are considered assets and must go through the probate process unless specific estate planning measures are in place. The estate’s executor is responsible for locating the stock portfolio, determining its value, and overseeing the transfer of ownership to beneficiaries.
"If a trust or will does not specify how stocks should be distributed, the executor must decide whether to liquidate the assets, distribute the proceeds, or transfer the stocks directly to beneficiaries," Brumfield said.
To ensure the best course of action—particularly if legal or beneficiary disputes arise—executors are encouraged to seek advice from a probate attorney.
"Ideally, a well-prepared estate plan will outline whether stocks should be retained, sold, or liquidated for beneficiaries," Brumfield emphasized.
In cases where a transfer-on-death (TOD) beneficiary has been designated, stock ownership will pass directly to that individual. However, if there is no TOD designation and the deceased did not leave a will or trust, the stocks will be subject to intestate succession laws, with a probate court deciding their distribution.
Brumfield noted that transferring stock is typically straightforward—once in the beneficiary’s account, they can choose to hold or sell the shares. Consulting a financial or tax professional is recommended to assess any potential tax liabilities before making decisions.
"Estate planning documents will determine how stock inheritance is handled. If inherited through a trust, full ownership transfers to the beneficiary. However, if stocks remain within the trust, a trustee will distribute them according to the trust's instructions," Brumfield explained.
If the estate plan directs the sale of stocks, the executor must comply. However, when multiple beneficiaries exist and no instructions are provided, the executor may opt to liquidate the stocks and distribute the proceeds accordingly.
Regardless of the circumstances, the executor has a fiduciary duty to act in the best interest of the beneficiaries and manage the estate’s assets responsibly. If no will exists, state intestacy laws dictate stock distribution among heirs.
Brumfield also highlighted the importance of understanding tax implications. Beneficiaries selling inherited stocks must pay capital gains taxes on any profits. To minimize tax liability, selling stocks soon after inheriting them can reduce exposure to capital gains tax, which can be as high as 30%.
Another strategy to minimize estate and capital gains taxes is using a revocable trust, which allows for a seamless transfer of stock assets while avoiding probate.
Brumfield also noted that disputes over stock distribution can arise if there are no clear instructions from the deceased. "Beneficiaries may challenge stock distribution if it contradicts the deceased’s wishes or is not in the best interest of all heirs. Likewise, an executor’s decision can be contested if it appears unfair or improper," he said.
"However, before pursuing legal action, beneficiaries should consult an experienced probate attorney to assess whether they have a viable claim," Brumfield concluded.
Source: http://RecommendedExperts.biz
Contact Info:
Name: Robert H Brumfield
Email: Send Email
Organization: Law Offices of Robert H. Brumfield, P.C.
Address: 1810 Westwind Drive, Suite 100, Bakersfield, CA 93301
Phone: 661-464-7770
Website: https://www.brumfieldlawgroup.com
Release ID: 89161944
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