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In the
past couple of weeks, I have had to deal with a
surprising number of people who found themselves in one
of two situations.
The
first group is composed of individuals who had lost
their stock certificates, while the second group had
certificates that were in the names of people who had
passed away.
For both
groups, the main concern was the same—“How can they sell
their shares?” It is to answer that question that I will
dedicate the bulk of this column.
For the
first group, the process is pretty straightforward. If
you still have an account statement or the original
buying confirmation from the broker through which you
bought the shares, you can contact that broker and have
them facilitate the issuance of the new certificate.
If you
don’t have a broker, then the process becomes a bit more
complex. For one thing, you will have to determine who
the Transfer Office is that handles the certificates of
the company you bought shares in. The best place to
start here will either be with the listed company itself
or with the PSE.
Next,
you will have to contact the Transfer Office to check
which certificates are still outstanding in your name.
Of course, the Transfer Office will only issue such
information once you have proven to them that you are
who you say you are. (To put it in another way: Make
sure you personally visit the Transfer Office and bring
lots of identification—like passport, driver’s license,
SSS, GSIS etc.)
The next
step will then be to execute an affidavit of loss for
the missing certificates and have it published in
several newspapers. Now, assuming that no one else comes
forward to contest your ownership of the shares, a new
certificate should be issued to you in about a month or
so.
The
process becomes much more complex and expensive for
people who are looking to sell shares that belong to
friends or relatives that have passed away. To begin
with, you will first have to prove that the proper
estate taxes have been paid for the shares you are
looking to sell. This means having to go to the BIR and
getting a certification that all taxes on those shares
have been paid and that the deceased person’s estate is
free to liquidate the share.
Of
course, if the original owner died years ago, there will
be significant tax penalties that will be assessed on
the shares. Next, after you have satisfied the BIR’s
requirements, you will then have to go through the
process of lodging the shares with a broker so that they
can be sold.
The
problem here now lies in the fact that your broker may
ask you for legal documents from the deceased person’s
estate authorizing you to be the one to actually sell
the shares. Furthermore, the broker may ask you also for
written instructions as to whose name the check for the
selling proceeds will be issued to.
Said
documents may be difficult to obtain, especially if the
disposition of the estate’s assets is being contested by
one or more heirs. Consequently, the best action a
person can do in this case is to hire a lawyer who
specializes in estate taxation and settlement—and those
people do not come cheap.
Of
course, if you want to avoid all of the above problems
then all you have to do are two things. First, open an
account with any licensed broker of the PSE. Next, lodge
all of your certificates with that broker and keep the
receipts in a safe place.
Once the
broker has informed you that the certificates have been
cleared (a process that can take up to two weeks), then
you can immediately sell the shares from that point on.
This
ability to sell at a moment’s notice becomes very
critical for people of advanced age as they may be
unable to take care of lodging the shares themselves
when they get sick or hospitalized. Put it another way,
if they need money for medical expenses and only begin
the lodging process when things look bad, the amount of
time it takes to actually clear the certificates may
make it impossible for the shares to be sold on time.
Sounds
morbid? Yes. But the plain and simple fact is that,
legally speaking, once the person passes away, no broker
will be able to sell those shares without all of the
clearances and documents I discussed above.
Consequently, if you want to be able to easily sell your
holdings and if you want to spare your heirs the
difficulties of having to obtain clearances and other
documents from the government, make sure that all of
your certificates are lodged with a broker.
Malaya A. Laraya is a registered financial planner and a
member of RFPI. Along with preparing financial plans for
clients, he is also very active in conducting seminars
aimed at educating college students about personal
financial planning. Comments and questions can be sent
to laraya910@yahoo.com.
Join the 7th RFP Program (July 7-August 25, 2007). Visit
www.rfp-philippines.com or inquire at info@rfp-philippines.com
/ Tel. No. 6342204. |
