Overseas grants of probate refer to legal documents issued by a court in one country to authorise the executor or personal representative of a deceased person’s estate to administer the assets that are located in another country.

When someone dies, their assets may be scattered across multiple jurisdictions. If the deceased held assets in a foreign country, such as a holiday home or other property, investments or bank accounts, the executor or administrator may need to obtain a grant of probate from the court in that jurisdiction to legally deal with those assets.

The process for obtaining overseas grants of probate can vary wildly depending on the laws and procedures of the specific countries involved. It often means submitting an application to the relevant court, providing documentation such as the death certificate and will and possibly fulfilling additional requirements such as appointing a local representative or providing security.

Distribution of assets

Once the overseas grant of probate is obtained, the executor can then proceed to manage and distribute the deceased person’s assets located in that country according to the terms of the will or the laws of intestacy if the person did not leave a valid will.

With regard to the liquidation, disposal and repatriation of a range of assets situated abroad, Finders International’s International Asset Service offers private clients, wills and probate practitioners and estate administrators advisory and helpful support.

Louise Levene, our international assets service manager, has sixteen years of expertise in asset recovery and probate assistance services, along with a practical, problem-solving methodology to restore value to the estate.

Foreign assets

Louise says: “These days, estates in the UK are probably going to have one, if not more, foreign assets. This can occur for a number of reasons, such as investment accounts created in the US or overseas for tax planning purposes, a vacation property bought in Spain, or a bank account opened overseas while an individual was employed there.

“We help estate administrators overcome the regulatory and legal roadblocks that can prove a major headache. We assist with the sale, transfer, or recovery of shares, bank accounts, investment portfolios, and other foreign assets through our international asset service.

“Shares are one such overseas asset that can prove problematic to transfer. In the event that a person has shares at the time of their passing, these will be included in their estate and must be sold or otherwise transferred as part of the estate administration procedure.”

Legal complications

In the UK, selling shares during the probate process is challenging because of the numerous legal and financial complexities involved. The legal procedure known as probate is used to distribute assets, such as stock in corporations, as part of the estate administration of a deceased person.

This is due to the need to comply with legal obligations, handle potential tax ramifications and make sure all the deceased’s assets are distributed fairly and transparently to the appropriate beneficiaries.

Determining the value of the shares held by the deceased is one of the first challenges. Determining the estate’s overall value and computing any inheritance tax obligations depend on accurate appraisal.

Fair market value

In order to determine the fair market value of the shares, this process may entail getting professional valuations or speaking with financial experts. It will take into account many elements such as market circumstances, company performance and industry trends.

The executor or administrator of the estate must provide proof of the required legal authorisation before selling the shares, even after the valuation has been determined. A Grant of Probate, a legal document confirming the executor’s right to manage the deceased’s estate, may be needed to accomplish this. In the absence of this Grant, there can be legal challenges to the share sale.

There may also be complications associated with the process of selling shares. Selling the deceased’s shares on the stock market is a simple alternative if they were owned by a publicly traded corporation.

Willing buyers for shares

Private firm shares, on the other hand, could require more difficult procedures, such locating a buyer who is willing or getting shareholder approval before selling. Pre-existing arrangements, such as stockholders’ agreements or limitations on share transfers, can provide additional levels of complexity.

The sale of shares during probate must take taxes into account. The ramifications of capital gains tax, particularly for appreciated assets, should be carefully considered. Income tax may also apply to any profits made from the shares throughout the probate period. To reduce the financial impact on the estate and its heirs, executors need to effectively manage these tax difficulties.

It may become clear when a shareholder passes away that the share portfolio has not been actively handled for years. The type of stock possessed may change as a result of a variety of corporate actions, including takeovers, mergers, reverse stock splits, listings, and delistings.

Co-owners and beneficiaries

Multiple stakeholders, such as share co-owners and beneficiaries, may additionally complicate the decision-making process.

One of the initial challenges is determining the value of the shares held by the deceased. Accurate valuation is crucial for establishing the estate’s overall worth and calculating any inheritance tax liabilities. This process may involve obtaining professional valuations or consulting financial experts to assess the fair market value of the shares, considering factors like market conditions, company performance, and industry trends.

Once the valuation is established, the executor or administrator of the estate must demonstrate the necessary legal authority to sell the shares. This may require obtaining a Grant of Probate, a legal document that confirms the executor’s authority to administer the deceased’s estate. Without this Grant, the sale of shares may encounter legal obstacles.

Selling shares

The method of selling shares can also present complexities. If the deceased owned shares in a publicly traded company, selling them on the stock market is a straightforward option. However, private company shares may involve more intricate processes, such as finding a willing buyer or obtaining shareholder approval for the sale. In some cases, pre-existing agreements, such as shareholders’ agreements or restrictions on share transfers, can add further layers of complexity.

Tax considerations are paramount when selling shares during probate. Capital gains tax implications, especially for appreciated assets, need careful evaluation. Additionally, any income generated from the shares during the probate period may be subject to income tax. Executors must navigate these tax complexities to minimise the financial impact on the estate and its beneficiaries.

On the death of the shareholder, it can become apparent that the portfolio of shares has not been actively managed for some years. All kinds of corporate action, from listings and de-listings to acquisition, mergers, stock splits, reverse stock splits and takeovers might change the nature of the stock owned.

The involvement of multiple stakeholders, including beneficiaries and co-owners of shares, can also complicate the decision-making process. Engaging a professional company like Finders International, with its dedicated team that specialises in selling UK and international shares, can offer invaluable assistance.