Deceased Securityholders

Introduction

Following the death of a person an individual or number of persons are appointed as the legal representative/s of the deceased and their estate, known as the executors, who act on behalf of the estate. If the deceased left no will the court appoints an administrator to act on behalf of the estate.

Probate is a certificate that validates the will of the deceased and is granted to the executor of the will to act on behalf of the estate.

In the absence of a will the court will appoint an administrator who is given "letters of administration" which grants the administrator legal power to act on behalf of the estate.

Notification of Death of Securityholder

The solicitor, executor or administrator of an estate will usually notify the registry, company or broking/non broking participant upon the death of a securityholder and request details of the deceased's holding, together with dividend details, and the requirements to enable the holding to be finalised.

Death of a Holder on the Issuer Subregister

This should be read in conjunction with each share registries procedures regarding deceased estates. Refer to the individual share registry website for further details.

The response for securityholders on the Issuer subregister should include the abovementioned details and requirements as set out in Form 8 "STANDARD LETTER - DECEASED HOLDER". The registry should record the death of a securityholder and the details of the executor/s, administrator/s if known. The title or salutation of the deceased should be changed to "ESTATE" or "EST" together with any change of address as requested. The registry computer system may also provide for the recording of a deceased holder indicator.

The response for deceased securityholders on the CHESS subregister is outlined in the section "Death of a holder on the CHESS Subregister".

Probate or Letters of Administration

Before permitting the transmission or transfer of any securities from a holding in the name of a deceased person, evidence should be sighted of the appointment of the legal representative/s authorised to administer the estate. This is achieved by sighting the Probate or Letters of Administration or, alternatively, a certified copy thereof.

Where the Probate or Letters of Administration have not been granted or resealed in the State or Territory in which the securities are registered , a Statement pursuant to Section 1071B of the Corporations Act is to be completed by the executor/s administering the estate, declaring that no probate will be taken out in that state or territory, nor any other probate resealed in that state or territory. This statement must be lodged within three months of being completed, together with the transfer or transmission request. A Section 1071B Statement is not required if the probate was issued outside Australia and has not been resealed in Australia.

In lieu of obtaining Probate/Letters of Administration you can refer to the following website for assistance www.austprobate.com.

Refer to : Form 5 "SECTION 1071B STATEMENT"

For requirements regarding Probates granted outside Australia or overseas, refer to the separate section dealing with overseas estates.

Transmission or Transfer

The transmission of securities is the removal of securities from the deceased's name into the name/s of the executor/s or administrator/s. If transmission of the securities is to be effected, a completed transmission application signed by the executor/s or administrator/s is required.

Securities may be transferred from the name of the deceased direct to the beneficiary/s or other persons by properly executed transfers without the prior need for a transmission to be effected into the executors/s name/s. The movement of securities from the deceased's name into the name of the executor who is also the beneficiary should be effected by way of a proper instrument of transfer and not by transmission. However, it is not the responsibility of the registry or issuer to investigate beyond the probate document to ascertain if this is the case or not.

It should be noted that the probate or letters of administration and any subsequent Section 1071B Statement, relate to the State or Territory register on which the securities are held, whereas, any stamp duty on transfers relate to the State or Territory in which the company was incorporated.

Note: From 1 July 2001 stamp duty is only applicable to Unlisted securities.

Refer to : Form 6 "TRANSMISSION APPLICATION"

For Unlisted securities only, off-market transfers from a deceased name must comply with Australian State or Territory stamp duty requirements. Transfer Form for Non-Market Transactions are used for this purpose and must be lodged for assessment and payment of any applicable stamp duty with the State or Territory Revenue Office in the State or Territory in which the company was incorporated.

Note: In the case of South Australian Grants of Probate the original Registrar's Certificate of Disclosure to the Supreme Court of South Australia in compliance with Section 121a of the Administration and Probate Act 1919 must be forwarded with the other required documents.

Separate transmission applications or transfers are required for each class of security.

For certificated holdings should the executors/s or administrator/s be unable to locate all of the securities certificates, a Certificate Replacement Request - Executor/s or Administrator/s should be signed by the executor/s or administrator/s.

Refer to : Form 10B "CERTIFICATE REPLACEMENT REQUEST- EXECUTOR/S OR ADMINISTRATOR/S"

Note: Where the securities are held on an issuer sponsored subregister and a CHESS message is sent transferring any of the securities direct from the deceased holder, the relevant probate requirements relating to the estate will be the responsibility of the broker acting for the executors in relation to the transfer/transmission of the securities. In these instances it is not necessary for registries to note probate etc as the ASTC Settlement Rules provide for an irrevocable right for a CHESS transfer and furthermore it is considered that there is recourse to the ASX's National Guarantee Fund in the event of any legal action.

Joint Holdings

The survivor/s of a joint holding of securities may deal with the holding upon production of proof of death of a joint holder. (e.g. death certificate or a certified copy thereof.) If all the joint holders are deceased, then only the executor/s or administrator/s of the last holder to die may deal with the holding. A written request or "REQUEST TO REGISTER SURVIVING HOLDER/S" form should be received from the survivor/s together with any relevant securities certificates, before transmission is effected into the name/s of the survivor/s. Transfers may be processed direct from the joint holding if the securities are to be sold or transferred.

Normal stamp duty requirement would apply to unlisted securities.

Refer to : Form 25 "REQUEST TO REGISTER SURVIVING HOLDER/S"

Any CHESS subregister holding with one deceased joint holder must be transferred to the surviving joint holder/s by the controlling CHESS participant creating a new holding for the surviving holder/s.

Subject to the agreement of the parties involved, the original controlling participant's sponsorship agreement remains in operation in respect of the surviving joint holder/s.

Share registries should ensure that as a result of such transfers any outstanding company matters are attended to.

Death of holder on the CHESS Subregister

(To be read in conjunction with the CHESS Procedure Guidelines)

In the event of a death of a holder on the CHESS subregister all the normal registry procedures relating to deceased estates will be handled by the controlling participant including:

  • Confirmation of the holding(s) as at the date of death;
  • Requirements prior to dealing with the estate - Refer to : Form 8 ("STANDARD LETTER - DECEASED HOLDER");
  • Transmission of the securities to the executors (off-market)
  • Transfer of the shares to the beneficiary or some other persons (off-market)
  • Sale of the securities on-market.

Upon receipt of written notification of the death of the security holder which usually consists of a letter from a solicitor on the solicitors letterhead or a certified copy of the death certificate, the participant has 24 hours to amend the salutation to EST, amend the address details where necessary and apply a Holder Record Lock.

The CHESS Holder Record Lock is a requirement of the CHESS procedure guidelines and is initiated by an electronic message to CHESS and all relevant registries and remains in place until such time as probate is granted. The lock:

  • Prevents transfers or conversions of the deceased shareholdings
  • Prevents acceptance and withdrawal of buyback or off market takeover bids
  • Prevents change of controlling participant
  • Allows participant transfers or conversions into the holding, and
  • Allows registry or bidder initiated movements

The controlling participant (unless requested to convert the securities to an issuer sponsored subregister) will, when satisfied that the notification of death is in order, send a CHESS message to the registries for all securities held by the holder to:

  • Delete the former title or salutation and insert "ESTATE" or "EST" before the holder's first given name to indicate the deceased status;
  • Change the address of the holder to care of the solicitors or other person(s) acting for the estate; and
  • Apply a holder record lock

Once probate has been granted and a certified copy received the participant can request a "Request to Release a (Death) Holders Record Lock" form and initiates an electronic message to CHESS to release the record lock. Once the holding has been unlocked the participant can transfer the holdings into the names of the beneficiaries as per the deceased's will. The original sponsorship agreement will continue to operate for up to 3 months following the release of the Holder Record Lock upon which the securityholder's HIIN must be cancelled.

If there is any doubt as to the bona fides of the person notifying death, the controlling participant should request a full copy of the death certificate (or a certified copy) before taking any further action.

Should the notification of death be forwarded directly to the registry in error, the notification should be on-forwarded to the controlling participant under cover of a letter or returned to the sender for forwarding to the controlling participant. If on-forwarded to the controlling participant, a copy of the covering letter should be forwarded to the sender for information.

Refer to : Form 14 "DOCUMENT FORWARDING"

For joint holders on the CHESS subregister the sponsorship agreement between the holders and participant is not terminted upon the death of one shareholder. Upon receipt of appropriate documentation of death the participant creates a new HIN for the surviving securityholder and transfers all holdings to the new HIN. Once all holdings have been transferred the joint HIN is cancelled.

Whilst the registry does not receive any official notification of the death of a CHESS securityholder the change of registration details to EST and the application of the holder record lock should alert the company register of any outstanding matters such as unpresented cheques or the return of other company communications. It may be necessary for registries to amend any holdings that may have been flagged.

The change to the registration details should alert the company register of any outstanding matters such as unpresented cheques or the return of other company communications. It may be necessary for registries to amend any holdings that may have been flagged.

All the normal registry procedures relating to deceased estates will be handled by the controlling participant including:

Note: Controlling participants may consider the necessity or otherwise for the executor/s or administrator/s to obtain a grant of probate for an estate which at date of death held a portfolio of investments with a combined value exceeding $15,000.

Refer to separate section on dispensing with the need for probate.

Enquiries relating to dividends paid will still need to be referred to the registry.

The solicitor or other person/s acting for the estate may request the controlling participant to convert the holding to the issuer sponsored subregister. Upon receipt of such written request, the controlling participant should cancel the sponsorship agreement, remove the holding from the CHESS subregister and forward the relevant notification to the issuer. This notification should be in the standard format and include copies of all correspondence, death certificate, etc. received by the controlling participant.

Refer to : Form 17 "NOTIFICATION OF CONVERSION TO AN ISSUER SPONSORED HOLDING FROM A CHESS SPONSORED HOLDING"

The electronic removal of the holding to an issuer sponsored subregister will include a specific CHESS indicator denoting a deceased person. This indicator will alert the registry that the new holding relates to a deceased estate. The subsequent security certificate or holding statement should be held by the registry pending receipt of the notice and other documentation from the controlling CHESS participant. Upon receipt of the notice in accordance with the ASTC Settlement Rules the registry should examine the documentation and take appropriate action.

This would normally include:

  • If not already amended by the controlling CHESS participant, record the holder as deceased and amend the address if applicable.
  • Prepare and dispatch with the security certificate or holding statement a suitable letter confirming details of the holding and the company's requirements for dealing with the securities, OR
  • Where the documentation is incomplete, the registry may require further information relating to the notification before proceeding

Dispensing with the Need for Probate

When it is not intended to apply for Probate or Letters of Administration because of the small value of the Australian assets of the estate, consideration should be given to waiving this requirement. This would only be considered when the market value of the securities is not more than A$15,000 as at the date of death or current market value whichever is greater.

Note: Controlling participants may consider the necessity or otherwise for the executor/s or administrator/s to obtain a grant of probate for an estate which at date of death held a portfolio of investments with a combined value exceeding $15,000.

The executor/s, or administrator/s or solicitors should be required to produce the following documents:

Securityholders with Australian Registered Addresses

  • Certified copy of the will
  • Certified copy of the death certificate
  • Small Estate Statement and Indemnity duly completed (refer - Form 7)
  • Transmission Application duly completed (refer - Form 6 )
  • Securities certificates (if a certificated holding)

Securityholders with Overseas Registered Addresses

  • Certified copy of the will
  • Certified copy of the death certificate
  • Small Estate Statement and Indemnity duly completed (refer - Form 7)
  • Transmission Application duly completed (refer - Form 6)
  • Securities certificates (if a certificated holding)

Overseas Estates

Recognition of foreign probates is subject to state laws (i.e. Administration and Probate Act 1958 Section 80-88 Victoria) which set out the countries from which foreign probates may be resealed. All other foreign probates require a grant in Australia covering the Australian assets. In general terms it is only "Commonwealth" countries that have been proclaimed but this is not conclusive.

Where the Overseas Probate has been resealed or obtained in a State or Territory of Australia which differs from the register on which the securities are held, a Section 1071B Statement is also required.

Refer to : Form 5 "SECTION 1071B STATEMENT"

Dispensing with the Resealing of an Overseas Probate

Consideration could be given to waiving the requirement for Proclaimed countries probates to be resealed in Australia, when the value of securities is not more than A$15,000 as at the date of death or current market value whichever is greater, provided the following documents are produced:

  • Certified copy of the probate (for UK Probates - an office copy bearing the seal of the court is acceptable.)
  • Small Estate Statement and Indemnity duly completed
  • Transmission Application, duly completed
  • Securities certificates (if a certificated holding)

Refer to :Form 6 "TRANSMISSION APPLICATION" and Form 7 "SMALL ESTATE STATEMENT AND INDEMNITY"

Any further waiver of these suggested requirements will increase the risk taken by the registry or company. Each request to handle an estate without probate should be considered separately, and if any doubt exists as to the authority of the person claiming to be the legal representative, Probate or Letters of Administration granted or resealed in Australia should be insisted upon regardless of the value of the securities.

Companies, registries and/or participants should ensure that they are adequately covered by professional indemnity and fraudulent transfer insurance, suitably endorsed, before permitting the registration of securities out of a deceased holding without sighting the Probate or Letters of Administration.

Small Estates

In some States, it is possible to obtain a grant of probate for small estates without the need for the usual full legal requirements.

For example: In Victoria estates under A$25,000 (or under $50,000 if spouse, children or widowed mother of the deceased), probate can be arranged direct with the Probate Office by engaging the assistance of Probate Office staff with costs of approx $400.00. Please check this with the Probate Office in case of changes in the law.

Deceased Estates - Intestacy

Where a securityholder dies without leaving a Will, different registry procedures are required for the administration of the holder's estate. Letters of Administration may be granted and if so the requirements will be the same as for probates. Should any company or registry agree to waive the requirement to sight Letters of Administration it is considered that the following items should be produced before transmission is effected:

  • Certified copy of the death certificate
  • Small Estate Statement and Indemnity duly completed
  • Intestate Statement and Indemnity duly completed
  • Transmission Application duly completed
  • Securities certificates (if a certificated holding)

Refer to: Form 6 "TRANSMISSION APPLICATION" and Form 7 "SMALL ESTATE STATEMENT AND INDEMNITY" and Form 11 "INTESTATE STATEMENT AND INDEMNITY"

It is recommended that although the need to sight Letters of Administration may be waived if the value of the securities in a company is not more than A$15,000, Letters of Administration should be obtained where the total value of the assets of the estate is greater than say A$50,000. It would therefore be necessary in this case for an inventory of assets to be obtained.

The Small Estate Statement and Indemnity form and Intestate Statement and Indemnity form would need to be completed by the deceased's next of kin. Verification of next of kin may be obtained from a certified copy of the full death certificate.

It may also be necessary to obtain waivers from any persons considered to be entitled but not making the application for administration of the estate. i.e. other direct family members of the deceased.

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