At first, an international shareholding may appear to be just another asset to value, transfer or sell. In practice, executors can find themselves dealing with foreign registrars, transfer agents, tax authorities and courts, each with their own requirements.

Knowing where the complications are likely to arise can help executors avoid unnecessary delays and identify when specialist support may be useful.

Establishing exactly what the estate owns

The first challenge is often identifying the asset itself.

Executors may have an old share certificate, dividend statement or piece of correspondence, but the company may have since changed its name, merged, been acquired or undergone a corporate action. Shares may also be held through a nominee or custodian rather than directly in the deceased’s name.

Before deciding how an asset should be dealt with, it may therefore be necessary to establish:

• whether the holding is still active;
• the current number and type of shares;
• where the shares are registered;
• whether there are outstanding dividends or other entitlements; and
• the value of the holding at the relevant date.

This becomes particularly important where information about the deceased’s investments is incomplete, or records have not been kept up to date.

A UK Grant may not be enough

Obtaining a Grant of Probate in England and Wales does not automatically mean that an executor has authority to deal with assets everywhere in the world.

The country in which an asset is situated may require the UK Grant to be formally recognised, resealed or supported by additional local documentation before the asset can be transferred or sold.

The reverse can also arise where someone who died overseas owned assets in the UK. Depending on the jurisdiction and circumstances, a foreign grant may need to be recognised or resealed before UK assets can be administered.

The correct process depends on the jurisdiction involved, so executors should establish the requirements before submitting documents or attempting a transaction.

US and Canadian shares can involve additional requirements

North American securities are a common source of difficulty for UK executors.

A US or Canadian transfer agent may require a Medallion Signature Guarantee before accepting instructions to transfer or sell securities. This is a specialised form of signature authentication used for certain securities transactions and differs from ordinary notarisation or witnessing.

Executors may also be asked for certified documents, identity evidence, inheritance documentation and forms specific to the transfer agent handling the shares.

Requirements can differ between institutions, so it is useful to confirm exactly what is needed before documents are prepared or sent overseas.

US estate tax requirements may also need to be considered

Where a non-US individual dies owning US-situated assets, executors may also need to consider US estate tax rules.

For US estate tax purposes, shares in corporations organised under US law are generally treated as US-situated property even where the investor lived overseas.

For an estate of a nonresident who was not a US citizen, a US federal estate tax return — Form 706-NA — may be required where the relevant US-situated assets and other amounts taken into account under the rules exceed the applicable filing threshold. The IRS currently states a general filing threshold of $60,000, although treaty provisions and the circumstances of the individual estate can affect the position.

In some cases, the documentation required to release or transfer US assets may go beyond standard probate paperwork.

Delays can create additional problems

International estate assets are particularly vulnerable to delay because several organisations may need to be involved in the same transaction.

Executors may need to coordinate with registrars, transfer agents, courts, tax authorities, banks, notaries and other professional advisers across different jurisdictions.

Long periods of inactivity can also create problems with certain overseas holdings. In the United States, for example, dormant financial assets can ultimately become subject to escheatment, under which unclaimed property is transferred into the custody of a state.

This does not necessarily mean that the asset is permanently lost, but recovering it later may introduce another administrative process.

Valuation is another important consideration

Executors need reliable information about the value of estate assets, and international investments can make this less straightforward.

The relevant value may need to reflect the position at the date of death rather than the current market value. Foreign currencies, historical prices, suspended securities, funds and less frequently traded investments can all require additional research.

For US estate tax purposes, the IRS also uses fair market value at the date of death when determining the value of US-situated assets.

Accurate information at an early stage can help executors complete the estate accounts and determine what needs to happen next with the asset.

When is specialist help useful?

Not every overseas investment requires specialist intervention. However, additional support may be worthwhile where:

• shares are registered outside the UK;
• the registrar or transfer agent will not accept the existing Grant;
• a Grant needs to be recognised or resealed overseas;
• a Medallion Signature Guarantee is required;
• the estate contains US securities and Form 706-NA requirements may apply;
• share certificates or investment records are missing;
• dividends or other entitlements remain unclaimed;
• assets may have been transferred to an unclaimed-property authority; or
• several organisations or jurisdictions need to be coordinated to complete the transaction.

Getting the process right at the beginning can prevent executors from repeatedly submitting documents, obtaining unnecessary certifications or discovering additional requirements late in the administration.

A coordinated approach to overseas assets

Share Data supports executors, solicitors and other professional advisers with the practical administration of UK and international shareholdings.

This can include identifying and valuing securities, dealing with overseas registrars and transfer agents, arranging Medallion Signature Guarantees, supporting Form 706-NA applications, coordinating probate resealing, recovering unclaimed assets and completing the eventual transfer or sale of shares.

Share Data is also working with ProbateHelp to help executors access practical probate guidance alongside specialist overseas-asset support. ProbateHelp provides free guidance, while its optional EstateManager service helps executors organise tasks, documents and financial records, track progress and share selected updates with authorised people.

For a broader overview of the issues executors may encounter when an estate includes assets outside the UK, download Share Data’s Navigating Overseas Assets guide.