Do you have a Computershare account? Maybe it’s time to consider shutting it down or updating it – Muddy River News
Do you have a Computershare account? Good estate planning advice might be to close the account or at least determine if it needs to be updated.
Computershare is a very large Australian stock transfer company, providing global services as transfer agent and stock holder. It also provides many other financial services.
As an estate planning attorney, I have rarely seen large accounts with Computershare due to the wide availability of brokerage firms serving our communities. What I often see with Computershare are small holdings, often worth a few hundred dollars or at most a few thousand dollars.
Nothing to worry about, you might think, but accounts can be troublesome when settling an estate.
Do you have a Computershare account?
You may have a Computershare account, but don’t think too much about it.
Many Computershare accounts were created for people who held policies with the Prudential Insurance Company of America or the Metropolitan Life Insurance Company. These companies were owned by policyholders, but were later “demutualized” and converted from a mutual life insurance company to a stock life company. The policyholders ended up with their policies and shares in the company.
Prudential became Prudential Financial, Inc. (trading symbol PRU) and Metropolitan became MetLife, Inc. (trading symbol MET). Rather than issuing stock certificates, the two companies opened accounts for their new shareholders with Computershare Inc.
Other companies have shares held by Computershare. AT&T is one. AT&T is not alone. Stock registration with Computershare often follows when a company separates or splits into multiple entities.
Because it is often a small asset, many people forget about the Computershare account. An annual or periodic statement is received but set aside and forgotten. If the account is small enough, a tax form is not even sent. Some dividend checks may be received, again often small and barely enough to pay for a dinner out. Many of these checks are not even cashed and end up as unclaimed property. The Computershare account receives little attention.
Have you planned the Computershare account?
Small Computershare accounts can be a problem
Computershare accounts are often a problem after death.
One of the main reasons for this hassle is that Computershare – even for small holdings – requires a Medallion signature guarantee. The guarantee is well-meaning because it confirms that the signature authorizing the sale or transfer of shares is genuine and that the signer has the legal capacity and authority to sign the transfer documents. There can be a whole pile of paperwork to fill out and provide.
The problem is that it is very difficult locally to obtain a Medallion Signature guarantee. Many banks, credit unions, brokers, and finance companies don’t offer it at all. Those who generally limit it to customers, and even then, customers may not qualify for the guarantee unless they fall into specific categories of customers. This is understandable, as there are risks in providing the guarantee.
Yes, sometimes there are alternatives to the Medallion Signature Guarantee. However, only at an additional cost.
It is not worth the trouble.
The best advice may be to close or update the Computershare account
If you have a small Computershare account, the best advice might be to sell all the shares and close the account after taking into account any tax liability. Enjoy the product. It’s much easier for you to do that than for those who will inherit from you.
Other ideas could be to transfer the shares to a brokerage account, donate the shares, give them to the family now, add a co-owner, or designate Transfer On Death (TOD) beneficiaries. Even then, in the event of death, the Signature Medallion Guarantee may be required. Closing a small account usually makes the most sense.
What you don’t want to do is let things drag on thinking it’s not worth worrying about. This will be a problem for someone down the road.
Jim Rapp is a Quincy-based practicing attorney. He publishes and lectures extensively on estate planning, business, education law and other legal issues. He is a founding partner and contributor to Muddy River News LLC.
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