What happens to the ownership of stocks after a person dies?

When a person passes away, the transfer of stock ownership will depend on the provisions made by the
deceased before their passing. If a married person who held stocks jointly with a spouse dies, then the
surviving spouse typically becomes the sole owner of those stocks. However, the process is different if
the decedent held stocks on his or her ownership.

Transfer of stocks to a beneficiary

If a person who holds stocks designates a beneficiary prior to their death, then that beneficiary becomes
the owner of the stock once the holder passes. Most legal and financial experts recommend naming a
transfer-on-death beneficiary in order to avoid the probate process.

Uniform Transfer on Death Security Registration Act

Many states have adopted the Uniform Transfer on Death Security Registration Act, which allows
investors to designate a transfer-on-death (TOD) beneficiary for whatever stocks they own. This enables
the beneficiary to receive those stocks automatically once the holder passes away. The stocks do not
have to be listed in the deceased person's will, which means they can be transferred without having to
go through probate.
If a TOD beneficiary is named, then after the holder of stock dies, his or her securities are transferred
immediately to the designed party; the executor or administrator of the original owner's estate does not
need to take any steps to facilitate the transfer. The only thing a TOD beneficiary needs to do is re-
register the stocks in question in his or her name, which generally involves sending a copy of the
previous holder's death certificate and a form of proper identification to a transfer agent (a person in
charge of maintaining records of stock ownership), who can complete the transfer.

The probate process

If a person who holds stocks passes away without naming a TOD beneficiary, then the probate process
must be initiated. Probate is a legal process for settling a deceased person's estate. When a person
leaves stocks behind, a probate court must first determine who gets the shares and then direct the
executor of the estate to transfer ownership accordingly. To facilitate a transfer, the executor will need
a copy of the decedent's will or a letter from the probate court confirming that the beneficiary in
question is indeed the person entitled to receive the shares. The executor must then send these
documents to a transfer agent, who can complete the transfer of ownership.

How can I transfer shares of stock of a deceased stockholder?

The heirs must submit the Estate Requirements and follow these procedures: Requirements (in
chronological order): a. NSO/Certified True Copy of Death Certificate b. Original Stock Certificate (in case
of Lost, the heirs must comply first the requirements for lost cert replacement) c. Duly notarized
Affidavit of Self – Adjudication (for sole heir) or Deed of Extrajudicial Settlement of Estate (template) (for
more than one (1) heir) d. Affidavit of Publication – should be published one every three (3)
consecutive weeks – in the publication, it should reflect the doc no. book no., page no., and series no. e.
Payment of Estate Tax (BIR) – The requesting heir must have the Certification from the Issuer of the
Company or from PSE on the Book Value of the Shares and the Market Value of shares at the Time
of Death before going to BIR. List of Documents needed from BIR – CAR (form 1954) – Tax Clearance
Certificate – Payment of Documentary Stamp (form 2000) – (Total no. of shares X Market Value at the
time of death must appear in the form) f. Secure a Surety bond/Heir’s bond from a Non-Life
insurance company (optional if you want immediate transfer of the shares. If not, transfer may take
place two years after the publication) g. Registered Docs from Registry of Deeds – Shares of Stocks are
to be registered under Personal Property – requirements from A-F must be present (all original docs) h.
Two valid IDs of all heirs i. Processing Fees – Php 800 per account – Php 110 per certificate j. Duly
accomplished request form.

How can I sell my shares?

A stockholder who wishes to sell its shares can transact through any of the stockbrokerage houses,
which are members of the Philippine Stock Exchange.