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1.  Introduction to CHESS
2. TFN Exemption Table
3. Association Information

 

DECEASED SECURITY & HOLDER

Introduction | Probate or Letters of Administration | Transmission or Transfer | Joint Holdings | Death of Holders on CHESS | Dispensing with Need for Probate | Overseas Estates | Dispensing with Resealing of Overseas Probate | Small Estates | Deceased Estates - Intestacy

Introduction

The solicitor, executor or administrator, etc. of an estate will usually notify the death of a securityholder to the registry or company and will request details of the holding of the deceased together with dividend details and the registry's requirements to enable the holding to be finalised.
The response should include the abovementioned details and requirements.

Refer to : 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 former title or salutation of the deceased should be changed to "ESTATE" or "EST" together with any change of address requested. The registry computer system may also provide for the recording of a deceased holder indicator.

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 personal 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. A Section 1071B is not required if the probate was issued outside Australia and has not been resealed in Australia.

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 from the deceased's name into the name/s of the executor/s or administrator/s. If the transmission of 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 transfer 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 SCH Business 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)

Upon receipt of notification of the death of a holder on the CHESS subregister, usually by a solicitor on the solicitor's letterhead, the holding can continue to remain under the control of the participant. The original sponsorship agreement will continue to operate for up to 3 months following receipt of probate or other similar documentation by the controlling participant or until transfer or conversion of the holding(s) to the issuer operated subregisters.

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 refer to the section relating to joint holders. 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:

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

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:-

a) confirmation of the holding(s) as at the date of death;
b) requirements prior to dealing with the estate
(refer to : Form 8 ("STANDARD LETTER - DECEASED HOLDER");
c) transmission of the securities to the executors (off-market)
d) transfer of the shares to the beneficiary or some other persons (off-market)
e) sale of the securities on-market.

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 SCH Business 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 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 etc 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 the 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 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"

                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 etc. 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 &/or registries 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.

e.g. In Victoria for 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, costs would be approx $400.00.

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"

                        Form 7 "SMALL ESTATE STATEMENT AND INDEMNITY"

                        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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