Ask Terry Questions Estate Distribution of Shares of Stock Instead of Cash !

Estate Distribution of Shares of Stock Instead of Cash !

By Terry Savage on June 17, 2024 | Financial Planning / Retirement

I am an 80 year old man, never married, with no immediate family of my own. I have a sizeable estate (98% corporate equities) accummulated over the past 50 years, and the value of my portfolio (~40 growth oriented companies and ETFs) significantly exceeds the 2024 federal estate tax $13.61 M maximum exclusion. In developing my revocable trust documents, I have selected a list of ~50 extended family relatives and worthy acquaintances to be my beneficiaries, with assigned percent of my estate I would like each to receive. Please advise on the feasibility and practicality of distributing individual shares of stock —rather than cash received from the sale of stock —from my revocable trust after my death. As a result of my persistent dedication to gradually building my nest egg throughout my working years, I feel it near tragic if my portfolio was to be liquidated to cash after I am gone, merely to simplify and expedite the settlement of my estate by prospective successor trustees that I discuss this matter with.

Terry Says

You’ve done a great job of planning and preparing.  But your hand shouldn’t “reach from the grave” to try to manage the lifestyle of your beneficiaries.  Many may have other pressing needs — paying down debt, college for their children, or their own desire to travel.  Why not just settle for writing a nice letter encouraging them to start investing on their own — using an IRA if they are working — so they will have a nice fortune to distribute at their death.

Your trustees can’t be paid enough to go through the process of distributing actual shares, given the number of beneficiaries.  And it would be impossible to decide fairly who gets what.

PS.  I hope you have included some charities among those beneficiaries.

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