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Estate Planning and Your Stock Portfolio

Estate planning is an important part of stock portfolio management but is an area that many of us fail to address adequately. Is it because we do not want to remind ourselves of our own mortality?

Because you may be successfully managing a large share portfolio (they do grow), it can't be assumed that your heirs will be equally capable.

This particularly applies when a portfolio needs to be split among beneficiaries, or parts or all of the portfolio transferred to other names.

Stock market related things that need to be detailed in a comprehensive estate planning exercise include ..

  • contact details of the stock broker you used to action buy and sell decisions
  • details of where you document your share holdings
  • details of recent buying and selling activity needed for tax returns
  • how to arrange through the registry(ies) the transfer or sale of the shares
As well as a share portfolio that would need to be sorted out, information would need to be available on such things as insurance policies, credit cards, details of bank accounts, power of attorney, and your will - as a starting list

After your demise, an executor has to go through an exhaustive - and quite often expensive - procedure to collate your financial affairs in order that your estate can be distributed according to your wishes.

As the executor may be a person you may have never met, the procedure may be quite complex, and not a problem that you would like to leave behind.

There are ways in which you may facilitate this record keeping exercise, some of which are based around lists or folders associated with do-it-yourself will kits that are available from most newsagents or post offices.

Kits are also available on the web in various countries. Here is a USA kit example and an Australian book on the subject.

Commercial personal accounting software can enable the details of an estate to be brought together in a register of assets.

Also, life insurance companies produce brochures from time to time on what information you need to record to reduce the load on your loved ones.

The brochure I use came from a supperannuation office.

Of course, solicitors and financial planners may offer a service in this regard, but you still have to dig out the information and keep it up to date.

Commercial services in Australia such as Now Sorted! facilitate this process for financial advisors - but at a cost to you.

All your important documentation, including share records and wills should be kept in a secure, portable (in case you have to get out in a hurry) and fire-resistant case.

The whole point of an estate planning exercise is that it is far easier for you to sort out you affairs in advance, irregardless of the means you use to do it, rather than to leave it to your survivors who may be obliged to outsource the problem.

Engage in this exercise as part of your financial retirement portfolio planning!

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