After the death of a loved one, the named or appointed personal representative’s first task under California probate law will be to prepare a Schedule of Assets (a process already described in several articles on this website). Suppose the decedent owned a large portfolio of stocks and bonds. Then each security is be listed and identified. Additionally, indicate the the nature and type of ownership.
There are two ways to issue US Treasury Bills. First, as a single name or secondly, in co-ownership (two names joined by “or”). In the latter case, one must treat them as held in joint tenancy.
Valuing a Decedent’s Stocks and Bonds
Stocks and bonds need to be valued based on the date of the decedent’s death. The price should be the average of the highest and the lowest quote during the day of trading. If the decedent died on a weekend or any day where no trading took place, the value should be set taking the average of the highest and lowest traded prices on the trading day immediately before and immediately after the decedent’s death, and in certain cases the weighted average is calculated.
Stock dividends may have been declared before the date of death, to be paid after the decedent died. Add the value of the dividend and stock.
Bonds present a similar problem. This happens when no one has paid the accrued interest. To calculate accrued interest, one has to multiply the daily interest with the number of days between the last interest payment and the date of death.
It can be tricky and time-consuming to put the correct value on each type of securities. If the size of the portfolio justifies it, the estate security valuation service of a reputed stock brokerage firm can perform this work. Furthermore, handling the job takes a short amount of time.
Do you need help valuing a decedent’s stocks and bonds? Talk to San Diego estate planning and probate attorney Scott Grossman about your situation and the questions you have. Call our lawyers at (951) 683-3704 or (888) 443-6590 for your FREE 30-minute telephone consultation. Also, order our FREE book The Insider’s Guide to California Probate and Trust Administration.
AttorneyThe Grossman Law Firm, APC · 525 B Street, Suite 1500, San Diego, CA 92101 · (951) 523-8307