Inherited Underlying Stock Shares - What's the Value Date?

[Janz Hobbs]

Jurisdiction

Massachusetts

My father died intestate in 2013. I'm his only heir. I recently found that there is unclaimed property held by the state, namely 4 underlying stock shares and some dividends. The "Report Year" on the claim form is 2018, which I'm assuming is the year in which the property was escheated to the state.(?)

I believe I'll have to get an appointment from probate court to claim these shares, but I need help understanding what happens next assuming I get the appointment:

• Do I inherit the stock and have them put in my name?
• Are they cashed out as of the date of death and I inherit whatever value they were on that date?
• What is the significance of the Report Year (2018) on the claim form?

Basically, I'm trying to determine if it's worth the cost of getting the probate appointment to move forward, which I think is $375, or just let it go.

I guess I should mention that I don't have his birth certificate. All I have is his death certificate and my birth certificate showing him as my father. Is that adequate?

Thank you!

 

[Tax Counsel]

The "Report Year" on the claim form is 2018, which I'm assuming is the year in which the property was escheated to the state.(?)

I haven't seen it and don't know which agency's/organization's claim form is involved. If the shares are held in a MA bank or financial institution the time period is three years. See the information provided by the MA Unclaimed Property Division.

I believe I'll have to get an appointment from probate court to claim these shares...

If she died in MA did not have many assets then there is a simplied process you can use to clam the property called a Small Estate Closing Statement. You'd want to check to see if any probate was done shortly after she died before doing that.

but I need help understanding what happens next assuming I get the appointment: Do I inherit the stock and have them put in my name?

Yes, if you want them. That would be the only reason you'd want to bother doing this.

Are they cashed out as of the date of death and I inherit whatever value they were on that date?

If you are actually inheriting her shares of stock then the value of it what it is trading at on the exchange on the day in question, if it's publicly traded stock. If the company is privately held, then what it is worth the fraction the of the company's value the stock represents. Valuation of a privately held company is not a simple thing to and would likely cost you well over that $375. In that case, perhaps the corporation itself would pay you something so it can retire the shares.

What is the significance of the Report Year (2018) on the claim form?

No idea since I've no clue what form it is and what information is on it.

Edited to add: there is no tax to pay on inheriting the stock, but the sale is taxable income to you. The gain/loss on the stock would be the difference between what it was worth on the day she died and what you are paid for it.