Personal Financial Adviser
I found out that my grandpa bought shares in a certain company. After he died we found the document, but heard the company had dissolved. How should my family and I approach this? Is it possible that the stocks are still around? Please advise us.
FINANCIAL ADVISER: When I was a stockbroker many years ago, a lady and her daughter entered my office with what they considered several "pieces of paper" that they had found while searching through the documents of their husband and father, who had died shortly before that.
These were stock certificates of one of the strongest companies at the time and which is still one of the stronger listed companies today. I did a quick valuation. The stock was worth a few million dollars.
Investing in stocks can lead to sharply different outturns.
Let me first emphasise that it is very important to share information about ownership of assets with family members or other trusted persons. It is also important to make a list of important assets and keep it in a secure place.
Even more important is securing certificates which show ownership of assets. As much as possible, assets should be owned jointly or a valid will should be in place to simplify the process and minimise the cost of transferring ownership after the death of their owner.
Stocks generally outperform most other forms of investment over the long term, but their prices are prone to fluctuation over time. Their prices tend to increase when companies make good profits and market conditions are favourable, but sometimes companies do so poorly, they eventually go out of business.
When this happens, their stock certificates become mere pieces of paper with no value. There are also situations when companies are taken over by others and shareholders fail to accept the offer of the new owners. Should such companies be delisted, meaning they no longer trade on the stock exchange, the owners of such stocks risk not having a market for them.
It is possible that there are still stock certificates bearing the name of the company in which your late father invested, but they would not have a market or value.
In such a case, the holders of such certificates have no choice but to accept they have no use to them and accept the loss. I am sorry that it has gone this way for your family.
Oran A. Hall, a member of the Caribbean Financial Planning Association and principal author of 'The Handbook of Personal Financial Planning', offers free counsel and advice on personal financial planning. Send feedback to firstname.lastname@example.org