Ship-shape or shape-shift?

WE’RE TOLD that there’s up to £15bn in apparently ownerless assets floating around the system in the UK alone. Even if we assume that this is a huge overestimate and there’s only around £5bn, that’s still quite an agreeable amount to find down the back of the sofa. Factor this together with the number of discrepant asset schedules that come in for probate valuation and it looks like a good bet that many PRs are — unwittingly — not fully aware of the true extent of their deceased’s portfolio. This is not surprising given how any portfolio will change in shape and complexion over the months and years, consider the buoyant mergers and acquisitions market in recent times and the effect of stock splits, dividend payouts and the like. Consider, too, whether your deceased could have invested in different names (for example a maiden, or previous married name, or from previous addresses). It’s surprising how much money there is sitting in unclaimed dividends, for instance, due to such factors. It makes sense to verify the position, especially as the available evidence (share certificates and so on) will not always tell the whole story. Many portfolios give cause for enquiry absent from the valuation schedule, especially where the ownership of one stock strongly implies the ownership of another. Examples include the demerged British Gas. Similarly, if you have some O2 share certificates, you may find that your deceased is on Telefonica’s dissenters’ register. In addition, the ownership of the O2 shares strongly implies the ownership of BT ones (assuming you have no other evidence of the ownership of BT) and someone should check the position — it’s surprising how often the BT will come out of the woodwork.

Overseas stocks
A straightforward example that still arises frequently is Hanson Trust, which demerged in the mid-1990s. Ownership of stock in any of the daughter entities strongly implies ownership of all the others. Just to add to the fun, two of the demerged companies (Millennium Chemicals and US Industries) are traded in the US. They’ve both changed hands (Millennium Chemicals was a part of Lyondell Chemical Inc and is shortly to be acquired by Basell; and US Industries was picked up by Jacuzzi Brands, itself changing hands in early 2007). Similarly, Bowater Plc, which delisted from the London Stock Exchange and listed as Bowater Inc in the US, has since merged with Abitibi to form AbitibiBowater Inc. The intricacies of stock repatriation will form the basis of a future article.

The watchword
Given portfolios’ shifts in shape and complexion, it makes sense to check the position – it’s just as easy to be sure everything is shipshape – and the estate will benefit accordingly. ?

Nicholas Beetham LLB is relationship manager, Trusts & Estates at Title Research. You can contact him on 020 7549 0900 or at nicholas.beetham@title-research.co.uk.

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