[WSBAPT] gift of stock include dividends accrued but not paid?

[Doug Schafer]

We're addressing only funds received post-death. I don't believe the pre- 
or post-death date on a dividend check should determine if it passes to the 
specific legatee of the stock portfolio or to the estate's residuary 
beneficiary.  I believe the specific legatee of the stock is entitled to 
the dividend checks received post-death from that stock.

The uniform principal and income act, adopted in WA as RCW Ch. 11.104A, has 
complex rules to determine when amounts received by a fiduciary (including 
a PR) are principal or income (e.g., dividends issued based on a pre-death 
shareholder-of-record date are principal, but if based on a post-death 
record date are income). However, for receipts from specifically bequeathed 
property, the principal or income determination does not determine the 
rightful distributee, because section .050(1) states "A fiduciary of an 
estate ... shall determine the amount of net income and net principal 
receipts received from property specifically given to a beneficiary under 
[certain listed sections]. The fiduciary shall distribute the net income 
and net principal receipts to the beneficiary who is to receive the 
specific property."

The last sentence of that subsection appears to be controlling. Concerning 
that section (201) of the uniform act, particularly its last sentence, a 
2007 AICPA Fiduciary Accounting Guide (URL below) explains it, at page 35, 
"If property is specifically given to a beneficiary, that beneficiary is 
entitled to all of the net income and principal receipts associated with 
the specific property. This includes all of the amounts that the fiduciary 
receives or pays with respect to the property, regardless of whether the 
amount accrued or became due before, on, or after the decedent’s death."
http://www.boa.virginia.gov/docs/aicpapracticeguideforfiduciary_trust_accounting.pdf

Doug Schafer, in Tacoma.

On 3/15/2017 7:58 PM, Douglas Bratt wrote:
>
> I agree with Jayne.  I would think that bequest was for “all incidents of 
> ownership,” the rights to which go to the nephews, as of the date of 
> death of the Decedent, such that a dividend check issued on or after the 
> death of the Decedent would go to the nephews.
>
> If the dividend check was dated a day before the death of the Decedent, I 
> think the dividend amounts would then belong to the other beneficiary, 
> even if the check was not received until after the death of the Decedent.
>
> Regards,
>
> Doug Bratt
>
>
> *From:*wsbapt-bounces at lists.wsbarppt.com 
> [mailto:wsbapt-bounces at lists.wsbarppt.com] *On Behalf Of *Jayne Gilbert
> *Sent:* Wednesday, March 15, 2017 4:06 PM
> *To:* WSBA Probate & Trust Listserv
> *Subject:* Re: [WSBAPT] gift of stock include dividends accrued but not paid?
>
> I would think that the bequest vested at death, so any post death 
> dividends would go to the Beneficiary
>
> On Wed, Mar 15, 2017 at 3:37 PM, Josh Grant <jgrant at accima.com 
> <mailto:jgrant at accima.com>> wrote:
>
> Hi Again.
>
> I am helping a PR with a probate of a will which states in part:  “I give 
> and bequeath all stock investments which I own at my death... to 
> nephews”...  All Rest and Residue to a different beneficiary.  About 
> $4000 in dividends received after date of death.
>
> Do we assume that only the principle stock was “owned” by decedent and 
> not send any of the dividends to the nephews, i.e. dividend isn’t “owned” 
> until received,  OR, do we calculate and pro-rate the dividends for the 
> period before and after the DOD and give the specific legatee (I don’t 
> think there is such a word as a bequeathee  even though there is such a 
> thing as a devisee??) the prorated amount accrued up to the DOD?  And of 
> course it is possible the market went up or down at different rates 
> during the last quarter, but I hope we don’t have to track that to the DOD?
>
> Other ideas.
>
> Josh
>
> Joshua F. Grant, PS
> Attorney at Law
> P. O. Box 619
> Wilbur, WA 99185
> tel 509 647 5578
> fax 509 647 2734 <tel:%28509%29%20647-2734>
>
>
> _______________________________________________
> WSBAPT mailing list
> WSBAPT at lists.wsbarppt.com <mailto:WSBAPT at lists.wsbarppt.com>
> http://mailman.fsr.com/mailman/listinfo/wsbapt
>
>
>
> -- 
>
> *************************************************
>
> Jayne Marsh Gilbert
>
> Gilbert and Gilbert Lawyers, PS
>
> (360) 336-9515
>
> *************************************************
>
>
>
> _______________________________________________
> WSBAPT mailing list
> WSBAPT at lists.wsbarppt.com
> http://mailman.fsr.com/mailman/listinfo/wsbapt