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

[Josh Grant]

Thanks Doug

That is very helpful and to the point.  I did find some old cases which 
talked about when a dividend is "declared" that from that date on the 
dividend goes with the stock.  That kind of makes some sense, but the 
administrative costs of going to each stock issuer and finding out when a 
dividend was "declared", at least in this case where we are talking about 
only $4000 and a number of different stocks, would be unrealistic.  So I 
will go with your accounting guide.

Josh

-----Original Message----- 
From: Doug Schafer
Sent: Thursday, March 16, 2017 1:10 AM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] gift of stock include dividends accrued but not paid?

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>
>
>
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>
>
> -- 
>
> *************************************************
>
> Jayne Marsh Gilbert
>
> Gilbert and Gilbert Lawyers, PS
>
> (360) 336-9515
>
> *************************************************
>
>
>
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