Hypothetical - not needing answer fast. Also, unsure whether British/U.S law differences have much of an impact here.
Suppose Mr. Jones has ordinary shares in companies ABC and XYZ. They both give notice in May of their AGM, on the first of July and August respectively. Unfortunately, Mr Jones dies 10th June, leaving all his possessions to Ms. Smith in his will, and appointing Mr. Watson as his sole Executor.
Probate is granted on 3rd July. My question is, who (if anyone) can vote at the AGM of each company?
Essentially, what happens to the voting rights of someone’s shares after they die, and is there any kind of legal limbo in these circumstances?
IANAL, but my WAG is that the shares belong to Ms. Smith, she can vote them. However, not having possession - they are managed by Watson, she should be able to instruct Watson the vote on her behalf.
I guess the question is - how is the vote managed? More a practical question that a legal one. Does an envelope arrive at Jones’ address of record to be filled in and sent back? Is there an admission process to an in-person meeting? In which case, need to know what criteria the company admission people use. Do you need a signed affidavit?
Think of it like - if Jones left a rental property, who decides what renting can happen during probate? Presumably, again, the executor decides until the estate is settled, but would be foolish not to consult to let the heir make the decision.
(One of my relatives, while managing an estate as executor, for example, rolled over some investment bonds. They eventually were distributed to the heirs but those heirs had to wait for the new maturity dates to cash them in without penalty.)
How does a shareholder prove ownership when they buy shares? I assume there’s a registration process, and one option would be for the executor to process the registration. I recall some notices of shareholder meetings in the news say “owner of record as of X”, so presumably if you proved you were the heir of Jones you are entitled to vote on their behalf. IIRC from my nephew the executor, would it be similar to taking over things like bank accounts, you provide the appropriate documentation including death certificate, probate, etc. to the necessary authorities to decide?
Less than one month would be a quick probate grant, but it’s your scenario. Generally, once probate is granted the executor is the custodian of the shares and may vote at the GM but they have a fiduciary duty to act in the best interests of the beneficiaries. That’s my understanding.