Estate Planning: Tracking down mystery stock

A: First, take a look at the statements that show that they own the stock. Check to see if the statements describe the shares. Specifically, you should be looking to see if the statement says certificated or non-certificated.

If it says certificated, you likely have some missing stock certificates. If it says non-certificated, there likely aren’t any physical stock certificates and the shares are book entry shares held in an account.

The reason that you may not know that your parents purchased stock is because they might not have. One of the things that caught my attention in your question is that it involves an insurance company’s stock. That, at least to me, suggests a demutualization.

Years ago, it was common for insurance companies to be set up as mutual insurance companies. What that basically means is that the policy holders owned the company and capital stock was not issued. At some point, especially in the 1990s if memory serves, mutual insurance companies began to demutualize. I’m guessing it was a way to raise capital. In any case, when the companies demutualized, they issued stock, and policy holders received some of it. I’ve seen countless estates that contain stock that resulted from a demutualization of an insurance company.

It's been my experience that stock issued to policy holders due to a demutualization was almost always book entry shares. Rarely have I seen certificated shares that resulted from a demutualization. I’m not saying it never happened but I don’t recall seeing any.

In any case, contact the company’s shareholder services to find out if the stock is still outstanding. You can also check your parents' tax returns to see if there were any dividends reported. If so, the stock is likely still out there.

You transfer the stock exactly like you would any other asset. If the shares are non-certificated, there might be a beneficiary designation on the account. If not, the shares are likely a probate asset that would transfer like any other asset. You may be able to utilized a small estate affidavit or, if the estate is over the value threshold, via a formal probate administration.

Check with shareholder’s services first and then talk to an attorney. Obviously, if you can use an informal probate procedure, i.e. a small estate affidavit, it will be less complicated and expensive than opening a probate administration.