Not All Share Services Are Created Equal

In an article I posted on the site back in July I warned members of a pseudo-death duty imposed by the banks in the form of requiring probate to be obtained. This occurs when shares are owned by one member of a couple in their own name, that are worth more than $15,000, and the surviving partner or spouse wants to either assuming ownership or sell them. It is worth noting that some share services take a more common sense approach and either set higher levels at which probate is required, or decide on a case by case approach, it is important when choosing what share service to use to not only consider transaction costs. The table shows the cost of a $15,000 share trade and the value placed by each of the share services on when probate is required. Saving a few dollars on a shared trade, and picking a less flexible share service, can result in major costs in the future. If you are using a share service that has a low value for requiring probate, and want to avoid this unnecessary cost, you have two options. The first and possibly most costly is to sell the share portfolio over a number of years to reduce or eliminate the chance of paying capital gains tax. The second is to open a trading account with a more customer oriented share service. Once this is done your share holdings can be transferred to this new account via a broker to broker transfer without any capital gains tax consequences.