Keywords: listed-company estate inheritance, stock inheritance, fund shares, winning case examples

In high-net-worth families across Shenzhen, holding listed-company stocks, brokerage account assets, and publicly offered fund shares is very common. Once the account holder passes away, how are these securities assets inherited? Can the spouse simply take the money in the stock account? Is a transfer of ownership required?

According to Article 1122 of the Civil Code of the People's Republic of China, an estate is the lawful personal property left behind by a natural person upon death. Listed-company stocks, funds held in brokerage accounts, and fund shares are all lawful property and may be inherited in accordance with the law. However, unlike cash, these securities assets cannot simply be withdrawn; they must go through a dedicated non-trade transfer procedure.

There are generally several ways to handle the inheritance of securities assets. First, if the heirs have no disputes among themselves, they obtain an inheritance-right notarization at a notary office and then use the notarial deed to apply to the securities company for a non-trade transfer of the stocks and funds. Second, if the heirs have disputes, they obtain an effective court judgment through litigation and use that judgment to apply to the securities company for the transfer. Third, if the decedent held accounts at multiple securities companies or multiple fund companies, each account must be handled separately. It is particularly important to note that if the stocks constitute joint marital property, half of the shares must first be allocated to the spouse, and only the remaining portion is treated as the estate to be inherited. In one winning listed-company estate inheritance case our firm handled, the decedent had held large quantities of stock and options in a listed company, and the heirs included overseas-resident parties. We combined notarization with cross-border authentication to successfully complete the non-trade transfer of the brokerage account.

It should be noted that securities-asset inheritance also involves specialized issues such as stock-price fluctuations, restricted shares, and option entitlement. In particular, equity inheritance involving executives or founders of listed companies may also be subject to share-reduction rules and company charter constraints. In summary, listed-company stocks and fund shares can be inherited in accordance with the law, but the non-trade transfer must be completed through notarization or litigation. We recommend that families holding securities assets consult an experienced inheritance lawyer in advance to properly organize the estate and plan the succession arrangement.