Inheriting Stocks to Heirs: A Comprehensive Guide 

Stocks are among investors’ most popular investment instruments. Stocks provide an opportunity for owners to own a small portion of a company and benefit through dividends and share value appreciation. Stocks, as a hedge, can offset inflation and provide higher returns than other investment instruments like deposits or bonds.Equity investments also have high liquidity, allowing shareholders to sell their stocks in the secondary market with relative ease. Given these significant benefits, it’s understandable that many individuals want to guarantee the correct and legal transfer of their stocks to their heirs. 

Bequeathing stocks to heirs requires an in-depth understanding of the applicable laws and procedures. Whether publicly traded or not, stocks are intangible assets that are inheritable. Here is a complete guide on how to pass on stocks to your heirs. 

1. Stocks as an Object of Inheritance 

In Indonesia based on Article 57 of Law Number 40 Year 2007 on Limited Liability Companies (UU PT) and Article 833 of the Civil Code regulate stocks as an object of inheritance. Based on these laws, stocks owned by the testator will automatically become the property of the heirs. However, the transfer must meet several conditions. Some of these conditions necessitate non-automated procedures and require several administrative steps, such as obtaining approval from other shareholders and authorized agencies. 

2. Types of Stocks that Can Be Inherited 

It is possible to inherit two types of stocks: 

• Closed-Ended Stocks: stocks that are not traded on the Indonesia Stock Exchange (IDX) and are usually owned by people who have an internal relationship with the company. 
• Open Stocks: Stocks that are already traded on the IDX and can be purchased by the public. 

3. Procedure for Inheriting Closed Stocks 

For closed stocks, the transfer process must comply with Article 57 of the Company Law, which stipulates the need to obtain approval from other shareholders and authorized agencies. This process involves the following steps: 

• Approval from the General Meeting of Shareholders (GMS): Approval for the transfer of share rights is usually obtained through a GMS. 
• Recording in the Deed of Transfer of Rights: After obtaining approval, the transfer of rights must be recorded in a deed submitted to the company. 
• Notification to the Ministry of Law and Human Rights: The Board of Directors of the company must notify the Ministry of Law and Human Rights of the change in shareholder composition, which is then recorded in the company register. 

4. Procedures for Bequeathing Open Stocks 

Open stocks also require approval from other shareholders, with the following steps: 

• Recording the Deed of Transfer of Rights: In accordance with Articles 87-88 of the Capital Market Law, the transfer of public stocks must be recorded and reported to the Financial Services Authority (OJK) and the Indonesia Stock Exchange (IDX). 
• Report to Financial Institutions: Issuers must also report changes in share ownership to the Financial Services Authority (OJK) and the Indonesia Stock Exchange (IDX). 

5. Inheritance Stocks Tax 

Essentially, if the testator reports the inheritance in their tax return, it does not become a tax item. If the heirs have fulfilled the administration requirements, they can receive inherited stocks without paying tax. However, in practice, there are certain costs that may arise during the share transfer process. 

6. Practical Steps 

To start the stocks inheritance process, here are the practical steps to take:

• Preparing Documents: Prepare all necessary documents, such as inheritance certificates and wills (if any), and share ownership documents.  
• Legal Consultation: It is advisable to consult with a legal expert or notary to ensure all legal steps have been fulfilled.
• Contact the securities company if the stocks are public stocks purchased through the securities company: Contact the securities company where the testator purchased the stocks to begin the process of transferring them to the heirs. 

7. Stocks in Securities Crowdfunding 

Securities crowdfunding is a funding method where individuals can invest in start-up companies or small businesses by purchasing stocks through a securities crowdfunding platform. You can also inherit stocks acquired through securities crowdfunding. The inheritance procedure for these stocks typically consists of the following steps: 

• Notification to the Crowdfunding Platform: Heirs must notify the crowdfunding platform of the inheritance of the stocks. 
• Transfer of Share Ownership: The crowdfunding platform will guide the heirs through the administrative process to transfer ownership of the share. 
• Verification and Documentation: Heirs may need to provide additional documentation, such as inheritance certificates and identity documents. 

Leaving stocks to your family (heirs) is easy, but there are a few things to keep in mind. First, you need to know what kind of stocks you have. Then, follow the normal inheritance procedures in Indonesia. By taking care of these simple steps, you can make sure your loved ones receive your stocks smoothly and legally.

Wallahu a’lam

References

Liputan6.com. (2022, April 17). Trivia Saham: Ingin Beri Warisan Saham? Begini Cara Urusnya. Liputan6.com. https://www.liputan6.com/saham/read/4941011/trivia-saham-ingin-beri-warisan-saham-begini-cara-urusnya?page=2 

Cara Mewariskan Saham Warisan dengan Mudah – Perqara. (2023, October 19). Https. https://perqara.com/blog/cara-mudah-mewariskan-saham-warisan/ 

Apakah Saham Bisa Diwariskan? Bisa! Begini Caranya. (2022, November 5). Stockbit Snips | Berita Saham. https://snips.stockbit.com/investasi/apakah-saham-bisa-diwariskan