Q. I am a former board member who held the office of secretary. I have a question pertaining a stock certificate. I signed a stock certificate regarding a shareholder (who died in 2010) that was approved by the previous board and issued in 2013, as a result of a stock request made in 2011, according to a lost stock affidavit.
“The brother of the deceased shareholder was granted power of attorney in 2009. Since the shareholder’s death, they added an additional person—a niece–to the certificate. As we all know, the power of attorney is no longer valid after the person dies.
“My concern is that the stock was issued to a deceased person, and that what was done could be construed as securities fraud? I want my name stricken from the stock and that the current board has the stock transfer done the correct way. Am I correct?
—Need This Straightened Out
A. “The short answer to the question is that you cannot transfer property to a deceased person,” says Marc Luxemberg, an attorney with the New York City firm of Gallet Dreyer Berkey, LLP. “The deceased has no physical existence, as well as no legal existence. The rights of the decedent can, as a general rule, only be exercised by a court appointed fiduciary.
“Accordingly, a stock certificate issued to a deceased person is a nullity, and conveys no rights. If, as it appears from the question, the stock certificate was in fact issued to a decedent and not to an executor or administrator, it should be canceled.”