Succession Planning & Family Wealth Transfer

Investing is not only about buying shares and watching them grow. It’s also about what happens to your investments after you’re gone. Many investors forget one important step: planning how their family or heirs will access their wealth.

Without proper succession planning, your shares could remain stuck at CDSC, causing unnecessary legal and financial stress for your loved ones.

🤔 Why Succession Planning Matters in Investing

🧠 Reality Check:

If you pass away without a clear plan, your shares remain in your CDSC account — frozen until your family completes lengthy legal procedures.

💡 Goal:

Ensure your NSE investments are smoothly transferred to your family or chosen beneficiaries.

🔒 Analogy:

Think of it like leaving a key to your safe — without that key, the money is locked away.

📉 What Happens to Shares When You Die?

❌ If You Have No Plan:

• Shares remain in your CDSC account
• Family cannot sell or receive dividends (if your bank account is dormant/closed)
• They must go through a court process to claim your estate

✅ If You Plan Ahead:

• Your registered beneficiary or next of kin can claim the shares smoothly
• Less stress, less delay, and your family quickly accesses what you worked for

📜 What Is a Grant of Probate or Letters of Administration?

If an investor dies, the law requires proof of who should handle the estate:

• 📜 If there is a Will: ➡️ Family applies for a Grant of Probate
• 📜 If there is no Will: ➡️ Apply for Letters of Administration

🧾 These legal documents give authority to manage the deceased’s shares and other assets.

👉 Without them, CDSC cannot release shares.

🏛️ How CDSC Handles Deceased Investor Accounts

The Central Depository & Settlement Corporation (CDSC) requires:

• ✔️ Official letter from the executor or administrator
• ✔️ Death Certificate
• ✔️ Grant of Probate / Letters of Administration
• ✔️ Broker transfer forms

📬 Once approved, the shares can be:

• Transferred to the beneficiary’s CDS account
• Sold and proceeds sent to the estate’s bank account

✅ Avoid Freezing of Shares — Register a Beneficiary!

The easiest way to secure your family’s access is to register a beneficiary now.

Steps:

1. Visit your broker (e.g., AIB-AXYS)
2. Fill in a Next of Kin/Beneficiary Update Form
3. Keep a copy for your records
4. Update anytime in the future if needed

👶 Can you add a child? Yes! But until they turn 18, a guardian manages the shares.

🛡️ Tip: Add this step into your estate plan — just like writing a Will or listing dependents in insurance.

🧑‍👩‍👧 Why Add a Beneficiary to Your CDS Account?

🧠 What is a Beneficiary?

The person who inherits your shares if you pass away.

💡 Why it matters:

Without a beneficiary, your family faces delays. The shares may sit at CDSC unclaimed for years.

✅ Analogy:

Just like registering a next of kin on your M‑PESA line, this ensures security for your investments.

👦👧 Junior Investing – Let Kids Learn Early

Succession planning isn’t just about after death — it’s also about passing on financial knowledge to the next generation.

👶 Children can own shares, with a guardian managing until they’re 18.

Benefits:

• 🌱 Start small, grow big
• 💰 Learn the power of compounding
• 🎓 Real-world financial education beyond schoolbooks

📊 Example: Compounding for Kids

– Parent invests KES 5,000 annually into shares for a child

– Assume 10% average annual return

– In 18 years, this grows to over KES 200,000

🎯 Uses:

• School fees savings
• First car or business capital
• Early retirement base

📝 Can a Child Operate a CDSC Account?

Yes — but with guardian support.

Process:

1. Fill in a Minor CDSC Account Opening Form
2. Attach the child’s birth certificate
3. Provide guardian details (parent/relative)
4. Guardian manages until the child turns 18

💬 Brokers guide you, just like opening a child’s savings account in a bank.

🎯 Final Takeaway

• ✔️ Register a beneficiary now
• ✔️ Consider writing a simple Will
• ✔️ Start investing early for your children

👉 Protect your investments today, so your family doesn’t struggle tomorrow.