How can the risks arising after a nominee’s death be avoided?
The most fundamental solution is to complete registration as a shareholder of record at the earliest possible time, transferring the equity into the name of the actual investor and eliminating the nominee arrangement. Where registration as a shareholder of record is not yet possible, the following must be ensured: execute a written nominee shareholding agreement and have it notarized; retain complete capital contribution records with the purpose noted; preserve evidence of dividends and participation in management; include a fallback clause in the agreement addressing the nominee’s death; and have the nominee make arrangements for the nominee-held equity in their will.
