How Are Inherited Shares and Investment Funds Taken Over? MKK and Brokerage Firm Procedures

Taking over inherited shares and investment funds consists of the stages of finding the account, documenting entitlement and transferring the assets to the heirs by book entry. The passing of a security by inheritance and its sale on the exchange are not the same transaction. The assets existing on the date of death, and the dividends and cash movements arising afterwards, should be tracked separately. [1]

How are investment accounts found?

MKK’s investment account inquiry through e-Devlet, which concerns the person of whom one is an heir, can be used to identify the institutions. A detailed portfolio statement is then requested from the bank or brokerage firm. The absence of a result in the inquiry does not establish that there are no domestic or foreign investments at all; a direct application to the institution may be necessary. [2]

An MKK record, a foreign brokerage account, physical securities certificates and a share in a non-public company are not substitutes for one another. For a share in a limited liability company, the trade registry and the company books are assessed separately; for a portfolio abroad, the procedure of the custodian country is assessed separately. [3]

Which items should be separated in the portfolio?

A snapshot of the portfolio at the time of death does not explain all later movements. Transactions such as splits, paid-in capital increases, fund mergers or dividends may continue during the inheritance process. The institution should be asked in writing how these rights will be protected and who may give instructions.

Heirs’ entitlement and joint instruction

The certificate of inheritance, identity documents, the necessary tax documents and the authority of representation are submitted. Where there are several heirs, the joint entitlement over the estate is taken into account. In whose account and in what amount the assets will be transferred must be determined by a valid division or an appropriate joint instruction. A single heir’s transfer of the entire portfolio to their own account is not a general freedom. [1]

If the heir needs to open an investment account, identity, tax residency and the institution’s customer acceptance documents are completed. For a foreign heir, matching the passport with the foreign identity document is also important. The power of attorney should cover not only obtaining information but also the authority for the intended transfer between accounts, sale or collection transaction.

The legal composition of the portfolio is determined, not only its total value

An investment account may contain shares, investment funds, debt instruments, cash balance, a dividend receivable, pledged assets and open positions together. The passing of these items and their conversion into cash are not the same process. The brokerage firm should be asked for the security’s code, quantity, place of custody, transaction status and the restrictions on it. The statement “the portfolio is 2 million lira” alone is not sufficient, because it does not show which right will be taken over. [1]

The MKK or e-Devlet inquiry makes it easier to reach the investment account; but it does not replace the detailed portfolio and movement statement to be obtained from the institution. Additional review may be necessary for foreign market products, different custodians or accounts closed in the past. That no account appears as a result of the inquiry does not establish that the deceased owned no securities or company shares. [2]

How are market movements after death managed?

A change in value is distinguished from an unauthorized transaction

A fall in the value of the portfolio does not in every case give rise to the liability of the brokerage firm or of another heir. Market movement, failure to give a sale instruction, inability to transact because of insufficient authority, and an unlawful transaction are different causes. In an allegation of liability, the instruction that could be or should have been given on a particular date, the institution’s reply and the link to the loss are made concrete.

Selling with the deceased’s username and password does not provide legal authority on behalf of the heirs, even if it is technically possible. Joint entitlement, power of attorney and the institution’s procedure must be completed. Where there is a risk of a sudden price movement, the heirs should evaluate a valid joint instruction, appropriate representation or the necessary judicial protection route. It is not correct to recommend automatic sale or automatic waiting for every portfolio. [1] [6]

Corporate actions must be followed

Dividends, bonus shares, the right to take part in a paid-in capital increase and similar transactions may continue during the inheritance process. The period for exercising a right does not stop merely because the inheritance procedure is being awaited. The upcoming dates for exercising rights and the transaction options are requested from the institution in writing. Whether additional money is needed for participation and who will make the decision are clarified among the heirs. [3]

In-kind transfer and sale options are compared

In-kind transfer is the transfer of a security, by quantity, to the account of the rightful holder; a sale is the conversion of the security into cash. Whether each product can be held in the heir’s account and transferred between institutions may differ. The rightful holder’s suitable investment account, identity and tax details and the custody conditions of the product are reviewed. Opening an account for a foreign heir may require more review than providing an IBAN for an ordinary bank account.

In a sale, price, commission, tax, value date and currency conversion affect the economic result. In an in-kind transfer, on the other hand, the division of quantities, fractional units and the preferences of different heirs may cause problems. The transaction instruction should not be left at the level of “let the inheritance share be paid”; it should be specified whether an in-kind transfer or a sale is requested, and for which product and quantity. [1]

The tax value and the division value may not refer to the same date

The valuation rule to be applied for inheritance tax is determined by the records tied to the date of death and by the type of product. The later sale price, or the value the heirs accept in the division, may be different. Writing the portfolio value on the date of death as identical to today’s sale proceeds makes income and changes in value invisible. The tax calculation and the economic accounting among the heirs should be tracked in two separate tables. [4]

As a hypothetical, an account holding 1,000 units of securities at death may have gained bonus shares or generated dividends by the time of transfer. If only the first 1,000 units are transferred to the heirs and the fate of the later rights is not explained, the closing is incomplete. Conversely, a change in quantity because of a merger or split of the product does not always mean a loss; it is explained by the corporate action record.

How are evidence and the claim constructed in a dispute?

The brokerage firm contract, notice of death, certificate of inheritance, instructions, account movements, transaction confirmations and the institution’s replies are assessed together. In an allegation of unauthorized sale, who made the transaction, through which channel and with what authority is important. In an allegation of delay, on the other hand, the date on which the file was completed and the request the institution could lawfully fulfill must be determined. The mere fact that the market price later rose does not make the whole difference compensation. [6] [5]

Where there is disagreement among the rightful holders, the institution cannot be asked to transfer the entire portfolio to one person’s account. An estate representative, division or other appropriate judicial routes are assessed. An application for administrative supervision and a claim or compensation action have separate consequences; the effect of the application time limit is investigated separately.

At closing, the zero or remaining balance of the old account, the products and quantities moved to the new accounts, the cash distribution and the fees are compared. Giving a transfer order does not by itself prove that the entry has passed to the receiving custody account. The institution’s confirmation and the rightful holder’s account statement should be obtained together.

Order of steps for a foreign heir and an heir abroad

Citizenship and residence are not the same legal criterion

A Turkish citizen heir living in Germany and a foreign heir living in Türkiye may not be subject to the same document and account opening conditions. First, the deceased’s citizenship, the identity of the heirs, the institution holding the account and the nature of the assets are determined. Under Article 20 of Law No. 5718 on Private International and Procedural Law, the national law of the deceased is significant in the law applicable to the substance of the inheritance; the exception concerning immovable property in Türkiye does not apply directly to all investment accounts. The special connecting rule on the opening, acquisition and division of the inheritance is also assessed separately. Applying the shares in a foreign certificate of inheritance to the brokerage firm without any review is not a safe method. Law No. 5718, Art. 20

In a file conducted from abroad, the first aim is not to sell but to verify the account and the authority. A current list of documents is obtained from the institution; the certification and translation requirements of foreign documents are determined. The power of attorney should not be left with only a general authority to pursue the matter; if necessary, the scope of opening an investment account, obtaining an account statement, transfer of the inheritance, transfer between accounts and sale transactions should be clarified. Sale and collection of the proceeds may require different authority and account controls. Payment to the attorney-in-fact’s personal account should not be accepted as a standard solution.

Four-stage closing check

1. The institutions and accounts belonging to the decedent are determined. The MKK inquiry is a starting source; on its own it is not regarded as a complete inventory of all the assets.
2. The portfolio at the date of death and the later movements are taken separately. Share quantity, fund units, cash, dividends and other rights are written down.
3. The conditions of heirship, representation, tax and joint instruction are completed. The decision on in-kind transfer or sale is explained product by product.
4. After the transaction, the receiving accounts are compared with the outgoing account. An application number or a transfer instruction alone does not show that the file has been closed.

The official MKK heir inquiry service is an accessible starting channel for researching the account. Private account information that requires identity verification was not viewed while this article was being prepared.

How is the value of shares in a tax return determined?

Exchange value does not in every case mean the closing price on the day of death

Article 10/d of Law No. 7338 on Inheritance and Transfer Tax contains a special valuation rule for shares. For shares listed on the exchange, the last transaction value realized within the three years before the date of death is taken into account. For shares that are not listed on the exchange or were not traded within those three years, there is a provision based on face value. It should not be overlooked that this is the statutory rule for the initial tax assessment; the administration’s later valuation and examination should not be disregarded. It is not correct to apply the share rule unchanged to fund units, bonds and every kind of financial product. Law No. 7338, Art. 10

The document used for tax and the calculation of the economic division serve different purposes. For example, in an account holding 2,000 shares on the date of death, the appearance of 4,000 later because of capital transactions does not by itself mean that the value has doubled. In a hypothetical division, the existence of two equal rightful holders also does not lead to the result that each could alone place a sale order for 2,000 units. The exercise of rights held in joint ownership, a valid division and the institution’s transaction conditions must be completed. Turkish Civil Code, Art. 640 et seq.

A real Court of Cassation decision: awarding a monetary value without assessing the request for return in kind

The dispute and the outcome of the decision

In the decision of the 11th Civil Chamber of the Court of Cassation (Yargıtay 11. Hukuk Dairesi) dated July 1, 2013, E.2012/11663, K.2013/13911, the transfer of shares in a joint investment account after the death of one of the account holders was discussed. In the dispute, the transfer of all of certain shares instead of half of them, and the plaintiff’s request for cancellation of the transaction, came to the fore. The lower court awarded a certain monetary amount; the Court of Cassation held that the request for cancellation of the transfer between accounts also covered return of the shares in kind, and did not find it correct that a monetary value was awarded directly without assessing this request. The decision was reversed on this point. Full text of the decision — De Jure; an account may be required for access

How can this decision be used in today’s file?

The decision does not create a general rule that half of every joint account automatically belongs to the estate. The account contract, entitlement and the concrete evidence of the dispute must be examined. Likewise, the monetary amounts in the old file cannot be carried over to a current portfolio valuation. The practical contribution of the decision is the correct framing of the type of claim: if the shares are to be recovered, return in kind; if that is not possible, a claim for value or loss should be explained together with its legal conditions and procedural relationship.

A plaintiff should not be content with merely saying “my inheritance share is incomplete”; they should show which asset, how many units, on what date, was moved to which account. The basis of the transaction instruction, signature or electronic approval records and custody movements are requested from the institution. The defendant may also assert that the transaction was based on an authorized joint instruction, a valid division or another legal ground. The discussion thus turns from an abstract price difference into an examination of concrete records and authority.

Which distinctions matter in litigation and interim protection?

A division dispute among the heirs and a brokerage firm’s act in breach of contract are not the same action. The court with subject-matter jurisdiction, mediation as a condition precedent to litigation, the parties and the subject of proof are determined according to the chosen claim. An administrative application to a capital markets institution does not suspend every private-law time limit and does not replace the court. In concrete dangers such as the transfer of the shares to third parties or the approach of a deadline for exercising rights, appropriate interim legal protection is evaluated. The scope of the request, prima facie proof and security conditions must be determined according to the file. Law No. 6100 on Civil Procedure, Art. 389 et seq.

The successful closing of the file is not merely the reduction of the account balance to zero. All assets, cash movements, deductions and remaining rights must be explained; the amounts moved to the heirs’ accounts must be documented. This check enables an heir abroad to verify remotely that the transaction has really been concluded.

Conclusion

The transfer of an investment inheritance is a recording process that requires tracking of quantities and rights. A correct inventory, joint instruction, appropriate tax valuation and a final check of the transfer between accounts ensure that the assets are taken over without loss or duplicate transactions.

Related articles: Life insurance death benefit; Transfer of crypto assets by inheritance; Gold, jewelry and bank safe deposit boxes; Inheritance procedures and power of attorney without coming to Türkiye; Death under BES and payment to the beneficiary; Inherited company shares; Inheritance of a company share

Frequently Asked Questions

Must the shares necessarily be sold?

No. An in-kind transfer may be considered under the institution’s conditions and the valid instruction of the rightful holders.

Does MKK directly pay out all the money?

The brokerage firm’s payment or transfer between accounts is different from the inquiry and registry function.

Is the dividend included in the inheritance file?

Depending on the date the right was earned and to whom the relevant asset belonged, it is taken into account in the inventory and the division.

Is an account at a foreign brokerage firm transferred in the same way?

No. The documents and inheritance procedure of the country where the institution is located are reviewed separately.

Sources and legal bases

1. Law No. 4721, Turkish Civil Code
2. e-Devlet / MKK, investment account inquiry on behalf of the person of whom you are an heir
3. Law No. 6102, Turkish Commercial Code
4. Law No. 7338 on Inheritance and Transfer Tax
5. Law No. 6100 on Civil Procedure
6. Law No. 6098, Turkish Code of Obligations
7. Law No. 5718, Art. 20
8. Full text of the decision — De Jure; an account may be required for access