In this situation, some dividend income produced by shares has been reinvested into more shares rather than being made available as cash to the estate. Some or all of the dividend amount is converted into more shares. How do we show this within Probate Plus?
The way to visualise this is that the dividend income is initially held in a "holding" cash tracking account in Probate Plus. This "cash" is then converted into more shares by showing the new shares as purchased out of this pool of cash. Also, there may be a bit of cash left over if the value of the shares purchased doesn't exactly match the dividend receipt.
To show this :
- You record the dividends as produced by the at-death assets in the normal way, and credit the amount received into a cash account (eg "share dividend holding account").
- Next, you need to add the new shares to the list of assets of the estate. Again, add the assets as you would normally, except that this time you will set the "date added to system" AND show the shares as being "purchased" out of estate cash by choosing a cash account to debit (the share dividend holding account in this case).
- These purchased shares will then appear in the list of estate assets and can be dealt with (sold / transferred / receive income etc) just like a normal "at-death" asset. The balance of cash in the cash tracking account will reduce by the value of the shares and there may be a bit left over which you can follow with the cash tracking account.