Handstand shrugs are a seldom used exercise yet they can be quite important.
Ask any professional hand balancer, or just watch them at work, and you’ll see how much their shoulders are shrugged up towards their ears. (Here is an example of Cai Yong.) This is necessary to get the locked out position that makes balancing much better.
But this isn’t necessary to do just a regular handstand. Handstands can be done even with the shoulders packed in, but this is not optimal.
Kick up into a handstand against the wall. Keep your arms locked at the elbows the entire time. Just using the muscles of your shoulder girdle and traps, shrug up, trying to make yourself taller. Stretch as far as you can go. Then lower using the same muscles and repeat.
The most important thing is that this exercise can help build the shoulder flexibility you need to get into the best handstand position possible.
Handstand shrugs are also a great way to build up to handstand pushups as I cover in my book.