Does an executor have a fiduciary duty to sell securities if they are losing market value during probate?
by admin ~ September 16th, 2006 . Filed under: Renting & Real Estate .
Nin_jah asked:
Is this a grey area?
Vesta Schenck
Is this a grey area?
Vesta Schenck
September 16th, 2006 at 6:39 pm
I would say it is grey.
Suppose the executor sold the securitiies and then they turned around the next week and agined in value? Securities go up and down every day.
You would need to speak with an attorney, but I think they would be OK to hold.
September 20th, 2006 at 2:30 am
It’s often best to simply leave stocks and bonds in the deceased person’s name until you transfer them to the people who inherit them. You probably won’t be managing the assets for more than a few months, anyway. Especially if the deceased person was a reasonably conservative and knowledgeable investor, don’t worry about small daily ups and downs in value – after all, your are just sticking with the deceased person’s plan.
If, however, the portfolio contains volatile stocks, you will want to sell them and put the proceeds in the estate bank account or into very safe investments, such as government bonds or insured bank accounts. Common sense should tell you that investing in small businesses or most individual stocks is too risky.
Your state’s law, in fact, may restrict you to government bonds or to accounts insured by the FDIC. Pennsylvania executors, for example, can invest estate funds only in certain bonds and insured bank accounts.
If you receive dividend checks or checks for interest on bonds, deposit them into the estate bank account.