Prudent Executors

Prudent Executors

By: Martin M. Shenkman, CPA, MBA, JD

Most executors make one of two (or sometimes a combination of both) errors: [1] Liquidate most estate assets, leaving the proceeds in a checking and/or money market account; [2] Hold onto securities under the mistaken belief that they can do so without exposure, since the decedent died holding them. While liquidity is important in many estates, and some heirs want distributions in kind (or the securities the decedent owned actually constitute a reasonable portfolio for the estate to continue to hold), the recommended approach is for the executor to hire an investment advisor to evaluate the relevant factors affecting the estate and beneficiaries, develop a written investment policy statement (IPS) and act in accordance with the Prudent Investor Act.

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