Executor-Duty to Preserve Assets

The personal representative’s is responsible to preserve the assets of the estate for the payment of creditors’ claims and for distribution to the beneficiaries.

Identification of the assets and estate ownership is a critical undertaking by the personal representative’s, usually completed in different stages of the probate and can cause frustration to the personal representative’s for a variety of reasons, including bad records by the descendent.

The first step in preserving an estate is to determine what assets are owned by the estate property. The personal representative’s can start listing assets for the inventory at this stage. In most instances, the personal representative’s does not have control to convey or distributeproperty prior to qualification by the probate court. The court grants personal representative powers to act on behalf of estate.

Real property – the big Inventory Management Problem

Vacant residence creates the problems of theft and fire. Same with vacation homes.

The personal representative’s should talk with the P&C insurer to continue coverage for the estate.

Bank accounts

Promptly open estate bank account to simplify management and reporting. Deposit all income in this account and cut all disbursements from this account. Consolidate numerous bank accounts into the Estate Account.

For distributions the personal representative’s should maintain receipts, vouchers and canceled checks.

Brokerage accounts

The personal representative’s standard of care with investments is the Prudent Investor Act, requiring application of the “prudent investor” standard. The personal representative should review all estate investments for suitability.

Depending of the size and nature of the investment as well as the timeframe of the probate, a written investment plan should be prepared by a financial advisor. We have seen cases, for example, in which the decedent was a (successful) stock speculator. The personal representative's duty is to preserve the accounts; there may be a need for rebalancing in line with the new investment objective.

The financial advisor will transfer all stocks, bonds, and other securities in the decedent’s name alone into the name of the estate.

The personal representative does not have control over joint bank or brokerage accounts with right of survivorship because the asset transfers by operation of law. Bank or brokerage accounts designated POD, “payable on death” or TOD ,“transfer on death” also convey by operation of law.

Life insurance. The personal representative ascertains which polices were in effect at decedent’s death and the designed beneficiary for each. If the estate is designed, the personal representative will contact the insurer to file a claim for the insurance proceeds.

The personal representative should hold or take control over decedent’s mail to ensure bills are timely paid.

As part of recordkeeping for accounts, the personal representative must keep accurate records of all estate transactions. As stated previously, the personal representative must maintain the checking account and other accounts in a manner that will facilitate the preparation of an inventory and accounting for by the Commissioner of Accounts.