The 3 Biggest Investment Mistakes Florida Executors Make With Probate Money

Now that the world stock markets are gyrating and going up and down, it may a good time to discuss a Florida estate holding money or investments. Put another way, what should a Florida executor of a will do with probate assets like cash, stocks and bonds, and is there aneasy way to deal with estate beneficiaries, especially if the stock markets are going crazy?  Here are 3 common investment mistakes which Florida personal representatives can make with cash and estate investments.

1. I didn’t hire someone to manage the money. In Florida probates, attorneys and lawyers will tell you that most people who are named executors of  a will don’t have the time & experience to manage money.  So, hire an investment agent or a money manager like a bank or trust company.  You pay for those services with estate money. And, …and this is a biggie, if you choose or select, and monitor, the investment agent properly, there may be limited or no legal liability to the Florida executor of the will if there are investment losses.  But wait. What if the estate beneficiaries and family members complain about not making enough of an investment return?  Yep, there’s potential liabiilty there, too.  So, hire a pro to manage probate assets and money in a Florida estate.
2. I didn’t ask the beneficiaries or the probate court what they wanted.  Many times, the executor of the Palm Beach probate just invests based on what the deceased person invested in.  Or, perhaps worse ?, the personal representative takes estate assets and invests the estate money as he or she would invest.  No, no, no.   Read Florida’s Prudent Investor Rule, Florida Statute 518.11.  You are supposed to investment prudently.  Oh yes, read Florida investment law 518.10, too. You should investPRUDENTLY under the Florida prudent investor rule.  Don’t invest the estate beneficiaries’ funds like your own, or like someone who used to invest did.  Take the time to talk to the beneficiaries and ask them, if they are going to receive an inheritance, if they want cash or stocks and bonds.  They might agree in writing to how the estate money and probate assets in Florida should be invested, and this can limit your liabilityas the personal representative of the Florida estate. If you are uncertain, then ask your Florida probate attorney to file a motion with the Delray Beach probate court to get instructions.
3. I didn’t go to cash. If you know that the estate is going to be distributed to the beneficiaries out right and free of any Florida trust, you have to ask yourself why you would want to subject those funds to market risk.  After all, stock markets go down.  Sometime, like recently, stock market investments go down a LOT and quickly !  If youKNOW, for example, that three adult beneficiaries are going to split the $3 Million investment account in the probate equally, does it make sense to go to cash to preserve their $1 Million inheritances?  Do your beneficiaries want you to subject their$1 Million Florida inheritance to the risks of the market? Or would they rather play it safe?  Now, an executor can argue that if the estate is not going to be distributed for a  year or two, maybe there is an IRS Estate Tax Audit or pending probate litigationBoynton Beach, then the personal representative should invest all the estate assets.  That I understand.  But the executor of the Florida will should be considering these issues and conducting some type of basic analysis, either with the Florida probate lawyer, or the investment advisor, to determine whether holding cash or investing in the market, makes sense.