Tuesday, May 28, 2013

Rules for a Prudent Man

Last week, Jack realized that he needed to act as a “prudent man” in carrying out his duties as the personal representative/executor of his mother’ estate.  And when it comes to prudent investing, the probate laws even have a list of investments that are deemed acceptable and authorized without special authority. 

Specifically, the statute lists seven government-guaranteed investments, such as U.S. savings bonds, certificates of deposit or savings accounts with federally-insured banks, for examples, or money market funds that invest only in the seven listed types of securities. 

In 1995, a less specific and broader investment was added to the list.  Estate assets may be invested in mutual funds even if they invest in other types of securities, provided the mutual fund meets the standard of the prudent investor rule.

You can expand or further limit the acceptable range of investments for your executor in your will or successor trustee of your trust. You should make sure that the person you choose has enough guidance and latitude provided in your will or trust (trusts have a different statute) to handle your assets as you would want. 

To learn about your estate planning options, call our office at (815) 436-1996 for an appointment.  © 2013 Gruber Law Office, Ltd.


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