Estate executors that are put in charge of a person’s assets are tasked with maintaining the current value of those assets. At times an Arkansas executor might have to expend money and resources to keep those assets from deteriorating. However, is an executor obligated to actually increase the value of the assets under the executor's supervision? If the executor is not instructed to do so by the owner of the estate, it is very problematic or even illegal for the executor to take such action.
Executors are supposed to run an estate in accordance with the wishes of the owner of the estate, so any executor must be very careful in interpreting the owner’s desires too liberally. According to Marketwatch, however, some executors may feel they can increase the value of an estate during the process of settling the estate. They may decide to do this to help pay off debts that the estate owes. For whatever reason that motivates an executor, the fact remains that trying to use the estate's assets to increase the value of the estate can be risky.
For instance, the terms of an estate may require a specific percentage paid to beneficiaries based on the value of the assets taken from the estate’s tax return. This is known as a pecuniary amount. The risk lies when an executor tries to use monetary assets from the estate to make an investment. An executor may decide to invest the assets in stocks or some other investment portfoilo. If the investment goes south, the executor may end up with less money than what was initially invested.
An executor that ends up devaluing or destroying an asset in pursuit of growing its value could end up in legal hot water. Beneficiaries that would have received the estate assets could file a suit against the executor on the grounds that the executor breached his or her fiduciary duty. In short, if an executor is not obligated by the estate owner to take any actions to boost the value of an estate or any of its assets, the executor should not do so.
This article, while intended to educate the reader on estate administration, is not to be taken as legal advice.