[WSBAPT] PR best advice on investments when portfolio is down

[Bruce Moen]

Two thoughts.

I view 11.100.060 as a starting point for a probate and not a guaranteed immunity for sitting on a portfolio.
If a large account (and thus a large potential PR liability ), I'd consult with an independent consultant and not a sales person.  A broker gets a commission and thus  their advice is admissible but gets less weight because of their self interest.

Next issue is the ability to pay tax obligations. If the portfolio drops sufficiently to render the estate unable to pay death taxes and creditors, then I think malpractice. Acting upon the advice of an independent consultant would help in arguing that the PR was acting reasonably to meet the standard of care. IMHO, the standard is a moving target based upon the assets and liabilities involved..

  Bruce Moen

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Eric Nelsen
Sent: Monday, September 26, 2022 2:49 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] PR best advice on investments when portfolio is down

As we live in interesting times, I am cursed with a couple of probates where the decedent died midsummer and their investment portfolios are now down around 5% due to the market's current conniptions. What's the best practice in this circumstance, in advising a PR?

My current thought is: A fiduciary's prudent-investor and diversification standard doesn't apply to assets received in-kind from the decedent, per RCW 11.100.060<https://app.leg.wa.gov/RCW/default.aspx?cite=11.100&full=true#11.100.060>, so PR shouldn't be liable for losses. But is there a point where it's clear that the investments are a trainwreck and the PR then has a duty to liquidate in order to prevent further losses and stabilize the value? Should the PR get advice from the decedent's broker, or is that even helpful?

Sincerely,

Eric

Eric C. Nelsen
Sayre Law Offices, PLLC
1417 31st Ave South
Seattle WA 98144-3909
206-625-0092
eric at sayrelawoffices.com<mailto:eric at sayrelawoffices.com>

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