Probate lawyers don’t get to invest probate funds

This article from Wisconsin caught my eye.  It looks like this probate lawyer misinvested and/or took $1.6 million in funds from his clients.  Incredible.

I’ve seen California probates where a substantial amount of the probate estate‘s money is put in the probate attorney’s client trust account.  This never made any sense to me and is, I believe, contrary to the probate code.  Assume an estate is all cash.  However, even with today’s very low interest rate, putting the entire estate in an interest bearing account will produce interest.  Put the same money in the attorney’s client trust account and the estate won’t get any interest.  There’s just no benefit to the estate to do this.

The Probate Code

The probate code requires all the liquid assets of the estate be put in an interest bearing account. However, this is except for the amount reasonably necessary for the administration of the estate.  Moreover, there can be times that some of the estate’s cash are in the probate attorney’s client trust account.  But this doesn’t happen often.  There is just no good reason to put large amounts of money into the attorney’s client trust account.

Similarly, the attorney should never invest the probate estate’s assets.  Instead, the executor or administrator must decide the extent that funds are invested.  Never, never allow your probate lawyer to invest estate assets.

Do you still have questions regarding probate lawyers? We know this process can be confusing and difficult. Talk to San Diego estate planning and probate attorney Scott Grossman about your situation and the questions you have. Call our lawyers at (951) 683-3704 or (888) 443-6590 for your FREE 30-minute telephone consultation. Also, order our FREE book The Insider’s Guide to California Probate and Trust Administration.

 
Scott Grossman

Scott Grossman

Attorney

The Grossman Law Firm, APC · 525 B Street, Suite 1500, San Diego, CA 92101 · (951) 523-8307
 

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