When someone dies with stocks, bonds, or other investments, the executor must identify and account for assets in the California probate estate. But what happens if an executor fails to report an investment account or mismanages estate assets?
At The Grossman Law Firm, Attorney Scott Grossman handles California probate litigation involving executor misconduct, missing estate assets, and disputed inheritances.
Table of Contents
- Key Takeaways
- What Happens to Stocks and Bonds During California Probate?
- How Are Stocks and Bonds Valued After Someone Dies?
- What Happens If an Executor Fails to Report Stocks or Investment Accounts?
- Can an Executor Sell Stocks During Probate?
- What If an Executor Mismanages an Estate’s Investments?
- What Can Beneficiaries Do If They Suspect Investment Mismanagement?
- FAQ
- Related Resources
- How The Grossman Law Firm Can Help
Key Takeaways
- Executors must identify and account for investments belonging to the probate estate.
- A probate referee generally determines the date-of-death value of stocks and bonds.
- Executors may sell estate investments, but they must fulfill their fiduciary duties.
- Beneficiaries may have legal options if an executor conceals investments or causes financial harm through misconduct.
What Happens to Stocks and Bonds During California Probate?
Stocks, bonds, and other investments may become part of a California probate estate. However, accounts with designated beneficiaries or certain ownership arrangements may transfer outside probate.
The executor must identify the investments that belong to the estate and include them in the Inventory and Appraisal.
California Probate Code § 8800 generally requires the executor to file the inventory within four months after the court issues letters. The court may grant additional time.
How Are Stocks and Bonds Valued After Someone Dies?
California probate generally uses an investment’s fair market value as of the decedent’s date of death.
A probate referee typically appraises stocks, bonds, and most other securities. The executor must provide the information needed to complete the appraisal.
Investment values may change during probate. A decline in market value does not automatically establish executor misconduct.
What Happens If an Executor Fails to Report Stocks or Investment Accounts?
Suppose your father owned a substantial investment portfolio. After his death, you review the estate inventory but cannot find his brokerage account.
You ask the executor about the missing investments, but they refuse to explain what happened.
An executor may breach their fiduciary duties by concealing investments or failing to report estate assets.
Under California Probate Code § 8804, an interested person may ask the court to intervene when an executor refuses or negligently fails to file the required inventory.
Can an Executor Sell Stocks During Probate?
Yes. An executor with independent administration authority may generally sell securities on an established stock or bond exchange without providing notice of proposed action.
Different requirements may apply to other investments or when the executor lacks independent administration authority.
However, the executor must still act in the estate’s interests and fulfill their fiduciary duties.
What If an Executor Mismanages an Estate's Investments?
California Probate Code § 9600 requires executors to exercise ordinary care and diligence when managing estate assets.
Potential misconduct may include:
- Concealing or transferring estate investments for personal benefit.
- Failing to safeguard investment accounts.
- Making investment decisions that breach the executor’s duties and cause financial harm.
- Refusing to account for estate investments.
Under Probate Code § 9601, an executor may be liable for financial losses caused by a breach of fiduciary duty.
What Can Beneficiaries Do If They Suspect Investment Mismanagement?
If you believe an executor has mishandled estate investments, gather the available financial records. These may include brokerage statements, the Inventory and Appraisal, and correspondence with the executor.
An attorney can review the evidence and determine whether you have grounds to request an accounting, seek recovery of estate losses, or pursue the executor’s removal.
The Grossman Law Firm can evaluate your case and help determine whether you have grounds to pursue a probate litigation claim.
FAQ
Can an executor sell stocks without a beneficiary’s permission?
Yes, in some circumstances. An executor with independent administration authority may sell certain securities without obtaining a beneficiary’s consent. However, the executor must still fulfill their fiduciary duties.
Can I sue an executor for losing money in the stock market?
You may have grounds to pursue a claim if the executor breached a fiduciary duty and caused financial harm. Market losses alone do not establish misconduct.
What if an executor refuses to disclose an investment account?
You may have grounds to request an accounting or seek court intervention. An attorney can review the circumstances and evaluate your legal options.
Related Resources
- What Are an Executor’s Duties in California?
- How to Get a Copy of a Will in California as a Beneficiary?
- How to Contest a Will in California
- Can’t Afford Hourly Legal Fees? How a Contingency Fee May Help
- Contingency Fee in California Probate and Trust Litigation
- Can’t Afford a Probate or Trust Attorney?
How The Grossman Law Firm Can Help
If an executor has concealed investments, failed to account for estate assets, or caused financial harm through mismanagement, you may have grounds to pursue a probate litigation claim.
Attorney Scott Grossman can review the evidence and determine whether you have a legal basis to recover estate losses.
At The Grossman Law Firm, we help beneficiaries and heirs throughout California enforce their rights in probate and trust litigation.
Call (888) 443-6590 or fill out our Get Help Now form to take the next step.
Our Intake Specialists can evaluate your case to assess your situation at no cost to you. We will schedule qualifying cases for a Free Phone Consultation with Attorney Scott Grossman.
Originally Published: Oct 18, 2016