Decline in value of asset during probate of decedent's estate?
Full Question:
Answer:
Many fiduciaries (executors, trustees, estate representatives) as a routine matter liquidate publicly-traded stocks immediately following the opening of a decedent's estate, so as to avoid the very problem you unfortunately have experienced, namely, a devaluation of the stock during the period of administration of the estate. By liquidation, I mean selling the stocks thereby converting those assets to cash, leaving the devisee ultimately to make his or her own investment decision, but avoiding the obvious devaluation during administration problem. The few exeptions to the quick-liquidation of stock practice include shares of closely-held (non-public) corporations, which are frequently restricted by Buy-Sell restrictions endorsed on the share certificates, and stocks which are specifically devised (that is, "I give my 100 shares of Coca-Cola stock to my nephew Jim.") In the instance of a specific devise of particular shares of corporate stock, many fiduciaries distribute them as quickly as possible, again to avoid giving the devisee an asset that becomes devalued during the period of administration of the estate.
As a matter of general information, I believe that experienced fiduciaries in Georgia may be willing to testify that a fiduciary who holds shares during a period of known economic devaluation such as the year 2008 was negligent in the administration of the estate.
Some general principles of which you should be aware are as follows:
Executors and Administrators Law & Legal Definition. Executors and administrators are the representatives of decedents' estates and have the responsibility of administering and settling those estates. An executor is nominated by the testator for the purpose of executing the will. Responsibilities include gathering up and protecting the assets of the estate, obtaining information in regard to all beneficiaries named in the will and any other potential heirs, collecting and arranging for payment of debts of the estate, approving or disapproving creditor's claims, making sure estate taxes are calculated, forms filed and tax payments made, and in all ways assisting the attorney for the estate. An administrator is the court-appointed representative of an intestate estate and is responsible for administering and settling the estate pursuant to the state statutory rules of descent and distribution. Responsibilities include gathering up and protecting the assets of the estate, obtaining information in regard to all beneficiaries named in the will and any other potential heirs, collecting and arranging for payment of debts of the estate, approving or disapproving creditor's claims, making sure estate taxes are calculated, forms filed and tax payments made, and in all ways assisting the attorney for the estate.
Negligence Law & Legal Definition. Every person is responsible for injury to the person or property of another, caused by his or her negligence. Negligence is the failure to use reasonable care. Negligence may consist of action or inaction. A person is negligent if he fails to act as an ordinarily prudent person would act under the circumstances. What constitutes negligence will depend on the facts of each individual case. Generally, a trier of fact needs to determine what a "reasonable" person would do or not do in the given situation.
In some instances, negligence is defined by statute, referred to as negligence per se. In such cases, negligence is determined by failure to comply with the statutory requirements. Negligence per se may also be declared when a person does or omits to do something which is so beyond reasonable behavior standards that it is negligent on its face.
Some acts are considered inherently negligent, with no requirement to prove the negligence was known or intended. For instance, when a doctor leaves a sponge inside a patient, it is inherently negligent. In appropriate cases, affirmative defenses such as contributory negligence, etc., may also be raised by a defendant.
After determining whether or not negligence exists, a trier of fact may decide whether there were any applicable defenses to negligence, such as assumption of the risk, etc.
Courts often construe general indemnity provisions as granting protection to people only from damages caused by their "passive negligence." Passive negligence is usually defined as mere failure to act, such as failing to discover a dangerous condition or to perform a duty imposed by law. "Active negligence," however, occurs when someone has personally participated in an affirmative act of negligence, known about or complied in negligent acts, or failed to perform a precise duty which he/she agreed to perform.
