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Series 7 practice questionhardAccount Types — Estate Accounts

An executor of an estate account contacts a registered representative to liquidate all positions and distribute cash to the beneficiaries. Which of the following must be provided before the representative can act on the instructions?

  1. ACourt-issued letters testamentary or letters of administration appointing the executor✓ Correct answer
  2. BA letter from each beneficiary approving the liquidation
  3. CA signed power of attorney from the deceased
  4. DApproval from the IRS to distribute estate assets
Explanation

Why A — Court-issued letters testamentary or letters of administration appointing the executor

Before a representative can accept instructions from an executor, the firm must receive court-issued letters testamentary (if there is a will) or letters of administration (if there is no will). These documents legally establish the executor's authority to act on behalf of the estate. A power of attorney terminates upon the death of the principal and cannot be used.

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