What investment duties does an executor have for estate funds in Ontario?

In Ontario, an executor who holds estate assets for a period of time before distribution must manage investments in accordance with the Trustee Act's prudent investor standard. This requires the executor to exercise the care, skill, and caution that a prudent investor would exercise in managing the investments of others.

The prudent investor standard means the executor should not leave large cash amounts earning nothing when the administration period is prolonged, but should also avoid speculative investments that put estate assets at risk. The goal is to preserve the estate's value and generate reasonable returns during the administration period, consistent with the estate's expected distribution timeline.

The executor must consider the estate's specific needs: if assets will be distributed soon, low-risk, liquid investments are appropriate. If the estate holds assets in trust for a longer period (for example, for a minor beneficiary), a more considered investment approach may be needed. Executors who breach their investment duties can be held personally liable for resulting losses.