Quora Answer: Should I Invest My Mother’s Funds in the Beneficiary Account, When She is 85 Years Old?

The following is my answer to a Quora question: “I have a beneficiary account for my mother, who is 85 years old.  The bank keeps pushing me to invest it.  What is your advice?”

That really depends on how much there is in that account.  If, for example, the amount is modest, there is no real reason to invest it, since that would likely be funds needed for final expenses, the administration of the estate, and allocated to potential beneficiaries.  Investing that money might not be wise, because in the event of her passing, those funds need to be pulled back from the various investments, and it may incur significant losses, due to the mismatch in the investment horizon.

If, on the other hand, the account has significant funds, more than what would be a reasonable amount to cover final expenses and probate costs, with enough for a reasonable largesse for all beneficiaries, you may consider it, but again, it would be prudent to invest only in short term investments such as money market, or short-term bonds.  None of the investments should be high risk.