the year. They are selected by the bank or the trust company because of their knowledge and previous training. So many and such a variety of cases have passed through their hands, many of them extremely complicated, that whatever the situation that confronts them, it will be handled in the manner bringing the best results to the estate and therefore to the beneficiaries.

§ 485. The Manifold Duties of an Executor

When a person of large or comparatively large means dies, the administration of his estate necessarily involves a great deal of detail work. It takes much time for the executor to work out these details, as anyone at all familiar with administration matters must realize. Some of these matters have already been given in the earlier chapters of this work, but for the sake of emphasis we shall repeat some that have to receive attention.

The personal representative (executor or administrator), having qualified, must then collect all the assets of the estate. These may, of course, be in many different forms and in many different places. Usually, one finds several savings bank accounts, a number of investments in stocks and bonds of corporations, very likely a number of bonds and mortgages on real property, and frequently an interest in a going business.

The personal representative must also prepare to pay all the debts of the decedent. Whether or not he is required to advertise for claims against the decedent, it is better practice to do so both as a matter of protection to himself and because by so doing he can settle the estate within a shorter period -in New York within six months-than he could if he did not advertise. He must also receive and record all claims against the estate. Properly none of these, except possibly the undertaker's bill, should be paid until all of the known claims have been filed and the time of filing has expired, so that there can

be no claim of a preference in favor of one creditor over another. Careful records should be kept of both the receipt of principal and income of the estate and of claims against the

estate.

§ 486. Necessity of Keeping Accurate Records 1

Any person acting as the personal representative of a decedent owes it to the beneficiaries of the estate and to the friend who has appointed him in this capacity to keep accurate and honest records of all his transactions. Not only does he owe this to the beneficiary and to the decedent, but he should also do so for his own protection and in order that he may at the proper time be able to give an accurate and true account of his proceedings.

In spite of this, however, it is not an uncommon thing for an individual acting as personal representative to keep no records other than a check-book. His only records of the claims against the estate are the bills themselves, which he does not enter in any book of account. Such an individual usually leaves all of his duties to be carried out by the attorney for the estate and acts more or less as an automaton in signing checks and documents when and as requested by the attorney, taking it for granted that the attorney will always advise him correctly. It is probably true that the attorney would advise him correctly, but that does not relieve the personal representative from the duty of knowing that what he is doing is what should be done. The attorney should be called upon for legal work only, that is, to advise as regards the legal points that come up in connection with the administration, and to draw up the various papers, including the petitions and accounts of proceedings, the decrees, and such other legal documents as there may be. The attorney, of course, should be called upon to prepare any needed releases or satisfactions of mortgages.

1 See Chapter LXV, "Purpose and Theory of Estate Accounting."

§ 487. Care Required for Manifold Details

It is the duty of the personal representative to attend to all of the administrative details. An individual acting in a fiduciary capacity usually cannot give the attention he should to his duties for the reason that he has the business of making his own living and the care of his own personal and business affairs, which are naturally likely to come first. In selecting an executor it is usually preferable to take a person who has proved his ability by attaining success in his own business, but the reason for his success, in ninety-nine cases out of a hundred, would be the careful attention which he had always given to his affairs, and if he is to continue to manage them successfully he will be compelled to give them this same unremitting attention in the future. It is obvious that this means that the matter of his fiduciary duties will receive only secondary attention.

The importance of these duties is pointed out for the purpose of emphasizing that they require and should have careful attention and should be the primary concern of the execu

When a bank or a trust company is appointed in a fiduciary capacity, it gives the matter of handling the affairs of the estate or trust all the attention that it may require. Acting in the various fiduciary capacities is the chief and only business of the department of the bank which handles this sort of work, the trust department. That department has nothing to demand its attention other than the affairs of the estates in which it is acting as fiduciary. Therefore those affairs receive the primary attention to which they are entitled. This alone is sufficient reason for preferring a corporate fiduciary.

$488. The Question of Expense

There are many considerations which one must have in mind when he is about to make his will or to prepare any instrument creating a trust. Among these various considera

tions, a very important one from the standpoint of the beneficiary is that of expense.

The question that then arises is whether it is more expensive to appoint A or B and C (individuals) as one's executors and trustees than to appoint a bank or a trust company. Naturally there are fees and expenses to be paid in any case, but in which case will the fees and expenses be least?

In all states there are statutory provisions providing for the fees of fiduciaries. In some states the fees are definitely fixed, as in New York. In others the matter is in the discretion of the surrogate's or the probate court within certain limitations, as in New Jersey. Whatever the statute may provide, it is the same for a corporate fiduciary (bank or trust company) as it is for an individual. So that as to fees as such there is no choice.

As to the fees of the lawyers who must be retained to probate the will and to advise the fiduciary, and who must attend to the many legal matters involved in the administration of an estate, there is likely to be some difference. Where an individual acts, he is almost entirely dependent upon the attorney for instruction in his duties. As has already been said, the individual in the great majority of cases does little or nothing himself but leaves it all to the attorney, even to the keeping of the proper records. This is shown in almost every instance where a corporate fiduciary retains an attorney whose previous experience has been with the individual. Such an attorney enters upon his duties as if he himself were the fiduciary and in some cases seems to feel aggrieved because the corporate fiduciary expects really to be the executor or trustee and to exercise all official functions.

If the executor utilizes the attorney in this way, the estate for which he is acting pays for it. The attorney cannot and should not be asked to devote his time to matters which are really no part of his work unless he is to be paid for it. Since

the fiduciary is getting his fees for this very work, the estate is practically paying double. In fact it is being charged not on the basis of the rather small fees allowed to the executor, but on the basis of the fees that the attorney believes to be a fair return for his professional services.

Where a bank or a trust company acts as fiduciary, it takes care of all these details. It obtains the surrogate's certificates, comptroller's waivers, and other documents required in the liquidation of the assets of an estate. It prepares the statements for the attorneys to make up the transfer or inheritance tax affidavits, the federal estate tax affidavits, and the intermediary or final judicial account of proceedings. It takes care of the distribution of the proceeds of the estate, taking the proper receipts and releases which have been prepared by the attorneys.

Moreover, where a large financial institution acts in a fiduciary capacity, it naturally can and does exert a control over the attorneys, especially if the attorneys happen to be the regular counsel for the bank or the trust company, as is usually the case. In a proper case the fee can be adjusted. We do not mean that it is the practice of banks or trust companies to cut the fees of the attorneys, but the attorneys sometimes may overestimate the ability of the estate to pay, in which case it is proper to call their attention to the matter. The individual, on the other hand, would probably be unable to accomplish much along these lines. It is fair then to say that from the standpoint of the legal expense the bank or the trust company would be likely to be the less expensive fiduciary.

§ 489. Individual Administration of Large Estates

Let us go a step further. Consider, if you will, a large estate involving several trusts and in which the administration is complicated. Let us suppose that the trusts are likely to last for many years. Assume that among the assets there are