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estate’s representative did not seek from a probate or other
court prior approval for the loans, relying instead on the
decedent’s incorporation of Tenn. Code Ann. sec. 35-50-110 into
his will. We feel that it is useful to consider in some detail
the Tennessee Supreme Court's statements in Cleveland Bank and
Trust Co.:
In order to fund the cash requirements that were
necessary to pay the decedent's debts, administration
expenses, and death taxes * * *, the executor continued
decedent’s real estate operations even though this
entailed periodic borrowings to pay the interest, debts
and taxes. To further alleviate the estate’s cash flow
problems, the executor paid the death tax in
installments plus interest. All of the executor’s
actions had been expressly authorized by the
incorporation of T.C.A. � 35-50-110 * * * into the
testator’s will. [Id. at 201.]
The court in Cleveland Bank and Trust Co. noted that Tenn. Code
Ann. sec. 67-8-315(a) provides that in determining the net estate
subject to taxes, expenses of administration are to be taken into
account. The court further stated:
Although T.C.A. � 67-8-315(a) does not define
allowable "expense of administration," the general rule
is that an executor is entitled to credit his accounts
for expenses necessarily and properly incurred in good
faith, in transacting with reasonable care and
diligence the business of the estate, upon proof of the
particular items of expense claimed. * * *
In accord with the general rule, there is ample
Tennessee authority that supports the proposition that
a court will credit an executor for interest incurred
during administration. T.C.A. � 35-50-110(8) * * *,
for example, specifically authorizes an executor to
borrow money and pay interest when the decedent
incorporates this provision into his will, as the
testator did in this case.
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