O. D. McKee and Estate of Anna Ruth McKee, Deceased, R. Ellsworth McKee and Jack C. McKee, Co-Executors - Page 26

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          Hibernia Bank, within 18 months after the decedent's death,                 
          virtually all specific bequests and all Federal and State death             
          taxes had been paid.  The decedent's estate was composed mainly             
          of a large mansion and shares of Hibernia Bank stock.  Hibernia             
          Bank served as the executor of the estate.  Rather than                     
          distribute the remaining assets, Hibernia Bank attempted to sell            
          the mansion as an accommodation to the beneficiaries of the                 
          estate, who preferred to receive distributions of cash instead of           
          undivided interests in the property.  The estate was held open              
          for an additional 7 years until the mansion eventually was sold.            
          There were, apparently, no affairs to be wound up or reasons for            
          the estate to remain open, other than the sale of the mansion.              
          In the interim, the executor bank spent approximately $60,000               
          each year to maintain the mansion and borrowed a total of                   
          $775,000 (approximately 80 percent of which was lent by Hibernia            
          Bank), rather than selling the publicly traded Hibernia stock to            
          raise the funds for this purpose.                                           
               In Hibernia Bank, the court ruled that the interest on these           
          loans did not represent expenses actually and necessarily                   
          incurred in the administration of the estate.  The personal                 
          representative could have distributed undivided interests in the            
          mansion to the residuary beneficiaries of the estate, rather then           
          keeping the estate open until the mansion was sold.  The court              
          determined that the estate administration had been prolonged,               






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Last modified: May 25, 2011