- 26 - 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,Page: Previous 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 Next
Last modified: May 25, 2011