Difference between Executors, Administrators, and Trustees.

An executor is a person named and appointed in a will and charged with seeing to the payment of the debts of the deceased and the collection and distribution of his personal, and, if the deceased dies after January 1, 1898, his real property ; and, generally speaking, with carrying out the directions of the will. That done, his duties are at an end, and he ceases to be an executor.

The duties of an administrator are precisely the same, the difference between them being only with respect to the nature of the office itself. An administrator is appointed by the Court, in the event of the deceased dying intestate, or of the executors named in the will dying, or refusing or becoming unable to act as such. The appointment is made by granting " letters of administration " to the person entitled to administer the estate of the deceased.

Trustees.-The duties and office of a trustee are quite different from those of an executor or administrator. A trustee is a person who has the legal possession and ownership of property intended for the benefit of other persons, generally with full powers of management over it. The position is often one of great responsibility, and should not be lightly undertaken by anybody, indeed, should be avoided whenever possible. In settlements and wills dealing with large estates it is usual for the family solicitor to be one of the trustees, and it is always best to have a lawyer for a trustee. The offices of executor and trustee are often combined in one person, and in that case the executor's duties come to an end at the moment the trustee's begin. Suppose a man makes his will, giving the annual income of his property to his wife for life, and after her death to his children who attain twenty-one in equal shares, and appoints A his executor and trustee. After the testator's death A's duty is to bury him, prove the will, get in all his property and pay out of it the funeral expenses and debts and any legacies given by the will. What is then left is called the " residue," and at this point A ceases to be an executor and becomes a trustee. As such his duty now is to invest the residue in securities directed by the will, or authorised by law, receive the income, and pay it to the widow quarterly during her life, and after her death to sell the securities in which the trust funds are invested and distribute the proceeds equally among the children, payment of his or her share being made as each child attains twenty-one. When each has received his share the trust comes to an end. If the will had required the residue to be immediately distributed, there would have been no trust at all, strictly speaking, or B might have been made trustee of the will, and then A would have had to hand over the residue to him for investment. The administration of an estate ought not to last more than a year, or a year and a half, and is frequently completed in a few months, but a trust may last a great many years ; though, except in the case of a charitable trust, it cannot be made a perpetuity.

Executors and Administrators.

An executor is a person to whom the execution of another man's will after his death is committed. Without a will there can be no executor. He must either be expressly appointed as such by name in the will, or if he is not made executor in so many words, it must be made clear by the will that the testator intended that he should perform the duties of an executor, i.e., get in the property and pay the debts and legacies. Any person of sound mind may be an executor, including married women and minors. Two executors are usually named, although one is sufficient, and it is very rare to find more than four appointed.

If a man is appointed executor in a will, and does not wish to act, he can " renounce," but he must do so promptly. He must renounce as soon as possible after the testator's death and before he has done anything to suggest that he accepts the office of executor. Any slight act of intermeddling with the property will be sufficient to fix a man with the character of executor, and render it too late for him to renounce. It is usual for a testator, before he appoints an executor to his will, to get his consent to act, but even if such consent has been given, he is not prevented from changing his mind and renouncing after the testator's death.

Devolution of the Office.-If an executor dies, and there are other surviving executors, then these become the sole executors. One surviving executor will become the sole executor. If, however, the sole or surviving executor should die, leaving a will, his executors will become the executors of the original testator, unless the first executor has not yet proved the will. In the latter case, and also when the sole executor dies intestate, a special administrator of the original testator's estate will be appointed by the Court, for the administrator of an executor does not become the administrator of the testator.

Probate.-The title of an executor is not complete until he has proved the will, which should be done soon after the death of the deceased. It cannot be done until seven days afterwards, but it ought to be done within a month or six weeks, if possible. Probate may be granted either in common form, which is

the usual practice, or in solemn form, now very rarely used. The will should be taken to Somerset House, accompanied by proof of the testator's death. The, original will is kept by the authorities, and an official copy on parchment, known as " Probate " of the will, is given to the executor, as evidence of its contents, and is universally accepted as such.

Letters of Administration.-If the deceased has died intestate, or has left a will without naming an executor who survives him, or all the executors have renounced, letters of administration must be taken out to his estate. Where there is a will, the administration is said to be " with the will annexed."

Who may Administer.-A husband has a paramount right to take out letters of administration to the estate of his deceased wife, and no one else can do so. In the case of a man dying intestate, his widow has a right to take out administration to his estate, but the Court has a discretionary power to grant it to the next-of-kin, or one of them, or the widow and one of them jointly instead. If an unmarried person dies intestate, administration will be granted to the next-of-kin, or rather, to one of them, in the Court's discretion. It will be granted, as a rule, to the nearest relative who has the greatest interest in the property, assuming there are several equally nearly related. Among several with equal claims, a business man or lawyer would be preferred. If a man dies intestate, leaving no next-of-kin-the case of a bastard who leaves no wife or issue, then the Crown is entitled to administer his property. If there is no other person willing to take out administration to an intestate's property, it may be granted to a creditor of the deceased, not being one of the next-of-kin. The largest creditor, or the one nominated by the majority of the creditors, will be preferred.

Administration " cum testamento annexo, " or " with the will annexed," will be granted where there is a will in which no executors are appointed, or where the appointment fails, from death, refusal or incapacity to act, or residence abroad of the executors appointed. The Court usually, but not as a matter of course, grants administration to the residuary legatee, or one of them, if there are more than one, failing him to the next-of-kin, failing which it is granted to a legatee or creditor. When a sole or surviving executor dies, without leaving a will or an executor, and when an administrator dies, it is necessary to appoint a new administrator-" de bonis non," as it is called, the full phrase being "de bonis non administratis," meaning " of the property left unadministered." There are other kinds of special administrators appointed for special purposes, which need not be dealt with here.

The grant of probate or administration may be revoked on the ground of fraud or mistake, or for some other good reason.

Interest taken by Executors and Administrators in the Property of the Deceased.- The whole of the deceased's personal property, including leasehold estates, and all estates vested in him as sole trustee or sole mortgagee, and now as to all persons dying on or since January 1, 1898, the whole of the real estate as well, except copyholds and customary freeholds, vests in the executors or administrators. They also succeed to all the deceased's rights of action, which do not perish with him, e.g., actions on contracts ; and are bound by all his contracts, except contracts involving personal service. They may also bring actions, if necessary, for injuries to his real property, even if he died before 1898. The change effected by the Land Transfer Act, 1897, vesting the real estate of persons dying after that year in their personal representatives, does not alter the law as regards the persons entitled to it in the event of an intestacy, but it now becomes the executor's duty, after administration, to convey the land to the heir, whereas formerly it descended to him directly. The distinction which formerly existed in this respect between ordinary personal property and certain articles, such as heirlooms and title-deeds, which descended with the land to the heir, is thus abolished.

Powers of Executors and Administrators.

After the grant of probate or letters of administration, the powers of executors and administrators are exactly the same, and any statement herein referring to the powers, duties, and liabilities of executors applies equally to administrators.

An executor has absolute power to sell, mortgage, or otherwise dispose of the assets of his testator, and they cannot be followed by the testator's creditors. Before 1898 he had merely a power of sale over the real estate, and then only, except by express direction, for the payment of debts, but now, as we have seen, there is no distinction in his powers between the real and personal estate of persons dying after 1897. The receipt of an executor is a complete discharge to the person obtaining it. If there are two or more executors, they are considered in law as but one person, and one of them can by himself exercise all the powers which they could jointly exercise. But one executor cannot buy from another, or from himself, any of the deceased's property ; and it is the strict rule of the law that no executor is allowed to make any profit for himself out of the estate, except what he may take as a beneficiary under the will, or in the case of an administrator, as next-of-kin, or heir-at-law of the intestate.

The same applies to trustees, for whom, however, some remuneration is generally stipulated for by the will. Solicitors who are executors, administrators, or trustees are not allowed to charge the estate with profit costs for, professional work done in connection therewith, unless they are specially empowered to do so by the will. A clause is frequently inserted in wills enabling them to charge. Under special circumstances, too, an order may be made by the Court allowing remuneration out of the estate for professional work in connection with its administration.

The Duties of Executors and Administrators.

The first duty of an executor is to have the deceased buried decently, and in a manner in accordance with his means and station in life. His next duty is to prove the will, and pay the death duties, i.e., probate duty in the case of deaths before August, 1894, and estate duty in the case of deaths since then. He must then make an inventory of all the personal property, and ascertain who are all the deceased's debtors and creditors, and the sums which they owe and are owed respectively. It may be necessary to advertise for creditors; if so, this should be done without delay. He must then get in all the deceased's outstanding debts, and convert into money all his assets, unless there is any direction in the will to the contrary, or any of them are specifically bequeathed thereby, and out of the proceeds make the following payments in full, in the order below stated, and so far as the assets are sufficient to meet such payments

1. Funeral expenses.
2. Testamentary expenses, i.e., the solicitor's charges and costs of proving the will or taking out administration (including probate or estate duty):
3. Debts.
4. Legacies.

What is left after these payments have been made, is called the " residue," and this he must hand over to the residuary legatees, who may either be entitled to it themselves, or as trustees for others. Very often the executors are themselves trustees, and in this event they will retain the residue and invest it, ceasing at that moment to be executors, and becoming trustees.

It is the duty of executors to take any legal proceedings that may be necessary for the protection of the testator's estate, or, if the meaning of his will or any passage in it is doubtful or the subject of dispute, to take proper steps to have it construed by a decision of the Court.

Death Duties.-Legacy Duty, which is imposed on personal property (except leaseholds) passing under a will or intestacy, varies from 1 to 6 per cent. in the case of relations, according to the nearness of the relationship. Lineal ancestors and descendants pay only 1 per cent., while strangers in blood pay as much as 10 per cent. Succession Ditty is payable at the same rates as legacy duty, according to the nearness of the relationship of the predecessor and successor, on all real and leasehold property, and on certain kinds of personal property on which legacy duty is not paid. Estates under �100 are exempt from both duties. The new Estate Duty which has superseded Probate Duty in the case of deaths since August, 1894, is payable by the executor on all property, real or personal, passing on the death, at rates which vary according to the value of the estate. No duty is charged on estates under �100, 1 per cent. on those under �500, and 2 per cent. on those under �1,000, and so on, until the executor of a deceased millionaire has to pay 8 per cent. estate duty, which in the case of an estate worth exactly a million would come to �80,000. The 1 per cent. Legacy and Succession Duties are remitted on all property subject to Estate Duty.

Payment of Debts.-The primary duty and object of the appointment of executors is to see to the payment of the deceased's debts. Funeral and testamentary expenses (including probate and estate duty), as we have seen, rank before all debts, and must be paid in priority to them. Among debts, however, some kinds rank before and must be paid in preference to others, if the assets are not sufficient to pay them all in full. The following is, roughly speaking, the order of priority in the payment of debts :

1. Debts due to the Crown by record or specialty (i.e., Crown judgments, recognisances, and bonds).
2. Judgments (not due to the Crown).
3. Recognisances (not due to the Crown).
4. Solicitor's costs.x
5. Simple contract debts due to the Crown (e.g., income tax).
6. All other debts.

Costs of an administration action in Chancery, however, rank before any debts, but not before funeral expenses.

If the estate of the deceased is insolvent, and is being administered in bankruptcy, a somewhat different order of priority will prevail, under which rates and taxes, and arrears of wages or salary due to servants or clerks, up to a certain amount, rank before other debts.

Executor's Right of Preference and Retainer. -Executors and administrators may prefer one creditor to another even though the assets may not be sufficient to pay all in full, unless and until judgment has been given in an action to administer the estate of the deceased.

Retainer.-If the executor or administrator happens to be a creditor of the deceased, he is allowed to retain the amount of his debt out of the assets available for payment of debts before satisfying the claims of any other creditors of equal degree with himself. One reason given for this right is that he cannot as a creditor sue himself as executor for the debt. The right of retainer may be asserted at any time before judgment in an action for administration. If the executor pays a debt of the deceased out of his own pocket, he may retain an equal amount in respect of it. In the case of persons dying after January 1 1898, the executor's right of retainer is extended so as to cover the real estate of the deceased, as that becomes "legal assets" for the payment of debts. The personal estate, however, will still remain the primary fund for the payment of debts, in the absence of any direction in the will to the contrary.

Payment of Legacies.-After all debts have been paid, legacies, including the succession or legacy duties upon them, must next be paid. If the assets are not sufficient to pay all the legacies in full, they abate or are reduced proportionately, but specific legacies - i.e., gifts of particular articles, or stock or shares - rank before general pecuniary legacies. Legacies are paid as a rule a year after the testator's death. Annuities rank as general pecuniary legacies, and to meet one a sum of money is usually appropriated and invested, unless the annuity is charged upon land.

Distribution of the Residue.-Last of all the residue, or what is left after funeral expenses, debts, and legacies have all been paid, must be distributed by the executors among the persons entitled, the death duties being retained and paid out of it first. If there should be no residuary bequest in the will, the residue will go in the same manner as if the testator had died intestate, except that the Intestates Estates Act, 189o, to be referred to later, does not apply.

Distribution of an Intestate's Estate by his Administrators.-Where a person dies intestate, that is, without leaving any will, his residuary personal estate will go to his next of kin, according to the Statutes of Distribution, and his residuary real estate will, subject to the assent of his administrators if he dies after January 1, 1898, pass to his heir-at-law. If the deceased be a man leaving a wife and children, the residuary personal estate will go thus - one-third to the wife, two-thirds to the children equally. If he leaves a wife but no children or grandchildren, she will take half, the other half going to the next-of-kin, father and mother coming nearest, and brothers and sisters next, but besides this the widow is entitled, where there are no issue, to the first �500 out of the residue, in addition to her other share of the estate, or the whole if it is under �500. The right to this �500 arises under the Intestates Estates Act, 1890. If a man dies without leaving a wife surviving him, the whole of his personal property will go to his next-of-kin, children of course ranking first.

The undisposed-of residue of a woman dying without leaving a husband surviving her, or unmarried, goes, as in the case of a man, to her next-of-kin. In the case of a married woman dying intestate, or not effectually disposing of her residuary estate by her will, her husband practically takes the whole of it.

It should be remembered that " children " means legitimate children only in the eye of the law, and therefore does not include the offspring of the union of a man with his deceased wife's sister, or of a woman with her deceased husband's brother, who will take nothing unless provided for by will, and named therein. Even then they will have to pay 10 per cent. Legacy and Succession Duty, as strangers in blood.

Residuary legatees or next-of-kin may be made liable to refund part or the whole of what they have received to meet the claims of unpaid creditors. But a mortgagee of real property cannot make any claim against the personal estate, on his security turning out deficient, if he has knowingly consented to its distribution.

Liabilities of Executors and Administrators.

1. On the Acts of the Deceased. - Executors and administrators are liable to the extent of the assets that come into their hands, upon all the deceased's debts, covenants, and contracts, whether express or implied, and they may also be liable to actions for damages for negligence, and for any other wrongs committed by the deceased in his lifetime by which his estate has benefited, and any other man's property has been injured. In the case of contracts only, there is an important exception to this rule. Executors are not liable upon contracts the performance of which required the personal services or skill of the deceased, as, for example, a contract to write a book or deliver lectures, such contracts being terminated by his death.

Executors may be liable on a joint contract of the deceased with another person.

Companies.- The executors of a deceased shareholder are liable to pay all calls and other payments which are or may become due to a company under the contract by which he took shares in it, but of course in an action to enforce payment of calls they can use any defence which would have been open to the deceased.

In every case where an executor is said to be liable for the acts, defaults, or obligations of the deceased, he is only liable in his representative character, and to the extent of the assets. An executor is never personally liable except upon his own acts or defaults.

2. On their own Acts and Defaults.- The liability of an executor or administrator on his own acts and defaults in connection with the administration of the estate is more serious, and is generally a personal liability.

If an executor promises to pay creditors what the testator owed them, this only means that he will pay so far as there are sufficient assets, and does not make him personally liable unless he has made a special promise to answer the debt out of his own pocket, which promise must be in writing signed by him, and must be supported by valuable consideration. In the following cases executors will generally be held personally liable, even though acting in their representative character-viz., if they borrow money ; if they draw, accept, or endorse bills of exchange or promissory notes ; if they order goods to be delivered or work to be done; if they use and occupy premises after the death of the deceased. If an executor assents to a legacy, he will be personally liable to pay it if the assets are insufficient, on the ground that he has admitted that the assets are sufficient. If he continues to carry on a business which belonged to the deceased, even in pursuance of directions in the will, he will become personally liable to the creditors, and may even be made bankrupt. Except for the purpose of winding it up, an executor must not continue to carry on his testator's business, unless he is specially authorised to do so by the will. To do otherwise is a breach of trust, for which not only is he personally liable, but any beneficial interest he may have in the property may be impounded to meet the liability.

Executors and administrators will be liable for any loss caused by their negligence or "wilful default" in failing to get in the estate, or allowing money to remain in the hands of a co-executor. Generally a year is allowed from the testator's or intestate's death in which to get in all the estate and pay the debts. Co-executors are not all bound to join in receipts, the receipt of one alone being sufficient; but if the other (assuming there are two) joins for the sake of conformity, and the money afterwards comes under the control of both, both will be liable for any loss which may be incurred. If one executor knowingly permits his co-executor to obtain and keep entire control of the assets, and they are lost, he will be answerable for the loss, on the ground of negligence, as well as the one who actually lost them.

The tendency of recent decisions and legislation is rather in the direction of limiting than of extending executors' liability, and the rule now is, in such cases, that an executor will not be liable if he has acted prudently and according to the ordinary course of business, nor will he be liable for a loss caused by robbery from, or the insolvency of, an agent necessarily and properly employed by him, such as a solicitor, banker, or stockbroker. When he has acted honestly and reasonably the Court has power to relieve him from personal liability for a breach of trust.

Costs.-Executors who bring or defend legal proceedings properly will be allowed their costs out of the estate as between solicitor and client, including all charges and expenses properly incurred by them, so that they may lose nothing thereby. It is very seldom indeed that an executor is deprived of his costs, and then only for gross negligence or misconduct.

Admission of Assets.-Where an executor or administrator admits unequivocally that there are sufficient assets to pay any legacy or other claim, he will be personally liable to meet that claim. Admission of assets to one legatee is, generally speaking, an admission to all. Payment of interest regularly on a legacy is deemed to be an admission of assets to the amount of the legacy. Payment of a legacy may be, but is not necessarily, an admission of assets to pay all the deceased's debts.

Accounts.-Executors and administrators must account to their beneficiaries, but they need only account for what they have actually received, unless they have been dilatory or negligent in getting in the estate, when they may, by special order, be made personally liable not only for what they have received, but for what, but for their "wilful default," they ought to have received. Such accounts are said to be " accounts on the footing of wilful default." If executors leave balances uninvested they will be charged interest on them ; if they use money in business they will have to pay compound interest on it.

Protection of Executors and Administrators.

An executor or administrator, when sued by creditors of the deceased, may set up the Statutes of Limitation as a defence, if the period of limitation (six years for simple contract debts) has elapsed. An acknowledgment of the debt must, in order to take the case out of the statute, be equivalent to a promise to pay it. An acknowledgment made by one of two or more executors, although it is binding on the testator's estate, will not bind the others personally.

Executors or administrators who advertise for creditors of the deceased, and require claims to be put in within a certain reasonable time, may after that time pay the debts and distribute the assets among the persons entitled, without being liable to persons of whose claims they have had up to that time no notice. Where there arises any question of doubt or difficulty about the construction of the will or the administration of the estate, it is the duty of the executor, before paying away any of the assets to beneficiaries, and whether or not there is a dispute among them, to take out an " originating summons " in the Chancery Division of the High Court. This is a short procedure by which such questions may be decided by the judge sitting in Chambers without the expense and trouble of a regular action for administration. In complex or difficult cases the summons may have to be adjourned into open court, and thus the point will take much longer to decide. Unless he has acted negligently or improperly, the executor will get his costs of such proceedings between solicitor and client, including all out-of-pocket expenses. He will always be protected in anything he does in pursuance of an order of the Court.

When the estate is being finally wound up, and the legatees and beneficiaries have been paid, the executor should ask them to join in a deed releasing him from any further liability in connection with the estate. They are not obliged to give such a release, but it is usual and proper to do so, and it is especially desirable where the assets, after payment of the debts, have not been sufficient to pay all the legacies in full, and the legatees have consequently had to accept less all round.

As the liability of executors is joint and several (that is, each is liable for the whole of a debt owed jointly by them), if one executor has been made liable to pay the whole of a debt, he is entitled to an indemnity and contribution from his co-executor executor.

Executors de son tort.- Where a man takes upon himself the duties and office of an executor, without having been properly so constituted, and acts as such, except under the authority or directions of the real executor, he is known as "executor de son tort " or " executor of his own wrong-doing." He is liable, to the extent of the assets which have come into his hands, to be sued either by the rightful executors or by creditors or legatees for an account of his dealings, or, by the first-named, for administration of the estate. He may protect himself before the action is brought by properly accounting to the executors. His position, shortly stated, is that he gets all the liabilities and troubles attached to an executorship without any of the compensating advantages, such, for example, as the executor's right of retainer of his own debt.

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