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Matter of Estate of Higgins

Decided: April 28, 1960.

IN THE MATTER OF THE ESTATE OF JOHN R. HIGGINS, DECEASED


Fulop, J.c.c.

Fulop

THE ISSUE.

This is an application for allowances to a testamentary trustee and to his attorney on intermediate accounting. The legal question squarely raised is whether the trustee's allowance of commissions on corpus must be based on inventory value without regard to unrealized enhancement in market value. On behalf of the trustee it is contended that market value at the time when the compensation is fixed should be taken into consideration. On behalf of the objecting remainderman, it is contended that only inventory value may be considered since the assets which have increased in value have not been sold and the gain has not been realized.

STATEMENT OF FACTS.

The instant trust has been in existence since May 1, 1943. It provides life income to the testator's widow, with remainder over. The widow is now 82 years of age. Her life expectancy is 5.83 years.

The original inventory value of the corpus was $124,951.74. The present adjusted inventory value, after taking into consideration realized gains and losses, is $137,931.32. The market value of the corpus as of January 26, 1960, the date to which the accounting runs, is $858,624.23, according to the account.

There have been four prior intermediate accountings. Corpus commissions allowed have totalled $4,296.11 or approximately 3 1/2% of average inventory value. Two trustees served until July 1, 1948, when one of them died. Since that date, one trustee served until his death on January 26, 1960, to which date the account now runs. The total period of administration was 16 years and 10 months.

The will permitted the trustees, in their discretion, to retain shares of stock held by decedent. These included shares of stock of the Babcock and Wilcox Company. The

trustees have retained these shares. The increase in market value of these shares has resulted in the enhanced value of corpus above referred to.

The period for which commissions are sought is about four and a half years. In view of the death of the last trustee, the allowance of commissions at this time added to commissions previously allowed will be the total compensation for this trustee's entire period of service.

THE APPLICABLE LAW.

Although the rule appears to be otherwise in other states (90 C.J.S. Trusts ยง 400 b),

"It is the law of this State that in the absence of an express provision in the trust clearly indicating the contrary, a trustee entitled to commissions on corpus may claim an appropriate portion at the time of an intermediate accounting and is not required to wait until the termination of the ...


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