Legal Memorandum: Determination of Estate Expenses

Issue: Is there case law in California or elsewhere to support an executor’s decision to account for realty costs as estate expenses?

Area of Law: Estate Planning & Probate
Keywords: Estate expenses; Testator's intention
Jurisdiction: California
Cited Cases: 11 Conn. 144; 52 A.2d 795; 82 P. 1075; 75 N.Y.S.2d 693; 148 P.2d 605; 140 S.W.2d 615; 586 A.2d 562
Cited Statutes: 96 C.J.S. Wills § 1102 (1957); 34 C.J.S. Executors and Administrators § 249 (1998), 286
Date: 08/01/2000

There is no fixed or universal rule as to when a devisee granted use and possession of real property is to be charged rent or expenses connected with maintenance of the property; rather, the issue is determined by interpretation of the will in accordance with the testator’s intention.  96 C.J.S. Wills § 1102 (1957).  One treatise states the general rule that the executor may not charge to the estate any expenses incurred for the benefit of a specific legatee or distributee, but should set off such expenses against the legatee’s or distributee’s shares.  34 C.J.S. Executors and Administrators § 249 (1998). 

There is some support for the argument that when the will or codicil grants a devisee use and possession of property but is silent as to how realty costs are to be covered, such costs are covered by the estate, not taken from the devisee’s share.   For example, in In re Estate of Sharp, 95 Cal. Rptr. 816, 830 (Ct. App. 1971), the court held that absent direction from the testator, real property and personal property taxes are expenses of administration of the codicil chargeable to the estate.  Likewise, costs of insuring property during administration are charged against the estate "being an item of expense incident to preserving the property during the course of administration."  Id., 95 Cal. Rptr. at 830 n.8 (quoting Enscoe v. Fletcher, 82 P. 1075 (Cal. Ct. App. 1905), overruled in part on other grounds by Tabata v. Murane, 148 P.2d […]

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