SUPREME COURT DOCKET NO. 90-483
JUNE TERM, 1991
In re Estate of Perry } APPEALED FROM:
} Probate Court
} Westminster District
} DOCKET NO. 90-102
In the above entitled cause the Clerk will enter:
Appellant, an attorney and the ancillary administrator of the Perry
estate, appeals from a decree of distribution in which the probate court
ordered him to pay the heirs of the estate $1,000 in imputed interest
because of his failure for more than fifteen months to place approximately
$22,000 of estate funds into an interest-bearing account for the benefit of
the heirs. Appellant argues that the court erred because (1) he had no duty
to place estate funds in an interest-bearing account absent a request by the
parties or an order by the court to do so, and (2) he had no reason to
believe that there would be significant delays in distribution of the funds.
We conclude that the probate court did not abuse its discretion, given the
circumstances of this case.
An administrator may be charged with interest on estate funds received
by him when he unreasonably or unnecessarily allows them to remain idle.
Riley v. McInlear's Estate, 61 Vt. 254, 264, 17 A. 729, 733 (1889); Slade v.
Slade, 10 Vt. 192, 195 (1838). Whether an administrator will be charged
with interest on such funds depends on the particular facts and circum-
stances of each case, Riley, 61 Vt. at 263-64, 17 A. at 733; Slade, 10 Vt.
at 195, and lies within the discretion of the trial court. See, e.g., In re
Estate of Kugler, 117 Wis. 2d 314, 322, 344 N.W.2d 160, 164-65 (1984). An
administrator's duty to manage an estate includes a duty to reasonably
invest funds that will not be distributed within a reasonably short time and
that will not be needed to pay estate claims or administrative costs. See,
e.g., In re D'Espinay-Durtal's Will, 4 A.D.2d 141, 142, 163 N.Y.S.2d 309,
310-311 (1957). Thus, an administrator is chargeable with interest, even
when he or she has not profited from the handling of estate funds, where the
funds are substantial and can neither be immediately applied to extinguish
claims against the estate nor distributed among the heirs within a reason-
ably short time. See Slade, 10 Vt. at 195; Tabler v. Weller, 342 S.E.2d 234, 237 (W. Va. 1986); Kugler, 117 Wis. 2d at 322-23, 344 N.W.2d at 164.
The issue here is whether it was within the probate court's discretion
to impute interest to the administrator under the instant circumstances. We
give little weight to appellant's argument that the probate court and the
heirs were both aware of the fact that at a certain point the funds were not
in an interest-bearing account. The administrator, not the probate court or
the heirs, is the fiduciary that has the duty to manage estate funds. As
for appellant's argument that he expected to distribute the funds within a
short time but could not do so due to the domiciliary administrator's
failure to provide a required affidavit stating that the estate debts had
been paid, we cannot conclude that this circumstance excuses appellant as a
matter of law or that the probate court abused its discretion. The key
inquiry is whether under the circumstances the administrator exercised the
judgment and care that persons of discretion and intelligence exercise in
the management of their own affairs. Kugler, 117 Wis. 2d at 322, 344 N.W.2d
at 164. Here, the length of time involved (over fifteen months) and the
amount of money (over $22,000) held by appellant militates against him. We
are unable to conclude on the basis of the record before us that the probate
court erred or abused its discretion.
BY THE COURT:
Ernest W. Gibson III, Associate Justice
[ ] Publish John A. Dooley, Associate Justice
[ ] Do Not Publish
James L. Morse, Associate Justice