Evening star., 1926-05-09

Washington Loan John n. LARNER,
and Trust Co., in
discussing Duties and Obligations of
FiduciarieS" In Trust Companies
Magazine.
In the magazine Mr.. Larner makes
a plea for greater care in preserving
estates and notes how easy it is for
heavy losses to result from misman-
agement. He insists that machinery
required for acquiring. preserving
and managing wealth is so compli-
Gated that u specialist is needed. The
best specialist, in his opinion, Is the
trust department Of bank. lie
adds:
THE settlement Of an estate by an
executor or administrator and the
management of an estate by q trus-
tee, involve many important clements
which are not, in many jurisdictions.
clearly defined by statutory law or
rules OF court. Estates do not take
care of themselves to a greater de-
gree or extent than an individuals y
private business Is capable of prog.
ressing satisfactorily without his per-
sonal attention and guidance.
IAN estate in the hands OF n
fiduciary is a sacred trust, since 1t
is often the only resource OF widows.
orphans and others who are the nat
ural objects of the solicitude and
bounty of the creators Of estates.
LeGacies, devises and bequests from
testator to those he loved. very
often represent assets accumulated by
years of ceaseless toll and denial on
the part of o creator of an estate.
Prudence Is required in protecting 1t,
skill in making It profitable, discre-
ton in guiding 1t through changing
conditions, experience in meeting the
responsibilities and solving the prob
lens which almost constantly present
themselves.
Sincerity alone Is not sufficient.
1t Is more important to be right
than to be sincere. a man may be
entirely sincere and woefully wrong;
and. when he is, his sincerity helps
him very little. The most that sin
cerity can do is to mitigate our moral
or legal responsibility for our blum
ders; it does not undo the effects OF
the blunders. However. his sincerity
alone does not restore the estate. Too
many persons count sincerity the su-
preme virtue.
First Duty Of Trustee.
"The first duty of q trustee" Mr..
Larner continues. sis to place the
trust property in a state or security.
Having taken possession OF the
moneys and other assets Of an estate
it becomes the duty of the trustee
TO invest these as directed by the
will. If it be possible so TO DO.
"There have been evolved In mod.
ern life many ways of employing cap
ital: hence, the assets of an estate,
while they may not be large in money
vaIue present problems III success
fully handling the estate which could
not have arisen in the preceding gen
GRAFTON. For instance, the presence
of shares Of stock In an estate In
course of administration requires
careful handling from the standpoint
of inheritance taxation, and the par
ticular stocks of an estate may De
subject to fluctuations in market
price, which may or may not nave
something to do with the intrinsic
value of the stock itself; the corpora
ton issuing the stock may be pass
ing through a reorganization just at
the time the executor or admins
traitor takes over the stock, requiring
careful consideration of the desirable
ity Of selling or falling i'll line with
the reorganization policies.
"In the case of a trustee. capital
stocks of corporation may be
turned over to him as part or the
original assets Of the estate, and, as
stocks are not investments favored
for the assets of a trust estate, the
trustee must watch them carefully,
for the reason that, vale it may not
he desirable to hold them indefinitely,
it would be equally undesirable TO
simply unload them on the market
at an unpropitious time, thus selling
under their real value.
Other Problems Presented.
"Other forms of assets present like
problems. Real estate may form
part of the assets OF a trust estate
thus presenting an entirely new set
of problems of handling which II may
not be possible to solve In the Ire
time of the individual acting as
trustee.
Even with marked care, skill ana
attention by an individual to a trust
reposed in him, illness or some other
form OF disability may strike down
the individual--may be struck down
bv death while in the height OF his
poWers. The court will never let
trust fail for want Of trustee, but
such appointments cannot be maze
instantly. The ideal fiduciary,' Mr.:
Larner asserts, should be proof
against sickness, insanity and otherr
forms of disability and death, ana
should also possess wide funo Oh
business knowledge gained through
experience"
Mr.. Larner states that the corpo-
rate fiduciary represents the nearest
realization of the ideal; adding that
decision by any corporate f1duciary
upon any point Is the result OF the
mature reflection Of trained and eX-
perienced minds; it has the machin-
cry to handle details with precision,
promptness and accuracy, ana IL
never forgets or neglects any DUTY
because it is too busy.
But even corporate f1duciary
cannot be a compendium or all tne
virtues and the possessor OF all the
requirements necessary to further the
interests of an estate or trust. Tnere
is one essential and important eie-
ment-the lawyer. No sensible lay
man would perform q surgical opera
ton upon himself, and the corporate
fiduciary. or individual layman, who
goes to law without a lawyer, or
delves fearlessly into legal proposl'
tions connected with the administra'
ton Of an estate or trust without the
advice. counsel and guidance OF a
lawyer, is storing UP trouble Tor the
fiduciary and the estate.
"A layman appointed as executor or
trustee, may never have had any ex-
perience acting in such an important
capacity; at the best, it is probable
that he has previously served only a
few times. The trust company. on
the other hand, makes that a part OF
its regular business; it has officers
competent to act in conjunction with
the counselor. who may have served
the testator during his lifetime. The
trust company specializing In the
handling Of trust estates is familiar
with the different things that are re.
auired to be dones how and when 70
do them"