In some cases, the fiduciary relation extends over a period of years, and in this event, the fiduciary has the duty of reinvesting the assets in those investments which in his jurisdictions are legal investments for trust funds. During all his service, the fiduciary is chargeable with due care and prudence in the man agement of the property.
In some cases, the executor is also the trustee, and in comparing the duties of the executor with those of the trustee it will be noted that the executor's duty is primarily the conversion of the assets into cash and its distribution to whom it may concern, while that of the trustee consists of investment and reinvest ment and the business management of his trust. The trustee will distribute the income to the life tenant, and the payment of remainder or the principal of the trust is made to those to whom it may be due and at the time when it is due, under the provisions of the will.
5. Accounting procedure for executors.—The ex ecutor should keep his records on the double entry basis because of its greater convenience. Moreover, accounts kept by this method lend themselves readily to an audit and to a more scientific method of re cording the transactions than do accounts kept ac cording to the single entry system. The executor should open such accounts in the ledger as will facilitate the preparation of the schedules which he must furnish in making his accounting to the court. This necessity further implies that the explanation of the transactions in the ledger account shall be full and complete with all details, so that the executor will be able to make his accounting from the face of the ledger without referring to any other data. The ex ecutor will also use a journal and a cash book. The former is used not only for entries that cannot be con veniently recorded in the cash book, but it may also be used as a memorandum book for the entry of any important facts which transpire during the period of his administration. The executor's ledger is opened by a journal entry debiting the inventory and credit ing the estate or corpus account; the individual assets mentioned in the inventory will each have a special account, the value for which, set up in the ledger ac count, will be the amount which was entered in the appraisal of the estate made and filed with the court When the executor has converted the assets into cash, the cash account will be debited dnd the asset account credited ; if any of the assets realize more than the appraised value, the excess over the inventory values should be credited to a special account, "in crease of corpus," which is an adjunct of the estate account, and which it will be necessary to keep be cause the fiduciary is ordinarily required .to account
not only for the assets listed in the inventory, but for increases in the value of such assets and also for any assets discovered after the original inventory was pre pared. Should any of the assets fail to realize the inventory value, the difference between the inventory value and the sales price will be debited to a special account "decrease of corpus," which is also an ad junct of the estate account, and which will form the basis of a separate schedule showing the decrease in the corpus while in the hands of the executor. The executor will pay the administration expenses charg ing them to an account, "testamentary expenses"; the debts of the testator will be charged to a special ac count, the expenses of administration will be separated those which are chargeable to principal or to corpus, and those which are charge able to income. From time to time the executor may collect income, which should be credited to a special account for income, and will form a separate schedule in his accounting. After the legal time has elapsed for the presentation of claims of creditors if the es tate is solvent, the executor may begin to pay the legatees the amount provided under the will, or if there was no will, lie will distribute to the heirs-at-law or next-of-kin, the amounts due to them, under the provisions of the statute for such cases. Payments to legatees will form a special schedule and each legatee should have a separate account in the ledger.
6. Executor's accounting.—The executor's ac counting will be ordinarily in the form of an account of charge and discharge. He will charge himself with the inventory, listed in a separate schedule; he will charge himself with the amount of increases real ized on the sale of assets over the inventory values thereof; he will charge himself for assets which were not included in the inventory, that is, assets discovered after the filing of the inventory. He will also charge himself with all income collected.