due care to avoid loss to the estate through th allowance of unfounded claims, but if there be reasonable grounds to believe in their justness, the representative should certainly not be astute to find means of defeating them.

Before making any payments, however, he should ascertain not only the probable amount of the estate, but also the extent of the estate's total indebtedness, for if, after paying some debts, he discovers the assets to be insufficient to discharge them all in full, he will be held to account for the excess paid. And so, it is provided that he may publish in the newspapers a notice addressed generally to all creditors, inviting them to present their claims to the representative under oath, on or before a date mentioned. In the meantime, and for the protection of the estate, creditors are forbidden to enforce their claims except by special permission of the court,

The publication of the notice to creditors is in reality for the protection of the estate and there is no obligation to give it at all. If the representative prefers not to do so, and distributes the estate, he will have to pay any valid claim thereafter presented. On the other hand, if the creditor fails to present his claim pursuant to the notice, he runs the risk of losing it if the representative, in ignorance of the debt, makes distribution to

others. Where, however, an executor who has personal knowledge of the existence of a claim against the estate, even though it was not presented to him when he advertised for claims, proceeds to procure a decree settling his account and directing distribution without citing the creditor, he does so at his peril and must account upon the creditor's petition.

Any kind of a debt may be submitted to the representative, if it existed against the decedent in his lifetime and survived his death. Even a claim which is not yet due may properly be presented to the executor, not for the purpose of having it decided whether it is then payable, but merely for the purpose of determining whether the claim is just. Claims arising after death are not debts, but rather are obligations of the representative personally and only to be allowed to him upon his accounting, if reasonable and

necessary.

When all the claims have been presented it becomes the duty of the executor or administrator to determine the propriety of allowing or rejecting them. He may allow a claim in full, reject it outright or compromise the liability.

If the claim is rejected, notice thereof should be sent forthwith to the creditor, who must either consent to a determination of the dispute by

the court upon the representative's accounting, or commence an action to recover it within three months from the rejection; otherwise, his claim will be barred.

The order in which debts may be paid after the funeral expenses, are (1) preferred debts under the laws of the United States and the state, (2) taxes assessed before decedent's death, (3) judgments according to their respective dates of docketing, (4) debts due on bonds, sealed instruments, notes, bills, and unliquidated demands and accounts. No other preference can be given to one debt over another of the same class, and under no circumstances may the representative give a preference to his own claim against the decedent or pay it in advance of its allowance by the court.

In paying the debts, resort must first be had to the personal estate, but if this proves insufficient, then the decedent's real estate may be applied, and special proceedings to that end are provided by the statute. But sometimes the testator in his will charges the payment of debts upon his real property; in such case the personal estate is exonerated and the executor must bring the real estate to a sale and discharge the debts out of the proceeds.

An overpaid creditor, legatee or next of kin,

whether he knows the condition of the estate or not, is obligated to return any surplus he has received over the dividend to which he was entitled when it has become judicially ascertained that the estate is not large enough to pay all the debts, legacies or shares in full, and the representative of the estate can, if he move seasonably and has done nothing to constitute a forfeiture of such right, recover any sum innocently paid such creditor in excess of his rightful dividend.

108. Payment of inheritance taxes.

career.

Most states possess statutes taxing legacies and inheritances. In New York the first act was passed in 1885 and since then it has had a checkered At the present writing (1919) it imposes a tax at a graded rate of from one to four per cent. upon transfers to husband and wife and lineal descendants, from two to five per cent. on transfers to collateral relatives, and from five to eight per cent. when the gift is to strangers in blood, according to the amount. The meaning of the statute is in many respects obscure and it is hardly worth while to explain its application to the many varying situations presented according to the decedent's place of residence, and the nature and locality of his property.

In any event, it is most important that the

representative take steps to have this tax fixed at the earliest convenient moment, for he earns a five per cent. rebate by payment within six months, and is penalized at least six per cent. for not paying it within eighteen months; whereas, if he does not pay it at all, he becomes personally liable for it.

The process of determining the amount of this tax is simple enough. Having procured from the surrogate an order designating one of the state tax appraisers to fix the value of the estate, the representative prepares and submits an affidavit setting forth in separate schedules all the real and personal property of which the decedent died possessed, together with the estimated value of each item respectively. Likewise, there is stated a list of the debts and funeral expenses, and a statement of the probable amount of the expenses of administering the estate. In this way, and by reference to the will, if any, the amount which each of the beneficiaries will receive can, with a fair degree of accuracy, be determined and the tax computed thereon. It is made the personal duty of the representative to pay the tax, in this state, to the State Comptroller, and the proportion which each legatee or next of kin owes is deducted from his or her share.

At the present time a further inheritance tax