Short answer. No fault-free loss is charged to the administrator, and no fault-free increase is theirs to keep. They must account for any excess when property sells above appraisal, are not responsible for a justly made sale below appraisal, and on a settled claim may charge only what they actually paid.
What the law says
No executor or administrator shall profit by the increase, or suffer loss by the decrease or destruction, without his fault, of any part of the estate. He must account for the excess when he sells any part of the estate for more than the appraisement, and if any is sold for less than the appraisement, he is not responsible for the loss, if the sale has been justly made. If he settles any claim against the estate for less than its nominal value, he is entitled to charge in his account only the amount he actually paid on the settlement.
Rule 85, Section 2 — Not to profit by increase or lose by decrease in value. Read the full provision →
No windfalls, no unfair blame
The rule cuts both ways for the administrator: they may not profit personally from an increase in the estate's value, nor be made to suffer for a decrease or destruction that happened without their fault. This keeps the administrator's personal financial interest separate from the fluctuations of the estate's own fortunes while it is under their management. The protection against loss is not unconditional, though — it applies only to a decrease or destruction that occurs without the administrator's fault, so an administrator whose own negligence or mismanagement caused property to lose value remains answerable for that loss to the estate.
Selling above or below appraisal
If property sells for more than its appraised value, the administrator must account to the estate for that excess rather than keeping it, since any gain belongs to the heirs and creditors, not to the administrator personally. If it sells for less than appraised, the administrator is not responsible for the shortfall, provided the sale was justly made, meaning conducted properly, at a fair price, and not through the administrator's own fault, negligence, or collusion with the buyer. A sale that was not justly made falls outside this protection entirely, and the administrator can be held to account for the shortfall.
Settling a claim for less than face value
Where the administrator settles a claim against the estate for less than its stated nominal value, they may charge the estate's account only the amount actually paid to settle it, not the higher nominal figure, so the estate benefits directly from any favorable settlement the administrator manages to negotiate on the estate's behalf. This prevents the administrator from pocketing the difference between what was actually paid and the claim's original face value, keeping that savings with the estate and, ultimately, with the heirs who stand to inherit it.
Related provisions
- Rule 85, Section 2 — Not to profit by increase or lose by decrease in value
- Rule 85, Section 1 — Executor or administrator chargeable with all estate and income
- Rule 85, Section 3 — When not accountable for debts due estate