§ 2212 Accounting for profit and loss

This rule is about how executors, administrators, and other estate managers (called fiduciaries) handle gains and losses in an estate. If the estate's assets go up in value while the fiduciary is managing them, the fiduciary does not get to keep that extra money for themselves. Any increase in value belongs to the estate, not to the person managing it.

The same idea applies in reverse. If the estate loses value through no fault of the fiduciary, the fiduciary does not have to personally pay for that loss. As long as the fiduciary did their job properly and the loss wasn't caused by their mistake or misconduct, they won't be held responsible for money the estate lost.

When it's time to review the fiduciary's financial records (called settling their accounts), these gains and losses get accounted for correctly. Any increase gets added to what the fiduciary must account for, and any honest loss gets subtracted. This keeps things fair. The fiduciary can't profit personally from good luck, but they also aren't punished for bad luck they didn't cause.