Debts and probate

[Inquisitive]

If I were to die tomorrow would my daughter have to repay her interest free loan from me or could my executor avoid that step if my daughter stood to gain more than the debt from her inheritance as specified in my will? I understand that the debt would have to be included in my estate.

[AGoodman]

The latter. You could even leave her a specific legacy of the benefit of the debt if you wanted (which, as it would be in addition, could of course leave her with more than other residuary beneficiaries).

You do not mention if you remain married to her mother but, if so, you could also leave the benefit of the debt to your wife and she could either continue to collect or waive the debt. That would avoid paying IHT on the debt.

AG

[Inquisitive]

Thanks AG. It's useful to know that debts don't have to be repaid in such circumstances. I'm a widow so there is no wife complication.