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Where Taxpayers and Advisers Meet

Debts and probate

Inquisitive
Posts:7
Joined:Wed Aug 06, 2008 3:07 pm
Debts and probate

Postby Inquisitive » Mon Mar 06, 2017 11:55 am

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
Posts:1419
Joined:Fri May 16, 2014 3:47 pm

Re: Debts and probate

Postby AGoodman » Mon Mar 06, 2017 3:59 pm

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
Posts:7
Joined:Wed Aug 06, 2008 3:07 pm

Re: Debts and probate

Postby Inquisitive » Tue Mar 07, 2017 3:46 pm

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.


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