If a deceased made a loan before their death, how is it handled by their estate?
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If a deceased made a loan before their death, how is it handled by their estate?
There are 5 children who inherited their parents estate to be distributed equally upon their death and 1 child has an outstanding loan of $35,000 to the parents. Is this handled separately or can each of the other 4 children receive $35,000 each before the 5th receives 20% of the remainder?
Asked on June 4, 2013 under Estate Planning, Oregon
Answers:
Nathan Wagner / Law Office of Nathan Wagner
Answered 10 years ago | Contributor
The loan could be handled separately, but the more common way is to have the 4 others receive $35,000 while the 5th child receives cancellation of the $35,000 debt. Then the remaining estate assets are divided equally among all 5 heirs.
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