Legal Question in Wills and Trusts in New Jersey

Re: Posthumous discontinuance of mortgages and loans made by the deceased

To determine legal recourse the executors will have to have an attorney review the promissory notes evidencing the loans and the Last Will and Testament of your great grandfather. Also, to be considered by everyone is the possibility of income tax consequences both adverse and beneficial to the people involved. Questions may be raised in the original context of the loans issuance: competence of the lender or undue influence of the executor whose children benefitted. All the beneficiaries benefit from the income stream and given today's rates may be best adivsed to retain the mortgages. These mortgages do not have to hold up the distribution of the estate. I suggest the executors need to consult an attorney to determine their best alternatives and go about the finalization of the Estate administration process. If you or they wish to learn more, please call me at (973) 731-5110

Re: Posthumous discontinuance of mortgages and loans made by the deceased

I have had several estates with this question. The Notes and Mortgages, unless forgiven during the lifetime of your grandfather or under his Will, are assets of his estate to be included in his estate calculation. Depending upon the language of the Will, their value is distributable proportionately to all persons listed in the Will. Depending upon who shares in the estate, the mortgages/loans can be given to the persons issuing them, in lieu of other estate assets. For example, someone owes $20,000, but is to receive $30,000. They can be given their mortgage and $10,000 as their distribution. If there loan/mortgage is more than their share, they would get nothing and owe the balance to the estate. I would need to see the Will and the loan documents to more properly and precisely respond. Be aware, there could be estate, inheritance and income tax consequences of these transactions.