Legal Question in Wills and Trusts in New York
debts due estate
if a son owes a parent 100k, with a note overdue for a year, what happens upon death of parent. are their penalties in addition to the interest. how does the estate collect. can the debt be offset against the inheritance if it is larger than the debt.?????
2 Answers from Attorneys
Re: debts due estate
I agree with Warren, but suggest you cover this in your Will. Your Will could reference the debt and its terms and say that any unpaid balance, including interest and penalties, if any, is not forgiven, is to be repaid and that your Executor is authorized to enforce collection. If the son is to participate in your estate, what he owes is to be deducted from his share of the estate, with any shortfall collected to go to the other heirs. If the debt total exceeds what will be inherited, son only gets the excess. If you need more information, or help with language, contact me directly.
Re: debts due estate
In the event that a debt is owed a parent, the estate stands in the parents place and has the right to collect the debt according to the terms of the note held by the decedent. In your case, the money not paid back should be used to offset any funds that you would collect under the will or through intestacy.
If you owe more than you are entitled to, then you will have to pay the difference to the estate.
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