Debt to estate

P

Pinoy adventure

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Hi all

Can I ask who is responsible for calling in or collecting a debt owed too an estate ?
And is the any interest payable on a debt too an estate ?


The story behind the question is a mother loaned a child €20,000 too buy a car.
Child was repayment €50 per week at the start but this stopped early in the year.
The parent passed so repayment has ceased.
Child acknowledges debt owed but not in a financial position too repay loan.

Any advise
Thanks
 
The named executor is the person responsible for collecting all debts owed to the estate and [paying] all debts owed BY the estate.

If the child named is a beneficiary of the estate, then with agreement, deduct the debt from their portion of the estate.
 
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Mathepac - would interest be chargeable as its dragging on so long ?
If the borrower borrowed the money today from bank or credit union there would be interest due.
If no interest is due doesn’t that put one side at a disadvantage??
 
DannyBoyD said:
If the original loan was interest free you can't claim interest now.

Has the borrower agreed to repay the principal?
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Danny as far I’m aware no interest was charged.
No - they said they have no money too make repayments.( I’m guessing they will properly have too address the issue once there inheritance comes true or before then).
 
Pinoy adventure said:
I’m guessing they will properly have too address the issue once there inheritance comes true or before then).
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mathepac said:
If the child named is a beneficiary of the estate, then with agreement, deduct the debt from their portion of the estate.
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Surely as mathepac says above the time to address the issue is before the inheritance is issued rather than issuing money and asking for repayment afterwards?
 
The loan is an asset of the estate.

So let’s say the estate appears to worth €40k and there are three kids.

With a €20k loan to one of the kids, the estate is worth €60k.

Assuming it’s an equal split, that’s €20k for Child A, €20k for Child B, and zero for Child C, with Child C’s loan written-off.
 
Using Gordon's example above, if one of the children paid funeral costs of 6k then the split would be 18k for Child A, 18k for Child B and 24K for Child C who'd paid the funeral expenses.

The debt is acknowledged by the debtor and is payable to the estate. It is the executor's legal obligation to collect it.
 
noproblem said:
Ok, but it just struck me that if someone is left x in a will then the executor is obliged to give it to them. The debt is something else entirely I would have thought.
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No, debts come first. A notorious example is where there are debts to Revenue and/or Dept of Social Protection and the entitlements of the beneficiaries can be considerably devalued by the time those are discharged.
 
If it's possible/legal the debt should be notionally settled by deducting the debt from the Debtor's portion of the Deceased's estate before the estate is distributed thereby avoiding Capital Aquisitions Tax (if any would be due).
 
Horatio said:
If it's possible/legal the debt should be notionally settled by deducting the debt from the Debtor's portion of the Deceased's estate before the estate is distributed thereby avoiding Capital Aquisitions Tax (if any would be due).
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But that wouldn’t avoid Capital Acquisitions Tax. Forgiving a debt is effectively the same as cutting someone a cheque.
 
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