A recent Pennsylvania case involved an insolvent estate
(this means that the assets of an estate are insufficient to
pay its debts, taxes, and other miscellaneous expenses),
there was a promissory note owed to the descendant by
his son. The question arises, can a direction in the will to
forgive this debt be valid since it would benefit the
decedent’s heir. The Court ruled, in this case, that the
promissory note was forgiven, but, it was only forgiven
to the extent that the proceeds were not needed to pay
the estate’s debts and other expenses.
Lesson: Be sure to discuss any family debt with your
attorney and accountant when doing your financial
and estate planning.
Lauritsen v. Wallace, 67 So. 3d 285
(Fla. Dist. Ct. App. 2011).