One gift which is commonly overlooked is the gift of forgiving a debt. An estate plan designates who will receive assets and property, but it can also designate debts which may be forgiven. Forgiving a debt is an easy gift to give. When a debt is forgiven, it is a great gift for the debtor and it saves the estate the work of collecting the debt. It can be a win/win for the beneficiary and the estate.
One Spouse May Not Forgive Entire Debt
For example, if a daughter borrowed $20,000.00 from her parents to open her business and she has been working on paying back the debt, her parents can forgive the debt. In the case of a married couple, it may only be the surviving spouse who can forgive the debt if the loan was made by the parents jointly. One spouse cannot forgive a debt owed to both spouses.
Getting Legal Help
Experienced Estate Planning Attorney Elga Goodman can help you prepare a thorough estate plan which considers all the debts, assets and liabilities in your estate. Contact us today at 973-841-5111.