Q: How is money paid back to an estate?
Prior to my father's death I had borrowed money from him. He stated in his will this must be paid back. My question is do I pay back the estate and then the proceeds would be divided equally between siblings or does my amount owed come out of my portion of the inheritance? As you can see it would be too my benefit to pay back the estate and then distribute the money equally.
A: You net the same amount either way. Do the math, or use a pie chart, or whatever aid you need. Technically you owe the money to the estate, unless the will says otherwise. The debt is an asset of the estate.
A: You should follow what the will says to do. Generally, though, the money you owe to your father is an asset of the estate and its value should be included when determining the total that is to be divided among the beneficiaries. When your share is calculated, the debt could be allocated to your share, and you would receive a lesser amount of other assets. You should consider consulting with an experienced trusts and estates attorney who can review the document and give you specific guidance.
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