Q: As the Personal Representative of my late wife's Will I would like to forgive a mortgage/note held by her son's company
The mortgage/note was between my late wife and her son's company. It was originally between her ex-husband's company and her as part of a divorce settlement. Her son inherited the company upon his father's death. Can I bequeath the balance without her son incurring any tax liability? The amount owed is about 200K.
I am the sole beneficiary of my late wife's Will. We purposely designed our Wills to avoid probate.
I'd appreciate whatever advice can be given. Thank you.
A:
You seem to be confused about a few things. If you are named as a personal representative in her will, it doesn't mean a thing until you file a probate petition with the court. Thus, if you thought you would avoid probate by executing wills, you were mistaken.
If your late wife held a note secured by a mortgage, and if you forgive that note, it would be a gift by you (not a bequest by your late wife); it would be subject to the federal death tax, however it may be within the death tax exclusion amount.
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