Money - Family. Inheritance: Are debts between heirs and the deceased cancelled out?

At the time of succession, an assessment is made of the deceased's assets to be passed on to the heirs and any legatees. An assessment is also made of debts.

Those that existed prior to death constitute a liability deductible from the assets of the estate; some, arising subsequently, such as medical and funeral expenses, can also be deducted.

But what happens to the debts incurred between the deceased and his heirs?

If the deceased had incurred a debt to one or more of the heirs, this debt does not disappear from the estate. The heir(s) then also become creditors of the estate.

The repayment of the debt is thus provided for from the estate assets before the division of property. However, the debt must be recognized by an authentic deed or a registered private deed.

Otherwise, the tax authorities may consider it fictitious, and it cannot be reported to the estate.

The case may arise where the heir is alone. Then, the debt is extinguished since one cannot be both creditor and debtor of oneself.

If, as an heir, you owed the deceased a debt, you are no longer required to repay it. However, the notary will deduct the amount from your share of the inheritance as part of the estate settlement.

If the amount is greater than your share, you will have to pay the difference to the estate. Note that in principle, and unless expressly stated in a loan agreement, the amount you borrowed is not revalued.

In other words, an amount borrowed even 20 years ago will have to be repaid in the same amount, without taking inflation into account.