In your will, you can leave instructions for forgiving debts after your death. When you do, your forgiveness functions much the same as giving a gift; those who were indebted to you will no longer be legally required to pay the money they owed. Keep in mind, however, that releasing people or institutions from the debts they owe you may diminish the property that your beneficiaries receive under your will.
Here are two caveats for forgiving debts in your will:
When you make your will, carefully describe any debt you wish to cancel—including the name of the person who owes it, the approximate date the debt was incurred, and the amount you wish to forgive. This information is important so that the debt can be properly identified.
Although forgiving a debt is likely to come as a pleasant surprise to those living with the expectation that they must repay it, do not use your will to explain why you are forgiving the debt. Instead, explain your reasoning in a separate letter that you keep with your will. Learn more about Writing an Explanatory Letter for your will on Nolo.com.
You can also learn now to Leave Instructions in Your Will for Paying Debts.
And if you decide to get some help from a lawyer, Nolo can help with that too. Try searching for an estate planning lawyer near you using Nolo’s Lawyer Directory.