Donald M. Thompson - Wills, Trusts, and Estate Planning


Self-Cancelling Installment Note (SCIN)

These are promissory notes given in payment for a purchase of assets. The notes, by their own terms, become void or cancelled, upon some event, usually the death of the seller of the assets. When the death occurs the value of such a note is no longer in the seller's estate, no more payments need be made, and the property sold passes to the buyer (usually a child) free of tax. Obviously such a note must have a higher face value or higher interest rate or both, compared to a note which is not self-cancelling, to avoid a gift to the buyer at the time of the sale. How much higher or how much more are questions of value which are hard to define with this technique.

|| Back to List of Topics ||
See My Probate Web Site ||
See My Business Law Web Site || See My Securities Arbitration Web Site ||

Donald M. Thompson * 55 W. Monroe #3950; Chicago, IL 60603
Ph: 312-782-0844 * Fax: 312-201-1436 * Email: