Self-Cancelling Installment Note

Self-Cancelling Installment Note

In general, when you sell something during your lifetime (for example, a sale to an Intentionally Defective Grantor Trust) and you die, the remaining amounts owed to you under the promissory note are subject to estate taxes because the promissory note is an asset you own at death.

If the promissory note is designed as a Self-Canceling Installment Note (SCIN), then the amounts you are owed under the SCIN when you die are cancelled at your death with no estate tax consequences. There are limitations on the use of a SCIN, but it can be a very good technique in the right situation.

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