You trust contains “default” formula language that mandates a reduction in the share of an indebted beneficiary of a direct prorata amount equal to his/her indebtedness to you at the time of your decease.  In other words, that beneficiary’s debt value will be paid from his/her share to the other beneficiaries, prorata, from the value of the reduction imposed on the indebted beneficiary's share.  (For the purposes of the reduction formula, the value of a previous gift can also be deemed, if expressly prescribed, to be an indebtedness attributed to the giftee/beneficiary.) In all such cases, a beneficiary’s indebtedness can be verified by a “note of indebtedness” and kept on record in your Client Console’s PostScript Page.

CONVERSELY, this App’s “Beneficiary Debt Forgiveness” clause simply and entirely negates the debt-allocation-formula language included in your trust by default.  That means that if a child/beneficiary owes you money, at the time of your decease, such indebtedness shall not be recognized for the purposes of determining percentage-share allocations from your Trust Estate when you have installed this language in your trust.  The debt-forgiveness clause can also be applied to just one of two or more indebted beneficiaries, if that is desired, by specifying which beneficiary’s indebtedness is to be forgiven and not reduced by the debt-allocation formula.