Q. Our father passed away, leaving an inheritance for me and my older brother — his only heirs. Part of the inheritance was cash we found in his safety deposit box in a bank, and there was money in his bank account as well.
He also left behind a debt of $10,000.
We heard that whether we repay the loan from the cash or from the bank account could make a difference in terms of how much we each inherit. Is that true? If so, what is the halachah?
A. There is, indeed, a difference whether the debt is paid off from the cash or the bank account.
A bechor inherits pi shnayim (a double portion) of money that is muchzak (in his father’s possession at the time of his passing), but not of ra’ui, money that was not in his possession when he died, such as outstanding loans that he extended to others (Choshen Mishpat 278:3,7).
Most poskim rule that money deposited in a bank account is considered ra’ui (see BHI issue #339), because it is “on loan” to the bank. Although the money is insured, so it is guaranteed that he will get it at some point, it is still considered ra’ui, since the money he deposited is lent to the bank and no money is physically sitting in his account.
The cash, on the other hand, is muchzak.
As the bechor, your brother will benefit from repaying the loan from the money from the bank account, which will leave the sum in the safety deposit box intact for you to split, because he will receive a double portion of that cash. You would benefit from repaying it from the cash, which would leave the bank account, which you split evenly, intact.
Now, since a bechor receives a double portion of the inheritance, if the father owes money at the time of his passing, the bechor is required to pay a double portion of the debt from any money that he inherits at the double rate (ibid. 278:10).
So, what happens with the debt in your case?
The poskim deliberate whether it is paid from ra’ui or muchzak:
1. Some rule that when there are assets that are muchzak, the assets that are ra’ui are not collateral for the loan
(Shu”t Pnei Yehoshua, Choshen Mishpat 1; Shu”t Darchei Noam 43; see Shu”t Divrei Renanah 49).
In your case, this means that the debt should be paid from the cash in the safety deposit box.
2. A second approach is based on the halachah that when a person dies with debts, the lowest-level assets he owned (ziburis) are the first to be used to pay the debt
(see Choshen Mishpat 108:18). Ra’ui is considered ziburis as compared to muchzak, so the debt is paid from the ra’ui (Perach Shoshan, Choshen Mishpat 3:1, with proof from Shu”t Maharshach 1:22; see Shu”t Koach Shor 23 and Divrei Geonim 12:4).
In your case, this means that the loan should be repaid from the bank account.
3. A third set of poskim rule that the debt is paid from each type of asset in proportion to its representative percentage of the estate.
For example, if the total estate value is $20,000, with $5,000 ra’ui and $15,000 muchzak, then 25% of the debt is paid from the ra’ui and 75% from the muchzak.
There are two approaches offered for this ruling. Some poskim explain that the estate alone is collateral for any outstanding debt, not the heirs personally (see Ketzos Hachoshen 66:23), but all of the assets are collateral, even the ra’ui (see Choshen Mishpat 107:1). Therefore, a portion of debt must be paid from each type of asset (Noda B’Yehudah, Mahadurah Kamma, Choshen Mishpat 34 and Mahadura Tinyana 53, cited in Pischei Teshuvah 278:5).
Other poskim explain that when a deceased person leaves behind both a debt and an inheritance, the heirs are personally liable to pay off the loan (Tumim 66:43), up to the amount inherited (Choshen Mishpat 107:1). Since the bechor inherits a larger percentage of the assets, he has greater liability, so he must pay according to the percentage he receives (see Taz, Even Ha’ezer 113:10; Shu”t Chasam Sofer, Choshen Mishpat 149).
The poskim lean toward this last approach, but there are other factors that beis din will likely take into consideration before they issue a psak on this she’eilah.
