Legal Definitions - solvendo esse

Solvendo esse is a Latin term that historically refers to the state of being financially solvent, meaning an entity or individual possesses sufficient assets or funds to meet their financial obligations as they become due.

Here are some examples illustrating this concept:

• Business Operations: A small software development company has monthly expenses including payroll, office rent, and cloud server fees. The company consistently generates revenue from client contracts and maintains a healthy cash reserve in its bank accounts. When new invoices arrive from vendors, the company can easily pay them on time.

  This company is in a state of solvendo esse because it demonstrates the immediate and ongoing financial capacity to cover all its operational costs and debts as they become due, without facing liquidity issues.

• Personal Financial Planning: An individual is considering taking out a significant personal loan for a home renovation. Before approving the loan, the bank reviews the individual's income, existing debts (like car payments or student loans), and savings. The bank determines that the individual's income is stable and sufficient to comfortably cover the new loan payments in addition to all current financial commitments.

  In this scenario, the bank's assessment confirms that the individual is solvendo esse, meaning they have the financial ability to meet the new obligation of the loan without jeopardizing their other financial responsibilities.

• Estate Administration: After a person passes away, their estate includes various assets such as bank accounts, investments, and real estate. Before any inheritance can be distributed to beneficiaries, the executor of the estate must first settle all outstanding debts of the deceased, such as medical bills, credit card balances, and funeral expenses. The executor confirms that the total value of the estate's assets exceeds the total amount of its liabilities.

  The estate is considered solvendo esse because it possesses more than enough financial resources to cover all its legal and financial obligations, allowing for the proper distribution of remaining assets.