I appreciate that I’m not answering the question raised but, by making the gift of the house, the widow has caused her estate to be insolvent and unable to satisfy the promissory note.
From an IHT perspective, there can be no diminution in the value of the GROB, despite the fact the liabilities of the estate will now exceed the value of the assets within it.
What did the trustees intend to do with the trust fund? If to appoint it to the children then, despite the situation being irregular, the outcome will be much the same. However, where the intention is that the beneficiaries of the widow’s beneficence are not also the intended beneficiaries of the trust fund, the trustees are left in a difficult position, as the widow’s gift may need to be set aside as a gift “intended” to defeat creditors (i.e. the trustees being the “owners” of the promissory note). If the children merely made up the shortfall themselves, I believe this would be treated as a transfer of value by them, rather than reducing the value of the purported gift of the house.
Hopefully, in the situation in question, the children are intended to receive everything in any event.