Death of Participant and Outstanding Loan

Recently took over administration on a plan and discovered there is a participant that passed away in 2020 with an outstanding loan balance that was never offset.  Would you offset the loan current date and issue a 2025 Form 1099-R f to the participant's estate? 

Hopefully you have a copy of the promissory note/loan agreement, which should spell out the terms of a default.  The IRS would then be owed a 1099 for the year in which the default occurred.  As it was the participant who took the loan, I would expect their estate would be liable for the resulting tax liability for the year in which the loan defaulted, rather than it being an issue for the beneficiary.  Plan docs don't usually go into a lot of detail about how to handle such a situation, but the doc should still be reviewed just in case.