My father passed away last year and his will states that his estate, which is not very big, is to be divided equally among his five children. While going through the house and cleaning up, we came across a ledger that my dad kept detailing money that he had lent to some (but not all) of his children. The will does not mention the ledger at all, but now my brother who is executor says we are taking it into account and he will now divide the sale of the house subtracting monies that he said is owed. Can he do this?
Pamela in Utah
You don’t say how much money you owe your father and what kind of difference this makes to the final sum of money you will inherit from the sale of your father’s estate. Do that math first, then re-read my answer. I say this because you will have to ask yourself whether it’s worth jeopardizing your relationship with your brother or spending in time and money in court fighting over this issue. Most lawyers who are worth their salt will help you avoid court in such family matters.
Estates and wills are mine fields and bring out either the best or the worst in us. If you have a controlling or willful sibling, expect him/her to be more so during the execution of a will. Why? Emotions run high and, whether we like to admit it or not, old scores are often settled during these fraught times. I have a friend who says, “If it’s hysterical it’s historical.” That is, if some issue seems like a really big deal now and upsets us, it’s probably because it’s related to something in early childhood.
Read:I give my son money and his wife gives it to her church
Can your brother force you to pay this IOU? I’m not a lawyer, but I put this question to Barbara Wright, an estate-planning attorney in Palo Alto, Calif. She believes your brother is acting above and beyond his legal duties as executor. “The job of the executor is to faithfully carry out the decedent’s instructions in his will,” she says. “If the will doesn’t mention the ledger and if the father didn’t have his children sign notes for the money he loaned them, then the loans shouldn’t be deducted from the children’s shares.”
However, if the children did sign notes, the executor would include the loans as part of the assets in the estate and ask each child to repay the loan or have it deducted from the child’s share of the estate. “When we have clients who want loans or gifts made during the lifetime treated as advances against a child’s share of the estate, then the will or trust document specifically includes instructions to take the loans (or gifts) during lifetime into account and adjust the children’s shares accordingly.” A ledger is not a signed note.
So you have three doors available, which involve balancing familial relationships, legal precedents and a possible judicial process. No. 1: You borrowed money from your father and never paid it back; you have an opportunity to do so posthumously. No. 2: Tell your brother that he is on shaky legal ground. Or No. 3: If your brother believes he has a legal or moral right to pursue the money, hash it out in court. My take: Choose No. 1. You don’t want to see what’s behind Door No. 3. Even if you did win in court (and that is not a given) you will still lose in ways that you have yet to imagine.
Also see:My father excluded my siblings from his will
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View more information: https://www.marketwatch.com/story/my-brother-wants-me-to-repay-a-loan-to-my-late-fathers-estate-2015-08-31