Should an unpaid family loan be deducted from my brother's inheritance?

[Triflemuncher]

Hi everyone.

Mum passed away semi- unexpectedly. A horrible sad time for us all.

my brother and I have started the process of unpicking her finances. About a year before mum died she lent my brother 10k. At the time of her death there was about £8k left to pay. There was no written loan agreement which I can understand to some degree.

my view is the 8k remaining debt needs to be deducted from brothers share of mums estate. He disagrees and thinks that it was an Informal arrangement between him and mum with no terms and conditions, or any link to her estate.

Where do we stand on this? Is there anything I can do or is this £8k just written off?

So decision made…. I’m not going to pursue it however I think it’s the final nail in the coffin for our relationship

The debt was to your mum and is now a debt to the estate which should be repaid before it is divided up.

We had similar .... long story but after my FIL's estate was divided up we finished up with the task of sorting his belongings. Whilst going through his computer I found details of a large loan he had made to my OH's sister to renovate their gites. We knew nothing of this, and she did not declare it or offer to have her share reduced accordingly.

There is more to this story that makes it even more underhand ... hmmm

The debt was to your mum and is now a debt to the estate which should be repaid before it is divided up.

We had similar .... long story but after my FIL's estate was divided up we finished up with the task of sorting his belongings. Whilst going through his computer I found details of a large loan he had made to my OH's sister to renovate their gites. We knew nothing of this, and she did not declare it or offer to have her share reduced accordingly.

There is more to this story that makes it even more underhand ... hmmm

Sorry it posted twice.

Of course it should be deducted

I wouldn’t - because writing off a loan to one child would disadvantage the other child/ren.

Exactly x

Right so sounds like one heck of an awful back story

This. It's their problem, not yours.

Personally he should take £8k less as he has had the money. My sister is still going on about a £5k loan my parents made to her about 20 years ago now. My mother has just died and we are sorting things out and she’s still insisting that the money is deducted from her share.

in this case your brother should be taking less. If he won’t then is I would be walking away from the relationship

edited to add that actually he would need to declare the loan anyway as it’s over the £3k limit so may well end up having to pay some form of tax on it! I would show the £8k as a debt to the estate on the probate form

God wills really bring out the worst in people dont they? What’s done is done and fighting over this will be expensive and not helpful to the grieving process. Be glad of the time you had with your Mum, respect her wishes and just divide the estate in half ( or whatever the will says if there is one).

Over £8k when you are receiving £150k ? I think thats very sad.

But I speak as someone who got left hardly anything to show for my parents years of hard work thanks to equity release schemes.

Similar situation here but less money owed. The solicitor we used for probate ensured that it was taken from the share of the debtor.
This would be the correct thing for the executors to do.

He’s a grabby bastard and I’d feel very differently about my brother if he behaved like this.

Your mum did a kind thing for him when he was presumably in need and he behaves like this. Not a nice man!

Oh that's a shame as you could have easily got it back.

£4k

Family member has had a loan from an elderly person in the family. It was made clear to them that in the event of their death , it will come off their portion of the inheritance

I would think any person of integrity would think the same . Your brother obviously lacks it .

He is being a dick because in reality he gets £4k of the £8k back so it is £4k and he is prepared to ruin his relationship with you over that.

I would say it depends on whether getting a fair share outweighs any ongoing relationship with your brother. This could potentially destroy your relationship, and I'd be asking what my mum would have wanted.

Yeah I'm quite surprised by this attitude too. My parents lent my brother 200k to buy a house and as a direct result of him failing to pay it back in time I have had to lend my parents 35k to cover paying off their mortgage. It's all well documented and the idea is that it's all settled off in the will.

I am assuming they'll not have enough in their estate to make this fair by the way and I am OK/ have made peace with that. But if there is enough I don't see why I should just write it all off.

My brother and I are on good terms and I don't think he'd disagree with me.

Why would you assume that? They own their property outright now

I am assuming the house will be sold to pay for their care at some point.

We had a very similar scenario (I owed money to the deceased)

The solicitors wouldn’t split our inheritance any other way than equal shares as per the will (the loan was unofficial and not documented in the will) so it was left to me to give a third each of the remaining loan amount to the other two beneficiaries, which I happily did.

If it’s not documented then I don’t think that you’d be able to demand that your brother pay you (but if he is a decent person then he should IMO!)

You don’t need to do that.

Rent it out to pay for the fees if needed
and you will never need to sell their home for at home care

Imo he owes the estate £8k. Then you split the estate so he effectively gets some back.

Debts and credits to the estate are claimed/paid before splitting.

I bet he would be arguing differently if it was you who owed £8k.

Fwiw, my parent has loaned my sibling loads of money. She's been very explicit that when she dies that is factored in so we both are ultimately treated equally.