To think my step-sis should pay the money back?

[Tainbri]

My Step sister borrowed a large sum of money from my step mum (her mother) and my dad which she and her DH used as a deposit for their property. The property as far as I know is in their joint names. There was no formal loan agreement put in place because it was "family" but she has (up until her mum died) been paying interest on the money. Anyway her mum died last year and now my dad wants the money paid back. Step sis won't even talk about it and says it was her mum's money so now it's hers. Obviously morally I think she should pay it back, but legally do you think my dad has a case given there's no written agreement? He doesn't want to waste more money on solicitors if he doesn't stand a chance.

Oh and her mum left no will at all

Her mum lent the money and is now no longer with us, there is no agreement and she obviously had the money to give her so can't see you have a leg to stand on.

Difficult if there was no written agreement in place I’d have thought but does he have proof of where the money was transferred from & to?

And mortgage companies always ask to see proof of where loans have come from for money laundering, was that done? He may be able to get a copy of that paperwork

Debts aren't voided by a death, nor do they have to be written down to be enforceable. So she could owe to the money to her mother's estate (and therefore to your dad as her sole beneficiary)

However the "interest" thing - as far as I know, individuals aren't allowed to charge interest, so that money might be seen as paying off party of the debt, not interest?

What was the situation with you dad & step-mum's house? Did they buy together, was it your step mum's or did she sell a property to move in with your dad?

Why was she paying her own Mum interest?

Did she borrow it from both of her parents? If so the surviving one has a right to ask for it back but with nothing in writing she could argue it was a gift
Is your dad prepared to push it and totally alienate her?
Either way you should keep out of it

why do you think she should morally pay it back? Genuine question.

If the money came from both her Mum and her Step Dad, and now her Mum has (fairly recently) passed away and suddenly your Dad wants the money back it may be very difficult for her to Magic up that kind of money but she may also feel that it should form her inheritance if your Dad is unlikely to leave half his estate to her (her mothers half of their joint estate).

Need more info on the dynamics here as it could be that she's feeling like she's going to get cut out.

Were they married? Where did the money come from, ie; from joint account or equity release. Is there any evidence of regular repayments?

I believe that she will owe her mother's estate following her death so your dad could have a claim. I don't know if he could demand the full repayment, I would imagine she could repay as per the original terms? Even if it was a verbal agreement.

I think it was for the deposit, so a lump sum rather than part of the mortgage application. I am not sure that the mortgage company would have got involved with it?

We were given some money by my parents as a help with mortgage deposit. The mortgage company wanted something signing by them to say that it was a gift not a loan (so if it all went pear shaped and they repossessed the house my parents wouldn't have a claim). They wouldn't let us use money that was loaned as a deposit... I expect it was probably the same in this case, so if no official agreement then it wills be hard for your dad to enforce.

Your Dd can just write it off but deduct that sum from any inheritance she would be due to get from her mums/his eventual estate. Better than all the conflict

Also a previous poster mentioned mortgage companies needing proof of funds, this may not be accurate across the board but in my experience the mortgage company won't allow your deposit to be a loan, I've had to provide a letter from my parents stating the money they gave me for a deposit is a gift not a loan. So if you go down that route it may enforce your step sisters point.

What did her mother contribute to the relationship either in terms of existing money, earnings, support for your father etc? Without a will her daughter will inherit nothing from her mother and I am guessing she won't be named in your father's will, if he died interstate she would not inherit anything. If it was a six month marriage to which the mother brought no money then fair enough but in a longer marriage maybe morally she does have some ground. Legal proceedings might cost quite a lot of stress and money.

I think YABU. Is she to inherit nothing from her mum. Your dad is tight.

Intestate not interstate!

How much was it?

I agree my mortgage company requires all money to be a "gift" not a loan, as otherwise if the borrower stopped paying the mortgage there would be more than one person with a claim on the property.

Also if your step sister inherited nothing else from her mother than I can see that morally she could be seen to have a "right" to this money. After all if it all goes to your Dad he could remarry and leave it all to them. In some countries off-spring always have a right to a percentage of the estate.

Yes they were married. My understanding was they were happy to lend her the money (as they had it in the bank) but she would pay them the interest the bank was paying. That's where it all gets vague. Dad says it was the understanding she would pay it back but there is nothing in writing. The only paper trail is feom my dad referring to the "loan" and asking for her to make instalments to pay it back, rather than just interest and asking for a proper agreement. She hasn't replied to any emails and had stopped paying anything when her mum died.

Well i think if he is to have any chance of getting it back he will need legal advice.if he van prove payment of large sum of money then receipt of interest thats going to help him. He could try small claim s depending on sum.

Shes probably decided she deservrs her ingeritance now rather than rely on your dad in future.

Seems she is happy to have family rift. Shame.

I think your Dad is being awful if I'm honest.

It sounds like she will get nothing from her Mum other than this, leave her alone, let her grieve.

Did your dad and step mum own any property or have any other assets? I wonder if your step sis is worried that your dad won't include her in his will so she thinks keeping this money is her way of getting her inheritance?

If they did have assets your dad could take whatever is owed off her share of the estate in his will. If not I don't think there's anything he can do if nothing was signed about the money.

Assume her mum and your dad were married? Unfortunate that she didn't make a will , but maybe ssis feels that is her rightful legacy if it was not originally joint money. Would your ddad be prepared to include her in his will if he inherited everything by default?

Was she already making repayments to her Mum before her Mum died?

If so, I'd say that the repayments acknowledged that it was a loan; and therefore repayment "to the estate" should continue. However, full settlement might not be possible depending on her finances, so it might just have to continue as regular repayments at the same rate/frequency as before.

I can see both sides of the story and for clarity, dad is elderly and frail and is in need of quite a bit of help. It's NOT a case of me wanting the money when he dies and depriving my step sister! He had a minor stroke recently and I think before too long may need residential care rather than continuing to live in his own home, so obviously finances are important for him.