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Debt owed to estate - what happens?

5 replies

AQuestionOfWills · 01/03/2022 21:38

I've name changed as this is a very specific scenario so might be outing.

So my granddad died several years back, he remarried later in life & both he and his wife had their own money so their arrangements were for their estates to be left to their own families per their individual wills. My step-grandmother had vascular dementia and though she lived with him until he passed he left provision for interest on his estate to pay for her upkeep until she died. She has been in a lovely place since then but just recently died.

His estate can now therefore be distributed per his wishes in his will. The complexity comes in as he had very formally lent money (a large sum) to step-grandma's feckless son - he didn't use it well and likely doesn't have anything to show for it although I don't know that for sure. Now step-grandma has passed and she had her own assets including a house in an expensive location that will be going to her two children. My question is whether anyone knows if the debt will need to be paid from his share of inheritance back to my grandads estate before he can inherit or will we be left to chase him up for what he owes?

Gawd family situations are such a pain but it's a substantial sum & as my grandads will has his money to be split between over ten grandchildren it will be a sum that would make a difference so just curious if anyone has any legal insights. Hope this makes sense!

OP posts:
Collaborate · 02/03/2022 10:33

Quite possibly it is still owed. You need to consult a real life solicitor.

Crumbs22 · 02/03/2022 11:09

Probably still owed, if it is, recovering it may be difficult. You do need to consult with an estates planner solicitor. On the surface of it, it depends what the 'very formally lent money' means? A contract between the two of some sort than can be produced? It might mean whomever are the Executors of your Grandfather's Will will need to make a claim against the step-grandma's son, as a beneficiary of her Will and estate for the sum he was lent.

AQuestionOfWills · 02/03/2022 17:49

Thank you, yes I'm sure the loans were documented and noted with solicitor so I hope it will all be dealt with by the solicitor and executors and be recouped as part of the process, but worried it might be something that has to be actively pursued rather than de facto dealt with. I guess we'll have to wait and see... will try and get some info from those more directly involved but it's all sensitive and tricky

OP posts:
SolasAnla · 02/03/2022 22:42

Unless the loan document had a provision where the money could be recovered from a distribution from your SGM's estate or she included a clause in her will, the loan and the inheritance are 2 separate legal events.

Your GD's executors would have the obligation to recover the money by negotiation or failing that by suing SGM's DS. The timing would benefit as they know cash should be / will be available.

SGM's executors have a legal duty to settle her estate per her will and pay the money in full. They would have no right to pay off his loan without his permission.

ivykaty44 · 02/03/2022 22:45

Can you ask the executors what they are planning?

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