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Original poster

Inheritance when a sibling owes money to deceased parent

304 replies

JustSaltPlease · 30/07/2024 16:27

Hi

My dad has sadly passed away a few weeks ago. He had around 20k in the bank which is being shared between the 4 children. No will.

However, one brother owed him 9k, and the other 2.5k.

What is the best way here. Surely what they owe should be considered dad's estate, and the whole amounts divided by 4. Siblings will still owe the other recipients then but this does mean the 2 brothers walk away without any cash. Am I making sense?

OP posts:
otravezempezamos · 30/07/2024 16:28

It should be like this, yes but sadly legally this is unlikely to stand.

Relaxd · 30/07/2024 16:30

There isn’t a best way, the will should simply be followed. I’m afraid you can’t owe money to a dead person, that will be nullified. I understand your point here but it won’t be relevant legally sadly,

Soontobe60 · 30/07/2024 16:34

If there is proof that your DF lent your siblings money, and there was, for example, a repayment plan in place, then yes, the debts should be ‘repaid’. His estate is actually worth 31.5K and each beneficiary should receive £7.9K each.

Soontobe60 · 30/07/2024 16:35

Relaxd · 30/07/2024 16:30

There isn’t a best way, the will should simply be followed. I’m afraid you can’t owe money to a dead person, that will be nullified. I understand your point here but it won’t be relevant legally sadly,

You’re wrong - an executor has a duty to collect all debts owed to the deceased before distributing it.

foothandmouth · 30/07/2024 16:35

It's not big enough amounts to be worth falling out over. Your relationship with your siblings is more important

MissMoneyFairy · 30/07/2024 16:38

Morally the siblings that owes should pay in what they owe then divide the total by 4, but this is money none of you had and destroys families when there is a dispute. Are the funeral costs and any outstanding debts being paid for from the 20k.

Belladone · 30/07/2024 16:39

When MIL passed away the solicitor asked if anyone owed anything or was owing money from the estate. My BIL had borrowed her about £15000 money she had leant him for work on his house. This deducted from his half. It did cause a bit of upset at the time my SIL said that the debt died with her, but the solicitor and BIL agreed this was the honest way to do it and legally he had to pay the money to the estate. This was over 25 years ago now so things might have changed, but I would check into it if I was you.

it did cause a family upset though, and my DH said it really wasn’t worth all the upset, but it was out of our hands. I would consider how much you’ve talking about, and the upset it might cause

SirChenjins · 30/07/2024 16:41

The money is deducted from their share of the estate - we’re going through this at the moment with SiL who owes an eye watering amount. The executor will sort out the debts before allocating shares of the estate.

Gasp0deTheW0nderD0g · 30/07/2024 17:00

MissMoneyFairy · 30/07/2024 16:38

Morally the siblings that owes should pay in what they owe then divide the total by 4, but this is money none of you had and destroys families when there is a dispute. Are the funeral costs and any outstanding debts being paid for from the 20k.

I'm sorry for your loss, OP. Flowers This will be a difficult time for you. I hope family fallouts don't make it worse.

Responding to the post quoted: this is money none of you had

Don't understand. OP says one brother owed him 9k, and the other 2.5k. Presumably this means one brother had been lent a sum of at least 9k (he might have repaid some already, I suppose) and the other 2.5k. If the OP's father had not lent his sons this money his estate would probably have been 31.5k, not 20k. The difference to the other two siblings is quite a bit.

Scenario 1: ignore the debts. Estate is 20k. Four siblings. £5k each. In addition, though, one brother is saved from repaying 9k and the other 2.5k, so they end up better off than the other two siblings.

Scenario 2: the debts are treated as part of the estate (I believe this is the correct legal position). Estate is therefore 32k (rounding up to make the arithmetic easier). Four siblings. £8k each. However, one brother owes 9k, so he gets nothing and in fact has to pay 1k in. The other brother gets 5.5k. OP and the remaining sibling get the full 8k each (if their brother can pay in his 1k).

A lot will depend on what the brothers borrowed the money for. If it was for (say) urgent health treatment for something the NHS couldn't treat quickly and that was really affecting quality of life, the other siblings might well feel their Dad would have been happy to treat that as a gift. If it was to fund a big holiday, not so much.

DullFanFiction · 30/07/2024 17:10

I agree @Gasp0deTheW0nderD0g
I think another side is whether there is a proof this was money borrowed rather than a gift - aka is there a legal document showing that the father has lent that money to the siblings??

Wo any document, it’s going to be hard to advocate this is part if the estate and wasn’t a gift from the father.

DullFanFiction · 30/07/2024 17:13

Btw I agree that seeing the amounts - receiving £8 rather than £5 - I’m really not sure it’s worth fighting for.
Nor because of the stress and effort it will require nor because of the rift it will create (but then it might be there already?)

MissMoneyFairy · 30/07/2024 17:19

What do the siblings who owe the money think is fair,

prh47bridge · 30/07/2024 17:21

otravezempezamos · 30/07/2024 16:28

It should be like this, yes but sadly legally this is unlikely to stand.

No idea why you think this won't stand legally. The money they owe is legally part of the estate. Each of the children should therefore inherit around £8k.

It is ok to offset their debts against their inheritance. So, for example, if we imagine that each is entitled to exactly £8k, the one who owes £2.5k would receive £5.5k, but the one who owes £9k will have to pay £1k into the estate.

Snippit · 30/07/2024 17:33

I just hate when siblings don’t pay loans back to their parents. When my dad passed I approached my brother to pay back the 15k my dad had loaned him many years prior to his passing. My brother never intended to pay it, my mum really needed this money and when I asked him to pay it to my mum he was vile. He said if he’d known it was a loan he would never had taken it! It was to help him keep the marital home during his divorce.

My mum has made a new will stating this predicament and had it written that I get an extra 15k before whatever is left is divided. I can’t forgive him, I think what he’s done is disgusting. He even had the audacity to tell my mum he’d discussed it with his new wife that they were happy if she needed to release equity in her property, what a bastard!

My dad will be turning in his box of ashes, bless him. I believe in karma and hopefully one day he’ll get his comeuppance. Even his own son has no respect for him.

Coconutter24 · 30/07/2024 17:36

Is there a paper trail or evidence that the two owe your dad money? What would your dad want? Would he want the debt collecting and splitting or would he just want you all to take an equal share of the 20k?

Kitkat1523 · 30/07/2024 17:36

The ‘debt’ dies with the parent…..this causes many a fall out ….seen it loads

Gasp0deTheW0nderD0g · 30/07/2024 17:40

Kitkat1523 · 30/07/2024 17:36

The ‘debt’ dies with the parent…..this causes many a fall out ….seen it loads

It doesn't. When someone dies, their estate still owes any balance left on their mortgage, credit card, overdraft etc. Mirroring that, the bank owes them the amount they have in any savings accounts, utilities companies would have to pay back any overpayment, and so on. It's just the same if an individual owes them money. It's an asset of the estate and the executor or administrator has a legal duty to collect the money so it can be distributed to the beneficiaries.

Tricky when it involves family members, though.

leeverarch · 30/07/2024 17:43

Kitkat1523 · 30/07/2024 17:36

The ‘debt’ dies with the parent…..this causes many a fall out ….seen it loads

No it doesn't. The money becomes owing to 'The Estate of...'.

PurpleDiva22 · 30/07/2024 17:45

Is it likely to cause upset and fall out among your siblings if you suggest this? I don't think losing 2 siblings is worth 2.9K! But each to their own.

PermanentlyFullLaundryBasket · 30/07/2024 17:46

Unless the 'debt' is documented, and/or the two debtors have a strong moral compass, this isn't worth falling out over.

leeverarch · 30/07/2024 17:51

How long ago did they receive the money and was it expected to be repaid, was it a gift, or was it possibly an 'advance' on their inheritance? If it was fairly recent and the death wasn't unexpected, then it could well be the latter.

YabaJaba · 30/07/2024 17:52

It's not up to you - the rules of intestacy come into effect.

If there was no partner, the estate will be divided equally between you children.

YabaJaba · 30/07/2024 17:54

Hi ever I should add, I believe any debts or indeed money owed to the intestate person, must be paid/received before the money will be divided.

Elektra1 · 30/07/2024 17:55

Depends if you can prove the loans were loans and not gifts. If there's written evidence of them being loans then perhaps yes. If not then you're falling onto the consciences of the siblings in question

Kitkat1523 · 30/07/2024 18:05

leeverarch · 30/07/2024 17:43

No it doesn't. The money becomes owing to 'The Estate of...'.

Show quote history

Not if they’ve just ‘borrowed’ money from their dad …..they will say it was a gift….end of🤷‍♀️