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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:
BruFord · 31/07/2024 01:51

The debt is documented. A repayment agreement drawn up, and witnessed!

Your Dad clearly didn’t intend it as a gift then, it’s a debt owed to the deceased as @Sewannoying says.

Personally, I think that @Gasp0deTheW0nderD0g‘s Scenario 2 would apply.
£12.5K of a £31.5K Estate is nearly 40% and it doesn’t sound as if your Dad wanted your brothers to receive a larger share than their siblings, he wanted his Estate to be equally divided. Are they being difficult about it?

3CustardCreams · 31/07/2024 02:00

If you get on with your siblings sometimes it’s best to let things slide rather than have a massive fall out over a relatively small amount

HoppingPavlova · 31/07/2024 02:04

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

That’s a bit iffy though as relies on debts being documented and debts within family often are not, otherwise it can all become quite ‘he said/she said’. So, in the absence of proof the executor can be a bit of a toothless tiger.

Exited to add, I understand in OP’s case the debt is documented so the executor CAN factor it in, but many family debts are not.

Codlingmoths · 31/07/2024 02:21

If the debt is documented then the executor has a legal responsibility to include it. I would say that.

SeatonCarew · 31/07/2024 02:34

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

Op has now said there is written proof of the debts, but where this is not the case, any evidence of repayments made is also proof the amount was a loan, not a gift.

Ihateslugs · 31/07/2024 02:44

Ihateslugs · 30/07/2024 18:56

I have this situation having given my eldest son £20,000 over the years to help him out in a toxic divorce. When I rewrote my will recently, I have stipulated that my other two children will receive £20,000 each then the rest of my estate will be split three ways. I used a solicitor to write the will.

Luckily there should be plenty of money to do this, due to the value of my bungalow and other savings including inheritance from my mum which will more than cover any possible care costs.

I should add that I have discussed this with all my children so they are fully aware of the will - and are happy with the share.

HucklefinBerry · 31/07/2024 03:15

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 absolutely still owe money to a deceased estate.

HucklefinBerry · 31/07/2024 03:21

@Kitkat1523

Not if they’ve just ‘borrowed’ money from their dad …..they will say it was a gift….end of🤷‍♀️
Ok so you aren't talking out what the law is you are talking about what unscrupulous people do. That's not the same thing

Ger1atricMillennial · 31/07/2024 03:22

@JustSaltPlease

You have my sympathies this is a shit situation. My Uncle is taking alot of money here and there from my GM- basically using her as a cashpoint. My DM doesn't want to rattle the cage and "he is looking after her" even though my DM is the one that provides her personal care so she doesn't have a carer.

There is going to be a big fall out when she dies. Uncle 2 is just as grabby and will not be happy when he finds out all the cash is gone.

HucklefinBerry · 31/07/2024 03:23

lastgreat · 30/07/2024 18:55

Does it not depend if it was documented as a loan or just given as a gift?

It's totally different if it was a gift. But we aren't talking about gifts here

ForGreyKoala · 31/07/2024 03:23

JustSaltPlease · 30/07/2024 21:54

I just feel strongly that it shouldn't be written off

No, it shouldn't be written off, and if the loans are documented then they will have to be taken into consideration. If that causes a family fallout then so be it.

HucklefinBerry · 31/07/2024 03:24

PurpleDiva22 · 30/07/2024 19:46

I look at it like had my parents lived for the debt to be repaid, they would've spent the money and I wouldn't have seen it anyway

Edited

Weird thing to think

HucklefinBerry · 31/07/2024 03:25

MissMoneyFairy · 30/07/2024 22:26

Debts die on death if there's no money, property or assets,

You are talking about debts owed BY the deceased when they die with no assets or money.

That's not the situation here in any way

ForGreyKoala · 31/07/2024 03:25

HucklefinBerry · 31/07/2024 03:15

You absolutely still owe money to a deceased estate.

Show quote history

This. Of course you still owe money to a deceased estate. The deceased's estate still has to pay what they owe to others, and the reverse is also the case.

HucklefinBerry · 31/07/2024 03:26

3CustardCreams · 31/07/2024 02:00

If you get on with your siblings sometimes it’s best to let things slide rather than have a massive fall out over a relatively small amount

The OP says the amount isn't small for them.

Also why are you suggesting the onus on keeping relationships is down to the people who don't owe the money?

BruFord · 31/07/2024 03:51

HucklefinBerry · 31/07/2024 03:26

The OP says the amount isn't small for them.

Also why are you suggesting the onus on keeping relationships is down to the people who don't owe the money?

Show quote history

@HucklefinBerry I tend to agree that the onus is on the people who owe money to the Estate to maintain family relationships. In this situation, if the brothers refuse to repay their debts to the Estate, they’re intentionally keeping money that should be shared with their siblings. Their Dad made it very clear that it wasn’t a gift.

HucklefinBerry · 31/07/2024 04:12

Who is the executor of the will.

It's not really relevant what the brothers want or don't want. If the Liam is documented then the executors are responsible for taking this into account and allocating accordingly.

Practically it may just mean no one physically repays anything. the one with the largest loan walks away with a few hundred more due to what he already has being slightly more than his share and the one with the £2.5k loan ends up getting the £2.5k less than you had other sibling who have not borrowed.

Rosscameasdoody · 31/07/2024 04:30

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,

Isn’t the executor responsible for collecting any debts owed to the estate ? I thought that was part of their duties.

IReallyStillCantBeBothered · 31/07/2024 04:31

MissMoneyFairy · 30/07/2024 22:26

Debts die on death if there's no money, property or assets,

You’re talking about if the deceased owed money when he or she died, yes the death will be null of there is no money or assets left, but if the deceased is owed money and it is documented the debt is owed to the estate.

Nightowl1234 · 31/07/2024 04:39

@HoppingPavlova lots of incorrect information on this thread from people with zero knowledge. Those who have advised you that if the loan is documented, the debt is still owed to the estate are correct. You are legally in the right position ie the debts should be taken into account and paid back to the estate (or, deducted from the amount due to a beneficiary). Don’t let yourself be screwed over by this - the money is still owed irrespective of death.

WiddlinDiddlin · 31/07/2024 04:46

It shouldn't... but this really depends on who the executor is.

If its one of the siblings who owes money or someone liable to take their side... the outcome might not be strictly legal.

I would make sure the executor is aware of the loans outstanding to the deceaseds estate.

Lacdulancelot · 31/07/2024 05:07

@JustSaltPlease if the £9k house deposit was fairly recent then your parent will have had to sign to say the money was a gift with no expectation of repayment.
That may change things.

Mummyoflittledragon · 31/07/2024 05:37

The debt is documented so legally this should be included and satisfied with the funds distributed accordingly. Ergo your one sibling will receive nothing as they already have had their share. I’d probably write off the 1k owed though for the sake of family relations.

autienotnaughty · 31/07/2024 05:44

When my mum died my ds and I were gifted 20k each. However I owed 8.5 k. So I got 11.5k.

I would say the fairest way is 8k each. So the sibling owing 9k has to pay 1k in . The other sibling gets £5.5k If they can't afford to then I would write off the 1k (only £333 each for other siblings so not worth it) and two siblings get £7670 and the sibling who owed 2.5k gets £5170 (approximately)

Freespeechisvital · 31/07/2024 06:23

The executors, if there are any have a duty to administer the estate correctly.
As he didn't have a will then there is a nominated personal representative, usually a family member.
Probate will need to be applied for and it sets out the debts etc owed on the estate.
Any funeral costs/ headstone costs etc Costs owed to him

Have the funeral costs and any debts been accounted for?
If not its likely the estate will be less

The Siblings owed the father's estate the sums mentioned and so it should be taken into account and distributed fairly.