Inheritance when a sibling owes money to deceased parent

[JustSaltPlease]

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?

You’re talking about a debt that the deceased has - my DM had several debts when she died, for 4 credit cards. Two lenders wrote them off, two wanted paying which I did once her house was sold.

The problem with that is, if they don't pay it back, it will cost that much to take them to court.
I would predict they would pay back a payment for 2-3 months, and it would not be as much as they should be paying. Then, it will peter out and if they get called on it, they will get quite irate and try to bully their way out of it.
The above is JMHO after many, many years of life.

I would say, "No, that does not work for me and the other sibling".

Why should she be the one to subsidise her Dbs though? For some people, £2.8k is an awful lot of money. they expect their ‘share’ up front and she has to wait for hers? Talk about male entitlement!

The executor should enforce repayment which should be made before the money is divided. I suppose the debtor could agree to dividing the money between the others (and the one who owes £2.5K taking £2.5K less) I’d be cross in your position: what if the debtors don’t pay and just take money offered?

I was upset to hear my neighbour was owed thousands by one grandchild whose house deposit she’d paid and he’d stopped payments with zero discussion. His dad was furious and pretty much nc. Despite this, she left the grandchild the same as the others. It’s amazing what issues inheritance causes.

It gets counted into the estate and taken off their share

I had to do this when my dad died to make sure my siblings didn't lose out

Who is is that's administering the estate OP?

It's the brothers risking the rift

The OP should get what is her due from her father's wishes

so instead of 20k the estate should be

£20k + 9k + 2.5k = £31.5

so £7.87K each

So brother 1 in debt has already had to much and should give back £2.25k

So brother 2 in debt has already had £2.5k and should have £5.37k

the other 2 should take £7.87 from the estate each a total of £15.74 leaving
£4.26

This can be given to brother 2 leaving £1.11k for him to receive from brother 1

All those saying is it worth the fall-out.

What you are actually telling Op is to put up and shut up about their brothers poor behaviour.
Play nice,keep quiet, don't rock the boat.
The Op is not the problem here.

What the brothers are suggesting is immature and unfair .
They owed the estate money, they pay it back via reduced inheritance.
They can then save the payments themselves rather than muddying the waters.

Somewhere ive gone wrong with this calculation...

My gist is

the two that weren't in debt, should have the money they are owed and the brother in debt need to sort out between themselves

So, the sibling who has already had £9k, now will have had £14k, and the siblings who never borrowed from their Dad, walk away with £5k?

BEHAVE.

Blondiebeachbabe
Sibling A, who owes £9k, should receive nothing

Sibling B, who owes £2.5k, should get £5000

Siblings C&D who owe nothing, should get £7500

Sibling A, owes siblings B, C and D, £375 each.

This

Yes, you have gone wrong there.

The sibling who borrowed £9k, won't have that £9k to hand, so you really only have £20k to play with.

The sibling who owes £2.5k, should get £5000

The other two (who borrowed nothing) get £7500 each.

The sibling who borrowed £9k, owes £1125 back to the Estate, which divided is £375 to each sibling. They may decide not to pursue this of course. But the sibling who borrowed £9k, should not get ANYTHING from the £20k pot that is now about to be divided. If he thinks he should be getting anything, he is a very very cheeky fucker.

Who is the exectuor? They will ask them to repay the money to the estate. This should happen before any money is distributed to the beneficiaries.

Keep the emotional pressure on. Dad helped you buy a house. I need my full share to do the same as I’ve no other opportunities. He’d be gutted if you don’t do the right thing and give me the same opportunity.

The sibling who owes £9k, isn't going to have that available to give though, is he? That money will be long gone, as he will have spent it on whatever he borrowed the money for!

Much easier to divide the £20k pot, and have him owing each sibling £375 each, which he may well be able to do in a short time frame, given that £1125 is much easier to find than £9000.

So is your anger borne of jealousy - your dad should have given you more? Only he didn't give the money to the others, it was a loan which they have been paying back, and would presumably have paid in full had your father not sadly died.

I guess you've got to weigh up whether your relationship with your siblings is worth more to you than a bit more cash straight away 🤷🏼‍♀️

It isn't. They have the money now to repay in full. They are being greedy not to repay in full

Then equally, the brothers wouldn't have had this money either. Now their debt can be repaid in full, or almost for one, and no more repayments, so they'll be better off.

Why should they benefit from a lump sum, leaving the other siblings worse off for a while?

Surely 9k bro doesn't get anything from the estate and 2.5 k bro gets a reduced amount then if 9k brother wants to pay the rest 250 each when he can that then becomes fair? Those who owe money certainly shouldn't get an equal split, their inheritance is getting the debt wiped out.

Eh? This makes no sense. The cash IS there right now - £20k. It needs distributing the right way, which means the sibling who owes the Estate £9k, gets nothing. In fact he owes each sibling £375.

This isn't hard. In fact, it's very easy.

What happens in this case if the person owing doesn’t actually have the money ?

I don't know, and nor does the executor. The executor won't care, they will simply tell the sibling they must repay the debt. This is their legal role. It's up to the sibling to find the £9k they owe - presumably by taking out a loan.

People are seeing this as a choice - it's not, being an Executor means you have specific legal duties to carry out to disburse the estate.

One of those is collecting and repaying the debts of the estate.

Another is paying for funeral costs. (Usually comes out first)

Only after all debts have been paid and collected can the estate be disbursed.

The executor doesn't get to do what they fancy to keep the family peace and pacify greedy family members.

It sounds like £20k is in a savings account, but what is happening about funeral costs/rent/bills/house clearance etc?

It is likely there will be even less left in the estate once these are paid - and then the residue of the estate can be split 4 ways, considering the debts owed (unless they are repaid upfront)

So some siblings are going to be getting a lot less or nothing because they owe the estate money.