Should I insist on a contract before lending against my brother's estate?

[Nayone]

I hope someone can help me with this sensitive issue.

My brother lived overseas and he died earlier this year. His estate is complicated due to the fact all his assets are in the UK and the solicitor who is his executor is still waiting paperwork from the country my brother lived in.

His son, my nephew is attending university here as an overseas student and has asked me to lend him money to continue his studies. I know he has no money and his mum has not enough either. This will all be sorted once my brother's estate is finalised.

I sent an email to the solicitor asking advice about this and asking him to confirm I would receive any money I lent as soon as my brother's accounts and other assets were cashed in and he confirmed this. I suggested a contract be written up but have been told by the solicitor that this is not necessary. All I need to do is get my nephew to confirm what the money I lend him is for and the total amount. They guessed I would be reimbursed sometime between 6 months and a year.

I am not concerned about their not being assets to repay me; my brother was a wealthy man.

Should I insist on a contract?

IANAL but I believe it is legally a contract if you and your nephew agree the terms even verbally. I’d be content with an email chain to the solicitors and your nephew, with everyone responding to agree what’s happening. I think that would suffice. I would save it in 2 places. Sorry for the loss of your brother, how lovely that you’re willing to help your nephew.

Lovely you can help...
If you cant afford to write it off get a contract...(by that i mean never see it again).
I formally written is fine I believe...verbal is harder to enforce.

Seems bizarre he was SUCH a wealthy man but he and his mother has zero access to any assets and cannot leverage assets themselves...

I am not especially wealthy and my husband and i could have ready access to 10-20k ie could get 0% credit for 12 - 24 months.
I think I could prob raise 100k if desperately needed....

How much are we talking? Can you afford it?

The contract is basically a record in writing of your agreement to lend the money to your nephew and for him to repay so a letter signed by both of you or an exchange of letters briefly setting out what you agreed would amount to an enforceable contract.

Slightly different but my sisters and I shared a trust which I took a partial share out of. The lawyers drew up an agreement about it at the time. When the trust was dissolved this was useful as to be honest we had totally forgotten that I had done this.
I really think it’s better to get it on paper properly. My friend is going through an issue with her mother’s estate as certain things were agreed with her brother verbally and he’s now back tracking. People may have the best of intentions but make it officially legally binding so there’s no doubt.

Why not lend the money to your brothers estate via the solicitor who can then use it to pay your nephew?

Always put arrangements like this in writing (I write as a former litigation lawyer). Yes, there may be an oral agreement, but you could later have a disagreement about what its terms were (amount lent, repayment schedule, interest rate (if any) etc). If it's written down it's clear to everyone, and if something happened to you then your own executors would be in a better position to recover the money for your estate.

If the estate can pass money you lend it to the son, why can’t it pass money it already has? Or are you lending directly to the son?

So your brothers wife has no access to family money? And despite being a wealthy man/family, his own son has no money? That sounds like an unusual situation to me. I think I’d be wary of handing over anything on the say so of someone else’s solicitor.

That seems to be the consensus of opinion on this thread, thanks. Do you have legal training by any chance?

I would see if you can get a contract (ie an email agreement laying out how much and when its to be repaid by)with both your nephew and his mother (who should be sorting this out imho). That way if something goes wrong with the estate and/or your nephew doesnt inherit himself, the mother is on the hook to pay you back as well.

What kind of solicitor doesnt think its necessary to have a written agreement when it comes to money?! Bloody hell.

Yes, you should have a written contract.

If there is a large amount of money coming their way, why can't your nephew or his mum get a bank loan?

this. and I wouldn't trust this person, who thinks is not necessary, to enact it.

For those saying why don’t they just get a loan, bear in mind university fees for overseas students are considerable - up to £45k (more for medicine) per annum, plus living costs.

If I were you @Nayone I would be taking legal advice on this, as if the estate takes a long time to sort out you could be looking at lending over six figures.

I'm not going in to all the details of this situation as all I asked was if a contract was required. I don't think anyone, who is legally qualified, has answered that. There have been suggestions that a written email between all parties will suffice.

If there are any legally qualified women on here who can answer my query I would appreciate it. The fees will be due soon.

You don’t need a formal contract drafted by a lawyer, it isn’t complex from what you say, but you absolutely do want your agreement clearly set out in writing. Your solicitor should be advising you on what to include even though you don’t need them to draft it but you want it to make sure it’s clear on key terms eg amount being given, who is responsible for paying it back (ultimately it should be the nephew since he is the one entitled to the money, with acknowledgement the executor might pay that out directly to you), when that obligation arises (eg within X weeks of probate being granted). you want that to be sent by one party and acknowledged by the other to evidence agreement. Email is fine.

The reason you want something in writing is both evidential but also to ensure you are on the same page as your nephew / the executors in temes
of your expectations. It benefits no one for there to be any ambiguity - mixing money and family relationships isn’t always plain sailing so set yourself up to avoid that happening.

Yes, I have legal training.

He can get a student loan and a job!!! When he inherits his dads estate then he can pay it off

In sympathy, as I am dealing with a complex estate after the death of my brother. Is it not possible for the estate to lend to your nephew, The beneficiary of the estate, the amount he needs for education? Obviously not all at once. But if the assets are in the uk, the lawyer will have some idea of their value. It is called an interim payment.

I am not legally qualified, but experienced in financial contracts.

The solicitor who says a contract is unnecessary is not your solicitor. He/she is not acting for you. They are acting for the estate of your brother and the beneficiaries of his will.

Please bear that in mind. It could be worth asking a solicitor of your own for advice on this matter.

Thank you to all who replied to my query. I feel more confident about situation now.