Legal Question in Wills and Trusts in Alabama
Brothers owe money to estate
My father passed away in the spring of this year. He left a Will stipulating that his estate should be equally divided among his 7 chilren. My one brother had outstanding IOUs to my father for $29k. My father also loaned my other brother $44k toward the purchase of a home. This money came from a second mortgage on my father's house.
Although there are no formal records establishing these ''loans'', the rest of the family share a similar understanding that the money would be paid back to the estate. However, my brothers who owe the money insist that the money provided to them was given as a gift.
Is there any legal recourse in this matter?
3 Answers from Attorneys
Re: Brothers owe money to estate
Yes. The estate of your father has a legal claim against each person who owed him money.
The executor of the estate can file lawsuits against each brother (if necessary) to recover judgments against them for the money owed.
It will be up to a judge or jury to decide who is right and who is wrong.
Re: Brothers owe money to estate
The estate has the burden of proving the money was paid to a child and that it was in fact a loan. I assume there is some writing (an IOU or otherwise) that would show this. If so, the estate would have a valid claim against the child who received the money.
The 'loans' would not be forgiven by the estate unless the Will stated that they were.
Re: Brothers owe money to estate
I concur with Alan and Jon. Unless there is some evidence in writing as to what was intended (gift or loan, with a loan being represented by an IOU or promissory note) or some ability to verify a non-written agreement (for example, who was paying the mortgage, your father or brother?), while the estate may have a claim, it will be an uphill battle to collect it. However, if your brother was paying the mortgage, this might be evidence that a loan was intended, rather than a gift. You do not say if the Will contains any language about this. For example, if it is intended to be forgiven at death, the Will might have a statement to this effect. You can file the claim, but expect it to be resisted, especially if there is nothing in writing.
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