Legal Question in Wills and Trusts in Missouri

money owed to deceased with no written agreement

i borrowed $5000 from a friend in oct 07 , we had no set payment amount or payback time,just pay what you can when you can,i paid him 3 payments of $300 each totalling $900 so far. it was a verbal,handshake type deal, no paperwork. after i paid him in jan 08 he told me multiple times not to pay him any more and i owed him nothing(i have 3 witnesses to his statement) i told him i planned on continuing payback anyhow. he passed in feb 08 and i planned on putting any payments in trust at local bank for his son,but i recieved a letter from an attorney stating that i had to pay him or decedants mother directly $300 per month until paid in full or be charged 9% annum. the mother found his check book and seen a check to me and asked a mutual friend, and he apparently told her what he thought our agreement was.i feel morally obligated to put in trust but do not feel obligated to pay her as she had nothing to do with it. i dont want to be bullied either. 2 of my coworkers borrowed from him and they have not recieved a letter, i believe because they are family friends. i just want to know since there was nothing in writing am i (legally) obligated to pay mother or lawyer? his mom said i could pay whatever to trust but the letter scares me.


Asked on 2/24/08, 10:46 pm

1 Answer from Attorneys
Anthony Smith LawSmith

Re: money owed to deceased with no written agreement

If there was a valid loan agreement between you and your deceased friend, the Personal Representative (PR) has the obligation to collect that debt for the benefit of the estate. You are not able to provide enough facts here for me to give you a clear opinion as to whether there is an enforceable agreement. The PR must prove that the debt is owed, if you contest it. If the Probate Judge agrees you owe it, then you owe it, absent an appeal of that decision.

Your plan to pay the money into the trust of the decedents' son, is honorable. but, it may not relieve you of the obligation to the estate. If the PR proves you owe the money, you may not get credit for what you have put into the son's trust account. If she cannot prove the debt, then you may not owe the debt to anyone from a legal standpoint. As you mentioned, you feel that morally you owe the debt, but are unsure to whom it should be paid.

You seem to have four choices; pay the money to the PR or her attorney, refuse to pay the money to either of them, pay it to the son's trust, or pay no one until acourt tells you to. If you choose the first, there appears to be no downside, from a legal perspective. If you choose to deny the request to pay the money, you should hire counsel to more clearly advise you and possibly file some papers on your behalf.

If you pay the money to the son, you may have to pay it to the estate again. One thing seems clear, you do not owe the money to the surving spouse directly.

I strongly suggest that you meet persoanlly with a probate attorney in your area to discuss your options, before deciding what to do. the money you save may more than offset a minimal consultation fee.

Good Luck

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Answered on 2/24/08, 11:10 pm


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