Legal Question in Real Estate Law in Virginia
Recording a private investor loan
We are to receive a loan from my father in-law (~100K) for some real estate we plan on acquiring. He desires to have language in the loan document stating in the event of his death the holders of the loan would be split between his daughter (my wife) and her sister. Can this language be included in a recorded loan or how/what would need to be done to have something like this accomplished?
2 Answers from Attorneys
Re: Recording a private investor loan
I see no problem in putting the suggested language in the loan document(mortgage) itself, however, assuming that your father has no other extant instrument by which he intends to pass this item to heirs such as a revocable living trust, then clear testamentary language should also be included in his will describing this particular bequest to whomever he wishes to receive it.
Re: Recording a private investor loan
To start the Note can include the provision without a problem. This can also be reflected on the Deed of Trust (which is the only instrument that gets recorded)... The Deed of Trust should state that the Beneficiary of the Deed of Trust is your father in law and in the event of his death... your wife and her sister. However, the best way to get this done is through a will. This is a specific bequest and should be stated clearly and inequivocably in his will.
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