I am executor to my dad's trust and my brother borrowed $55,000 over time what do I do about making things right? 33 Answers as of February 06, 2013

My brother borrowed $5,000, then $20,000, then $30,000. He never paid it back. He has always been that way. What do I do to balance the scales with the remaining 3 of us and I am 1 of the 3.

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Hamblin Law Office | Sally Hamblin
Brother needs to pay it back. If he is to receive additional money, then typically the amount owed is subtracted from amount to be received. If he is not entitled to anything, then he needs to pay loan amount.
Answer Applies to: Michigan
Replied: 2/5/2013
Law Offices of Gerald A. Bagazinski
Law Offices of Gerald A. Bagazinski | Gerald A. Bagazinski
You could treat the loan as an asset in the trust inventory.
Answer Applies to: Michigan
Replied: 2/5/2013
Reger Rizzo & Darnall LLP | Kathleen DeLacy
You need to look at the trust to see if there is a provision. It would depend on when he borrowed the money, etc.
Answer Applies to: Delaware
Replied: 2/6/2013
Donaldson Stewart, PC
Donaldson Stewart, PC | Monica H. Donaldson Stewart
I am answering this question from the perspective of "settling" the dispute since I do not litigate probate/trust matters. If the amount your brother borrowed was less than his "entire" share of the trust, you can "credit" his share with the amount he borrows, and then divide the rest among the other beneficiaries. For example, if the trust estate is valued at $300k, that means that each sibling would be entitled to $100k; however, your brother has already received $55k of his share. This means that you and the third sibling would each receive $55k (to balance out the loans to your brother), and then the remaining amount would be equally divided among the three of you.
Answer Applies to: Arizona
Replied: 2/6/2013
Durham Jones & Pinegar | Erven Nelson
You should treat the brother like any other person who owes the trust money. As trustee, send him a demand letter telling him that if he doesn't pay or come to terms with you he will be sued by a lawyer on behalf of the trust. I have a partner who specializes in trust administration, and there are other good lawyers in Nevada who can help you.
Answer Applies to: Nevada
Replied: 2/6/2013
    Law Office Of Victor Waid
    Law Office Of Victor Waid | Victor Waid
    Same answer I gave before. Were these actual loans? If so, then they are assets of the estate and need to be accounted for, especially when time comes for distribution according to the terms of the trust; if not, and were gifts, then they were gifts outside of the trust estate.
    Answer Applies to: California
    Replied: 2/5/2013
    Law Offices of Frances Headley | Frances Headley
    It depends upon what the will says and what proof you have of the indebtedness. You should consult a probate attorney to determine how you can proceed.
    Answer Applies to: California
    Replied: 2/5/2013
    Richard J. Keyes Attorney at Law | Richard J. Keyes
    You as the trustee have the right to take the $55,000 in consideration when you distribute the trust assets. Please make sure that you are letting your brother know that you are doing this and get a release from him that the net amount is all he is entitled to for the distribution.
    Answer Applies to: Missouri
    Replied: 2/5/2013
    James Law Group
    James Law Group | Christine James
    Tell him he needs to pay it back by having his share reduced and see what he says. Legally if there was no promissory note it will be hard to force repayment.
    Answer Applies to: California
    Replied: 2/5/2013
    Law Office of Edward M. Burgh, APC | Edward M. Burgh
    Do you have proof that it was a loan to be paid back? Maybe you dad gave him the money. As the Trustee of his Trust, do you have a source to find out what he meant? If it is in Probate Court, have your Attorney bring a Petition to find out and let the Court decide.
    Answer Applies to: California
    Replied: 2/4/2013
    Law Office of Pamela Braynon | Pamela Y. Braynon
    You can always sue him for what he owes as trustee of the trust. If you are the personal representative of his estate, you can sue as personal rep of the estate.
    Answer Applies to: Florida
    Replied: 2/4/2013
    THE BROOME LAW FIRM, LLC
    THE BROOME LAW FIRM, LLC | Barry D. Broome
    Divide the property and subtract what has already been given in loans. Barry Your financial plan is not complete until it is co-ordinated with your estate plan. Will your family be provided for when you are gone? Without a Will, the court will decide.
    Answer Applies to: Georgia
    Replied: 2/4/2013
    Frederick & Frederick PLC | James P Frederick
    The question cannot be answered from the facts you have stated. Was it clear that your dad intended the money to be paid back? That seems like an obvious question, but unless it is clear from the documents that he did, then you may not be able to collect it. If that is the case, you would need to equally divide the estate assets.
    Answer Applies to: Michigan
    Replied: 2/4/2013
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    The estate may have a claim against him for monies owed. However, it also may depend on whether he agrees the money is owed, if not what proof exists that the money was lent, that it was in fact a loan and not a gift and if a loan, whether the statute of limitations has or has not expired on suing for the loan. As the trustee of the trust, you have an obligation to the other beneficiaries to make that determination and proceed accordingly.
    Answer Applies to: California
    Replied: 2/4/2013
    DOUGLAS A. TULL, P.C.
    DOUGLAS A. TULL, P.C. | Douglas A. Tull
    A lot depends on the language of the trust, when it was signed, and when these "loans" made. If no evidence of a loan exists from the Trust (no promissory notes or memos on check which indicate they are "loans" from the Trust - and if dad's Trust was written or amended after the "loans" then you may have trouble asserting a right against brother. Also, without something mentioning the trust in terms of the disbursements (did funds come from the trust) to the brother, the right of action that exists, if any, may be in a probate proceeding - which would add cost and delay to settlement of your father's trust/estate.
    Answer Applies to: Michigan
    Replied: 2/4/2013
    Minor, Bandonis and Haggerty, P.C.
    Minor, Bandonis and Haggerty, P.C. | Brian Haggerty
    Talk to the lawyer helping you with the administration of the trust (please tell me you've got the advice of a lawyer in doing this). In general, in Oregon, unless your Dad got enforceable promissory notes for the "loans," or unless he left some specific directions in his trust, there isn't much you can do.
    Answer Applies to: Oregon
    Replied: 2/4/2013
    James Oberholtzer, Attorney at Law
    James Oberholtzer, Attorney at Law | James Oberholtzer
    If your brother really borrowed the money and you can prove it, he owes it back to whomever he borrowed it from. If it was the trust, the trustee has a duty to recover it.
    Answer Applies to: Oregon
    Replied: 2/4/2013
    Peters Law, PLLC
    Peters Law, PLLC | Mark T. Peters, Sr.
    Assuming that there has been documentation regarding the loans, he has received $55,000 towards his share. If the $55,000 is also part of his siblings share, then you should ask for repayment. If he doesn't repay, then you sue him to repay the trust. Of course, if there is no promissory note, that may be tough.
    Answer Applies to: Idaho
    Replied: 2/4/2013
    Kokish & Goldmanis, P.C.
    Kokish & Goldmanis, P.C. | Bernard H. Greenberg
    To start, your job is not "to balance the scales". Your job is to be the trustee of the trust and follow it's terms and Colorado law in administering the trust. If there are legitimate debts owed by your brother to the trust, then there are actions you can take concerning these. To determine your proper course of action, you should consult with an attorney who specializes in trust administration and litigation.
    Answer Applies to: Colorado
    Replied: 2/4/2013
    Irsfeld, Irsfeld & Younger LLP | Norman H. Green
    Consult your lawyer. Are you executor of your dad's estate or trustee of his trust? Are their promissory notes? To your dad individually or as trustee? Possibly you will be able to treat this as an advance to him or as an asset of the trust or estate, which likely would have similar effect.
    Answer Applies to: California
    Replied: 2/4/2013
    Alston & Bird | Jack Sawyer
    You could either collect the money or distribute the debt to him as part of his share.
    Answer Applies to: Georgia
    Replied: 2/4/2013
    WARM SPRINGS LAW GROUP | Elliott D. Yug
    You can give him a $55,000.00 credit for the monies that he has already received. This assumes that there is enough money remaining in the trust. If there is not enough money remaining in the trust before taking legal action consider the possibility of recovering money from your brother as well as the harm to the relationship.
    Answer Applies to: Nevada
    Replied: 2/4/2013
    Danville Law Group | Scott Jordan
    It depends on what the estate instructions are. Did your father obtain a promissory note from your brother to repay the loans? Did your father leave a will or trust stating you should deduct the monies owed from any inheritance? If there were no such documents or instructions, you will need to negotiate with your brother and hopefully convince him to forego a portion of his inheritance.
    Answer Applies to: California
    Replied: 2/4/2013
    Gates' Law, PLLC | Thomas E. Gates
    You need to check both the will and trust document concerning forgiveness of outstanding loans. If no language exist to that effect, then you can subtract from his distribution the money that he owes the estate.
    Answer Applies to: Washington
    Replied: 2/4/2013
    Winnick Ruben Hoffnung Peabody & Mendel, LLC | Daniel N. Hoffnung
    If there is enough to balance, take it from his share If not, the Trustee can sue him.
    Answer Applies to: Connecticut
    Replied: 2/4/2013
    Charles M. Schiff, Attorney at Law
    Charles M. Schiff, Attorney at Law | Charles M. Schiff
    Assuming that the money was not intended as a gift, you treat it as an asset of the estate, i.e., the right to collect $55,000. When it comes time to distribute the estate, your brother can be treated as having already received $55,000.
    Answer Applies to: Minnesota
    Replied: 2/4/2013
    Goldsmith & Guymon
    Goldsmith & Guymon | Dara Goldsmith
    There are a number of issues, are the loans documented in writing? Does your brother acknowledge that he still owes the money? Are the loans addressed in the estate planning documents? You should probably address the answers to those questions with an estate attorney to assist you in your next steps.
    Answer Applies to: Nevada
    Replied: 2/4/2013
    Kram & Wooster, P.S. | Richard H. Wooster
    First, you have to establish that it was a loan and not a gift. Was there a promissory note or other evidence that it was a loan. If the loan was in fact a loan, it is an asset of the estate. You will have to prove it in court and it could be deducted from his share if the loan is proven.
    Answer Applies to: Washington
    Replied: 2/4/2013
    Musilli Brennan Associates PLLC
    Musilli Brennan Associates PLLC | John F Brennan
    Call for an appointment and consultation. Generally you brother should either be paying back the loans, or, in the alternative, have his distributions decreased until he is even with he rest of the beneficiaries but that will not be necessary and losses loans from your father are properly documented and legally enforceable. For a firm opinion I would have to review the trust. Clearly you have not been seeking legal counsel and should. All my office for an appointment or another attorney.
    Answer Applies to: Michigan
    Replied: 2/4/2013
    The Wideman Law Center, P.C. | Susan Wideman Schaible
    Is there documentation of his "loans" and that he had to pay them back? Does he want to pay them back or does he claim they are gifts. Unless you can prove they were loans and not gifts, you may not be able to "make things right" between all of the children.
    Answer Applies to: Michigan
    Replied: 2/4/2013
    Gateway Legal Group | Christian J. Albut
    This is a factual question. Will need to know if promissory notes were made for the loans or if the money was seen as an advance on the inheritance. If they were considered gifts then it would be very difficult to say there should be a balance unless the brother agrees.
    Answer Applies to: California
    Replied: 2/4/2013
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