<p>These loans aren’t the same as bank loans and I doubt BIL would “foreclose” on her house if he had lent her mortgage monies that she couldn’t repay. He would in that situation be the one left holding the bag. I just don’t think he should be made out to be such a dirtball because he wants his money repaid now that she has it.<br>
As to how he has mangled his kids’ lives… it is such a common reoccurring theme. Our best friend who is very wealthy has raised an immature trust fund child. Not sure these kids are “fixable” at these ages.</p>
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<p>BIL can certainly ask for early repayment, but should not use the inheritance as leverage, nor should he expect SIL to have any obligation to agree, since a deal made honestly in good faith is a deal.</p>
<p>Regardless of how this is resolved, it looks like both BIL and SIL are likely to have money troubles in the future.</p>
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<p>Why should she if she’s made consistent timely payments on that loan in accordance with the agreement the BIL and his lawyer wife DREW UP? SIL has held up and honored her part of the written agreement. </p>
<p>It’s the BIL who is the one attempting to go back on the agreement by unilaterally changing the terms after the fact and in the process, violating another separate agreement…ensuring his mother’s assets are distributed according to her expressed wishes.</p>
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<p>It’s not SIL who is making those factors an issue in this whole matter, it’s the BIL who is making his own economic difficulties/issues the SIL’s when it has nothing to do with the agreement or her. </p>
<p>Making one’s own problems someone else’s as BIL is doing here adds to the dubiousness of his conduct in ways similar to that of the attempts by my friend’s tutor to retroactively increase her hourly change on past tutoring sessions he already paid for because she incurred massive library fines. Sorry, but both cases are IMO, weak sauce. </p>
<p>SIL’s economic issues are also irrelevant here as she has honored her part of that agreement by making timely payments and being current on them. She’s kept her part of the agreement. On the other hand, the BIL’s a different story…</p>
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<p>I would also recommend the SIL and other members of the family approach any future dealings with the BIL with extreme caution…especially those regarding matters of finance or those requiring sticking by one’s word. </p>
<p>From this episode, it’s clear he’s willing to unilaterally go back on an agreement HE & HIS lawyer WIFE drew up and attempt to use his position as controller over his mother’s estate coercively. </p>
<p>Crooked and dishonorable as in so doing, he not only went back on his agreement with his sister, but also went against fulfilling his responsibilities by abiding by the wishes of the deceased. </p>
<p>Moral of the story is never lend money to friends or relatives. If you aren’t willing to just gift the money to them they
need to find another source for funds. </p>
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<p>Some more ideas related to these types of cases:</p>
<p>If you do lend money with an agreement…especially a written one, make sure you account for as many possible contingencies in drawing up such an agreement as possible. Anything not included is, by definition, not part of the agreement. </p>
<p>Consider the possibility that if you will feel angry if the loanee who has consistently honored his/her agreement and is current on payments suddenly managed to gain a large sum of money, but doesn’t offer/declines to accelerate payment in preference to sticking with the agreement, you’re not in the right psychological/emotional place to be lending money to anyone. Especially if they’re friends or family. </p>
<p>Manifesting the behavior akin to the “a&*^%le giver” by doing things like changing terms midstream or similarly…suddenly demanding to take back a given gift reflects very poorly on the individual and his/her character. Abusing one’s powers and in the process, violating another contract to someone else…especially the deceased worsens the effects of that poor reflection on the one doing so. </p>
<p>I’ve been reading but not commenting. I was the executor for my mom and what a nightmare. It’s amazing what money can do to a family. I won’t go into the details, but I can relate to those who have siblings who don’t speak to them and reget what it does to our children’s relationship with their cousins. What I really wish and what never would have happened is that my mom had sat down with all of us and said this is what I have and this is what I am doing. That way, the cards would have been on the table and she would have been available to explain. </p>
<p>In the meantime, your brother has that checkbook and is mixing issues. It’s wrong for him to repay that loan to himself, but you will never convince him of that and no matter how it ends up, the relationship between the two of them will never be the same.</p>
<p>It is sad when money comes between family members. It reinforced my belief that it’s very dangerous to lend any family or close friends any money – gift or don’t, but loans can be pretty toxic to relationships. It’s sad but true.</p>
<p>On the other hand, we did loan S a significant amount of money for a 1 year loan (funds that we will be fine giving him if for some reason he is unable to repay). Short term loans of money that you are OK with gifting if it turns out to be that seems a safer way to go.</p>
<p>I think they are all crooks. They just don’t know or admit it.</p>
<p>?? Who are all crooks? Everybody? Everybody in this family? All executors???</p>
<p>The whole family is crooked. Remember this is my own opinion just like you have your own opinion that I don’t always agree with sometimes.</p>
<p>I think financial issues really bring out the worst in people. My parents have handled their affairs so that all the children already know how assets will be distributed. But with my friends, I see that real problems arise when parents die and you have a situation where one or two siblings are wildly successful and others are simply comfortable. All of a sudden the wishes of the parents mean nothing and the less successful siblings see the assets as being “up for grabs”. They view them as a way of equalizing the lifestyles. They really just don’t comprehend that the central underlying purpose of a Will is to distribute property in accordance with the wishes of the deceased. It is especially hard on siblings if the parents have decided to distribute assets in an unequal manner, which of course, they are certainly entitled to do.</p>
<p>It seems there is only contention between two members of a large family. I personally don’t see any crooks but do predict hard feelings if there isn’t a way to find a compromise that works for the two members and likely family members will be enlisted to pick sides and make the situation more contentious. SAD!</p>
<p>I’m not sure if there are any hard feelings yet, only they or family members could answer that. I think the way to avoid damage is for sil to allow bil to pay back loan with the inheritance money. We know he wants the money repaid so do it without hard feelings. Who cares what the terms were…graciously repay and vow to never borrow money from friends or family members ever again. Lesson learned and crisis avoided. SIL obviously way overspent on her child’s education when she couldn’t even come up with a home equity loan as a better way to finance tuition bills. And I mean better in the sense of not borrowing from BIL but still a poor idea. Must not have much equity in their home…scary.</p>
<p>But what if the sister needs the money too? She has a signed loan contract and presumably has made her financial plans accordingly.</p>
<p>I wonder if the SIL dies suddenly is the loan forgiven?</p>
<p>I don’t see any crooks in this situation. </p>
<p>My guess is that BIL’s wife, drafted a basic installment note to accomplish two tax-related goals: 1.) sufficient evidence of debt so that a capital loss can be taken in the event the debt is worthless, and 2.) charges at least the Applicable Federal Rate of interest so there is no Gift Tax on the transaction. I doubt that in a family situation there is a 10+ page credit agreement that you might find at a bank - if there was such a lengthy agreement, it likely would have covered potential inheritances.</p>
<p>As a banker who deals with trusts and fiduciary matters on almost a daily basis I can say there is absolutely no legal way for BIL to set off SIL’s debt to him from the proceeds of MIL’s estate. He should distribute the money equally among all siblings. </p>
<p>However, I also believe it is a best practice to pay off “intra-family” loans ASAP - especially if a “liquidity event” has happened, no matter the financial situation of the lending party or the originally agreed upon terms. No matter how wealthy the family member is, they are not an unfeeling and detached financial institution. Even if BIL willingly made the loan and SIL is paying as agreed, there is still a debt. The sooner everyone is on equal footing, the better. </p>
<p>I agree that there is a huge difference between a bank loan and a family loan. Why don’t sister and brother sit down over a cup of coffee and discuss a mutually agreeable payment modification in light of the multiple changes in circumstances. This isn’t a banker and a client. This is brother and sister. And cousins. And a recently deceased mom. They should talk to each other and work it out. Period.</p>
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<p>In that event, if SIL has sufficient assets from estate to pay it off and there are no other creditors with greater priority in getting paid off under law, my understanding is no.</p>
<p>However, if her estate is financially exhausted, the loaner is likely out of luck unless he/she can get the executor on the hook for it. That’s one I’d chalk up as one of the risks one assumes when extending a loan to anyone…whether family/close friend or not. </p>
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<p>That’s my personal policy and one I would do if I was in SIL’s place. </p>
<p>However, while it is more ideal and gracious for her to do so, she is not legally nor IMO, ethically mandated to do so considering she has been making timely current payments and thus, demonstrated she has honored her part of the agreement. </p>
<p>In that light, she is not wrong to decline and prefer sticking by the original agreement BIL and his lawyer wife drew up. </p>
<p>My impression is BIL’s strongarming of her by using his position as controlling his late mother’s assets as leverage has likely destroyed any possibility SIL would voluntarily agree with this with grace…and any possibility their relationship…or the relationship between him and other members of the extended family would be the same from that point forth. </p>
<p>Heck, if a relative/friend pulled what this BIL tried pulling, I’d refuse to accelerate payments even if I could on principle against this strongarming and acting in a bossy manner. </p>
<p>This was one case which probably could have ended better had BIL adhered to the old adage that “You can catch more flies with honey than vinegar”…especially when the vinegar is particularly pungent as BIL’s behavior has demonstrated. </p>
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No surprise there.</p>
<p>We only know second or third hand how this was addressed between the brother/executor and the sister. Being passive aggressive just on principal is a sure way to further strain a relationship that could likely be repaired with a reasonable conversation.</p>
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<p>There mere fact the BIL is the executor is a key part of why his behavior is so odious. </p>
<p>It is IMO an abuse of his powers and a hypocritical violation of another agreement…to ensure his mother’s assets are distributed ACCORDING TO HER WISHES…not his for the sake of his own financial interest. </p>
<p>If anything, this demonstrates a clear conflict of interest that IMO, makes him manifestly unfit to serve in the executor role and one which should give others pause regarding whether they’d trust him in future dealings involving finances or counting on his integrity and standing by his word/agreements. </p>
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<p>If this was broached BEFORE BIL decided to use his position as executor as leverage to strongarm his sister, it could have worked out fine. Unfortunately, he decided on the strongarming which has come to pass. </p>
<p>In light of that, it’s very likely the time for a friendly discussion over a cup of coffee has long past in the sister’s and possibly the BIL’s eyes. </p>