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  1. #1
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    Aug 2019
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    Lightbulb Debt Repayment Written Agreement Separate from a Will/Trust

    My question involves estate proceedings in the state of: New Jersey

    My brother and his wife are borrowing a large sum of money from my parents so they can have a child through a surrogate mother. An agreement in writing about repayment has been written, notarized, and signed. In the event of my parents' deaths, the repayment would be reflected in both my brother's and my inheritance. Sort of like my brother using his inheritance before inheriting it? It is not a part of my parents' will.

    I don't know if this is more under the realm of contract or estate law, but I do have concerns about the legitimacy of the written agreement and if it could be challenged in any way like a will or trust. There is a big strain on the relationship between all three parties to begin with. Add this in and it could be a battle emotionally and in court.

    Trying to be prepared ahead of time and know what to expect before the inevitable day comes.

  2. #2
    Join Date
    Oct 2014
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    Default Re: Debt Repayment Written Agreement Separate from a Will/Trust

    Quote Quoting JimmyP001
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    In the event of my parents' deaths, the repayment would be reflected in both my brother's and my inheritance. Sort of like my brother using his inheritance before inheriting it? It is not a part of my parents' will.
    The problem I have is that this is not clear what the contract says. Does it say if your parents die before the loan is repaid the debt is forgiven? Does it say that if the debt is not paid that your brother's share of the estate is to be reduced by the amount still owed on the loan (essentially using the inheritance as an offset against the loan)? Or something else?

  3. #3
    Join Date
    Mar 2013
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    Default Re: Debt Repayment Written Agreement Separate from a Will/Trust

    Quote Quoting JimmyP001
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    Trying to be prepared ahead of time and know what to expect before the inevitable day comes.

    Expect a nightmare trying to get the money back from your brother.

    This is how these family loan deals often end up no matter what is on paper.

    Ask yourself this: Why can't your brother get a loan from a bank? Perhaps a second mortgage on his house?

  4. #4
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    Jul 2018
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    Default Re: Debt Repayment Written Agreement Separate from a Will/Trust


  5. #5
    Join Date
    Oct 2006
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    Default Re: Debt Repayment Written Agreement Separate from a Will/Trust

    Quote Quoting pg1067
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    Why do you keep directing us to threads on other forums that do not provide any additional advice?

  6. #6
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    Jul 2018
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    Default Re: Debt Repayment Written Agreement Separate from a Will/Trust

    Quote Quoting llworking
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    Why do you keep directing us to threads on other forums that do not provide any additional advice?
    Asked and answered. Also, the premise of your question is faulty.

    Also, "Information provided in [forums such as this] is not intended to substitute for professional advice, including but not limited to professional legal advice. If you submit a question or comment it is assumed that you are interested in soliciting, receiving or giving general information and not legal advice."

  7. #7
    Join Date
    Jan 2006
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    38,867

    Default Re: Debt Repayment Written Agreement Separate from a Will/Trust

    There is one issue and that is whether the debt allows an offset without a directive stating such. If there is a payment schedule, that schedule would not allow an offset simply due to the fact a contract survives the death of a party to the contract (in general terms).

    If there is no repayment schedule and the debt is considered due on call, then whomever administers the estate can call the debt due and offset any inheritance by applying the debt to the amount determined as inheritance. Of course if the inheritance doesn’t cover the debt in full, it creates a problem. As well, if the administrator does not properly address the debt, it could result in the op losing out on half of the amount of debt owed to the estate. While it could allow for the op to become the creditor, that simply means op would have to take action to attempt to collect on the debt. Nobody here knows if that is a realistic possibility.

    Of course if the contract allows for other possibilities, it will control.

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