My brother and his wife borrowed approximately $35,000 from my parents. They signed a contract agreeing to make monthly payments, which they are not keeping up. Recently, my parents informed me of this, and said that during the last visit with their son, he mentioned that his wife is out of control with spending, so they are unable to make payments. They enjoy many trips and many expensive outings, but they recently lost the home they were in and needed to move...the need to borrow the money.

My mother informed me that there is a stipulation in the contract that if/when my parents die, my brother and his wife will not be held accountable to repay the loan. I'd like to add...when my sister-in-law's father died years ago, she "mourned" his passing by going on a 2-week cruise and has enjoyed several since, using the money left to her by her father. She spends like there's no tomorrow, and I believe with that stipulation in the contract, they have no intention of repaying the loan. My parents are 86 and 83, their health is failing.

My question is this: Have they voided the contract and/or committed fraud by not keeping up payments and showing no intention of repayment? It seems to me they can't have it both ways. My parents' wills state that their assets be divided between their three children, but my mother is worried that they will not repay the loan AND their son (and his wife) will receive his share of their assets, which aren't much to begin with. My parents are not wealthy, and this loan certainly decreased their savings.

Any advice will be very much appreciated.