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Old 02-18-2016, 10:23 AM   #41
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My brother borrowed money from my Mother a few years ago. He started paying the money back and died before he could pay it in full. He has 2 living children. My mother wants the money he owes reduced from the amount his 2 children would get. There are still 4 living siblings. She wants to do a codicil to her original will. How do we word this?
I don't think your mother can change your brother's will after his death. Or are you suggesting that HER will be changed to reduce inheritance for these two grandchildren? No reason she can't change her will.
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Old 02-18-2016, 10:35 AM   #42
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It is my Mother's will that should be changed. I know she can change her will with a codicil I am looking for wording help.
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Old 02-18-2016, 10:50 AM   #43
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I had a longer response typed, then a slip of the hand deleted it before I had done a copy/paste. Arghhh!

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Originally Posted by Avalon05 View Post
It is my Mother's will that should be changed. I know she can change her will with a codicil I am looking for wording help.
See the attorney who did the original will, or another if she wasn't satisfied with the first. Or get the NOLO book on making wills if you really want to DIY (IIRC, the book gives a pretty good guide as to when DIY is not a good idea).

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This is the reason why all our our assets are in a revocable living trust, probate is a pain.
I don't see any difference regarding the Original Post. I could have a revocable trust, make a loan to an individual from the assets in the trust, and I'd be in the exact same situation.

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Old 02-18-2016, 12:17 PM   #44
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The executor needs to follow the terms of the will. That being said, the will likely does not require 15% of each asset, but 15% of the value. The value of the note is the principal plus unpaid interest reduced by the costs of collection. Since the executor has the cash, the note is distributed to the debtor plus cash to make up the difference. This happened with my grandfather and an uncle. He wasn't happy, but could do nothing about it.

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Old 02-18-2016, 01:00 PM   #45
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For my personal sanity, and the sake of marital harmony, I eventually washed my hands of the deal. Not that I didn't support my wife emotionally, but whenever the legality of all this came up I gave my standard smartass answer; "Maybe you should talk to an expert on this subject and get some competent advice."

Ultimately they allowed SIL an offset of her share equal to the remaining amount owed, and forgave the interest. I have no idea how this was accounted for in any report to the court, as the executrix continued to be a poor communicator right up the the bitter end (which was about two months ago). The majority of the heirs were by then desperate to get the remainder of the money in the estate and signed off on a waiver to forgo a final accounting.

As somebody previously wrote in this thread, there are no "estate police", and absent anyone raising a formal complaint the issue did not extend beyond the family's effort to work it out.

DW wanted at least an informal accounting of where all the money went, but by then one BiL was desperate for the money, the SiL who owed the debt was desperate for the money (but she has a nice Corvette), and the others didn't care one way or the other. So the Princess caved and signed the waiver just to get the beggars off her back.

Other than not marrying into a family of crazy people with no clue how to manage money, my best advice would be to get the heirs to communicate with each other. It is especially important for the executor to be as open and up front as possible about everything. If we could just follow the wisdom of Rodney King and "all get along", this sort of thing becomes a non-issue.

Or so I imagine it works out that way in sane families.
The OP last posted in this thread in 2011. It would be interesting to know how it all turned out.
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Old 02-18-2016, 02:16 PM   #46
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Originally Posted by Avalon05 View Post
My brother borrowed money from my Mother a few years ago. He started paying the money back and died before he could pay it in full. He has 2 living children. My mother wants the money he owes reduced from the amount his 2 children would get. There are still 4 living siblings. She wants to do a codicil to her original will. How do we word this?

Very little info, and from a long ago thread...


Whoever is probating your brothers will should pay off his debts, including to your mom... if he has not assets that can be touched, then she does not get anything....

That is a cost of lending money... I would not take it out on the grand kids... it was not their doing....

That being said, is she leaving anything to grand kids anyhow? My mom has a few savings bonds to go to grand kids and they get a bit of money from an insurance policy, but all assets go to her kids... if one kids dies before she does then their kids are out of luck....
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Old 02-18-2016, 02:29 PM   #47
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Very little info, and from a long ago thread...


...

That being said, is she leaving anything to grand kids anyhow? My mom has a few savings bonds to go to grand kids and they get a bit of money from an insurance policy, but all assets go to her kids... if one kids dies before she does then their kids are out of luck....
I want to say that this is unusual drafting.... But since I don't do estate planning work, better to say that I've seen more than a few wills and trusts discussed in published cases (as well as in a couple of our cases and our family's own documents...) that provide for the grandchildren to collect their deceased parent's share and split it between them equally.

As always, check the documents.
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Old 02-18-2016, 02:42 PM   #48
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The trust grantor can modify the trust to reflect the unpaid debt, deducting the debt from what the grandchildren would otherwise receive. If the estate will pass via a will prepare a codicil to the will.

Frankly these changes should be made under the advice of an attorney so that there is no question, legally.
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Old 02-18-2016, 03:03 PM   #49
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Originally Posted by Avalon05 View Post
It is my Mother's will that should be changed. I know she can change her will with a codicil I am looking for wording help.
Something like:
"The remainder of the estate will be divided among my grandchildren as follows:
1. To the children of my son, their half share is to be reduced by $xxx,xxx being the amount of an unpaid loan by said son and the balance divided equally between them.
2. The remaining grandchildren will receive the unreduced amount, namely a one quarter share each of the total."

Lawyers will add many more words so there can be no room for interpretation. But the executor of the son would handle paying off any balance if the loan were documented.
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Old 02-18-2016, 03:19 PM   #50
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Originally Posted by 2017ish View Post
I want to say that this is unusual drafting.... But since I don't do estate planning work, better to say that I've seen more than a few wills and trusts discussed in published cases (as well as in a couple of our cases and our family's own documents...) that provide for the grandchildren to collect their deceased parent's share and split it between them equally.

As always, check the documents.
Yep, but it was what my mom wanted... Both the attorney and I mentioned the option you say, but she figures that she left the grand kids something and it is their parents job to make sure they have enough... I will be the executor as I used to do estate taxes when I was young...
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Old 02-18-2016, 04:46 PM   #51
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We had a somewhat similar situation a few months ago when settling DF estate. Two siblings had received major lump sums when they became unemployed a few years back. The amounts they received were considered as "early disbursements" (or accounts receivable) and added back into the total estate. The division was then made according to the terms of the estate and the amounts distributed early to the two siblings were deducted from their share. No interest was considered; only the principal. This estate was in a trust which made it easier to handle.


All of us signed individual acknowledgements and agreements of the disbursements prior to actually receiving the distributions.


Sorry for my post. I did not realize this tread was so old.
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Old 02-20-2016, 09:26 AM   #52
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Originally Posted by kcowan View Post
Something like:
"The remainder of the estate will be divided among my grandchildren as follows:
1. To the children of my son, their half share is to be reduced by $xxx,xxx being the amount of an unpaid loan by said son and the balance divided equally between them.
2. The remaining grandchildren will receive the unreduced amount, namely a one quarter share each of the total."

Lawyers will add many more words so there can be no room for interpretation. But the executor of the son would handle paying off any balance if the loan were documented.
IME, lawyers will add many more words, and end up still leaving (or actually creating) room for interpretation. I get the impression that many of the words are just to make them look important. But the extra words can actually add to confusion. They certainly do not use clear straight logic in the documents I've seen. My MIL's trusts had several entire sections that seemed like just filler, things totally unrelated to anything the family would be doing. The lawyer that wrote the original trusts some 20 years ago could not even explain some of the stuff that he wrote! How is another person (and the executors are lay people) supposed to read this unambiguously? When I asked about some of these sections, I just got brushed off with a 'that is standard language'. I took that to mean "our software spits that out, we have no idea why it is included".

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Old 02-20-2016, 10:29 AM   #53
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IME, lawyers will add many more words, and end up still leaving (or actually creating) room for interpretation. I get the impression that many of the words are just to make them look important. But the extra words can actually add to confusion. They certainly do not use clear straight logic in the documents I've seen. My MIL's trusts had several entire sections that seemed like just filler, things totally unrelated to anything the family would be doing. The lawyer that wrote the original trusts some 20 years ago could not even explain some of the stuff that he wrote! How is another person (and the executors are lay people) supposed to read this unambiguously? When I asked about some of these sections, I just got brushed off with a 'that is standard language'. I took that to mean "our software spits that out, we have no idea why it is included".

-ERD50

Since I had to deal with trust in one of my jobs, I can tell you that a lot of that 'filler' is needed because of court cases that were decided in an adverse way when those words were not included...


And lawyers steal whole sections of others work. One of the lawyers I worked with who developed mortgage backed securities showed me a section that she wrote... she wrote it in a strange way just so she could see who stole her work... it was funny to see it in EVERY MBS that I looked at....
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Old 02-20-2016, 12:35 PM   #54
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Since I had to deal with trust in one of my jobs, I can tell you that a lot of that 'filler' is needed because of court cases that were decided in an adverse way when those words were not included...
No doubt. But some of this was clearly superfluous additions. There was some paragraph about giving the executor the power to invest/create in some "Qualified Conservation Easement", which I read up on a bit, and might have some fancy, complex tax advantages in some specific case. But this family was not sophisticated investors and did not get involved in complex tax schemes. So are they going to list every conceivable investment opportunity, an almost infinite list? Then why spell out these?

There's more like that, and in my view, the basic "act as fiduciary" requirement should be enough w/o using paragraphs to spell out a bunch of can do x,y,z, when they add "or other suitable investments". Just a bunch of fluff.

And the important stuff they screwed up - I had to point it out to them, at first one lawyer said No, it's correct and NOT redundant - we re-read it, and it still seemed wrong/redundant - the second lawyer in the office agreed at a follow up meeting, and changed it to what we thought it should be. And these are the 'experts' (actual Estate specialists, not a 'country lawyer').


Quote:
And lawyers steal whole sections of others work. One of the lawyers I worked with who developed mortgage backed securities showed me a section that she wrote... she wrote it in a strange way just so she could see who stole her work... it was funny to see it in EVERY MBS that I looked at....
It happens in other places as well. A friend told me that the company he worked for was trying to protect itself against other companies just wholesale copying their hardware. They ended up putting meaningless "do-nothing" copper traces on the PCB, as a 'fingerprint'. I guess they must have copyrighted the PCB 'artwork' (and that is the industry term used for the photo-image of the PCB traces), and I was told that held up in court, especially when the copy-cats were unable to explain the function of those traces (there was no function!).

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