Debts owed to an estate...

[Leonidas]

My dear father-in-law passed away this past October and as my in-laws go through probate the family bonds have been tested a little here and there. Nobody in the family has a financial clue except how to make money and then spend it before it gets stale. Add in an executrix (one of DW's older sisters) who has been a three-time finalist in the bitch-of-the-year contest, declared bankruptcy in the past, and has no financial skill other than how to write a check; and, my life is occasionally brightened by some bizarre questions about probate.

I'm desperately trying to stay out of it, but after the Princess spends a little quality time with one or more of her siblings she comes to me in total confusion and consternation about some point of ignorance passed on to her. We had some "teachable moments" and she's considerably chilled out on the issue now.

Most of it has just been sibling issues from childhood that just won't die in that family that get intertwined with their collective lack of knowledge about finances and probate. A little information goes a long way to cool their jets and I can go back to living my peaceful life.

That was until DW dropped a little piece of information on me the other day.

To make a long story short, one of the other sisters owes a boatload of money to their father's estate. She owns her own business, usually makes a lot of money, but rapidly spends every dollar and has totally ruined her credit (bankers chuckle before they tear up her loan applications). Daddy was her only source of credit to purchase some land to store her heavy equipment.

The bombshell that DW dropped on me is that when their father became incapacitated and unable to handle his finances, her sister stopped making payments on the loan. The family member in charge of their ill-father's finances either didn't know about the loan or didn't press their sister for payments. But now that the will is in probate, the executrix is on the trail and has called the loan.

I know that the odds of my SiL having the money to pay off the remaining balance on the loan is less than non-existent. She may be able to borrow the money from her boyfriend (a successful business owner who is a strong LBYMer) who almost certainly has the money to loan her. If he's crazy stupid enough to loan her the money is another matter altogether.

So, here's my question: If a heir to an estate owes the estate money, and has no ability to repay, what are the possible solutions? I think that the pack of financial geniuses that are my in-laws believe they can just ignore the loan balance, liquidate the estate, pay the heirs, and just deduct the loan amount from the one SiL's inheritance. I think that pulling that is a serious boner, probate wise, and neither the attorney nor the court are going to bless that idea. Which leaves SiL in a pickle with the estate and the executrix forced to sue her sister on behalf of the estate.

Have any of you folks ran across anything similar, or have any insight into how this can be legitimately resolved?

Edit to add: Totally forgot this point: Selling the land to recoup the money is totally out. FiL was smart enough to put a lien on the land when the loan was made, but the attorney who filed the lien used the wrong address. Sometime after FiL was incapacitated and SiL stopped making payments, she sold the land and kept the proceeds - actually spent the proceeds. There is some poor innocent land owner out there with a lien on some other piece of property, but the land on which the loan was based has been sold and the money was hosed off. Yes, I am aware that my in-laws are the five-Stooges of personal finance.

 

[MasterBlaster]

Family Fued !

I gather that the amounts owed are larger than anything that will be distributed to her.

As I see it you (and other benificiaries) have the choice of:

1) pressing the issue and trying to collect the debt - Good luck with that

2) Forgiving the debt (no it isn't fair at all)


These sort of issues rip families apart.

For guidance just think - WWMBD (What would MasterBlaster Do).

- Good luck

 

[FIRE'd@51]

Assuming her share of the estate is large enough to cover the loan balance (which your post seems to imply is the case), it seems to me that doing what your in-laws have suggested is probably what your FIL would have wanted, and it would accomplish everyone else's goal. For the estate to sue her for the loan balance would only serve to run up legal costs and possibly recover little if any of the debt; and, IMO, would only be necessary if the loan balance were greater than her share of the estate. I'm not an attorney, but the "legal" way to do this would probably be to have the estate forgive the loan in exchange for her giving up an equivalent amount of her share.

 

[youbet]

How much $$$ is involved, both the debt and the total estate?

 

[Alan]

I guess that your FIL's will did not address what to do about this and it was a simple divide equally between the children?

I'm not a lawyer but I would have thought that the debt to the estate might also be divided if the child refuses to take her inheritance minus what she owes. If the estate is left to sue for the money then you could eat up a bunch of money in legal fees.

It's such a shame that these things can cause such disputes in families but it is often the case. My father's estate is in probate at present and there are 4 of us children. His house etc has to be sold and proceeds distributed. The complication is that with me and my brother living in different continents that our sisters have to handle it and hopefully not come to blows as one of them is a PITA when it comes to money.

 

[Leonidas]

Remembering that all details are fuzzy with my in-laws, once you deduct out all of the real estate that is bequested to specific heirs, the resulting cash is roughly 1.3-ish. One heir with semi-special needs get 25% of that, and the rest get 15% each. So, the SiL, like all but one sibling, is in line for something in the range of 150-195K.

SiL in question owes less than that amount. It depends if anyone wants to make a point of several years of interest owed or if everyone just agrees that she has to pay the remaining principal. But, even if just the principal is in question, it would roughly cut her share almost in half or by a third - again, numbers are fuzzy with this crew.

Certainly, if FiL were still alive and doing his own probate, he would probably work out something along the lines of reducing the one daughter's take of the estate. But once he died the will and the executrix are in charge and I thought the dictates of the will were legally binding. In other words, the executrix has to pay the estate's bills, collect all debts, retitle specific real property bequests, liquidate the remaining assets and then pay out to the heirs according to the will.

Someone more knowledgeable can correct me, but I don't think the executor gets to alter the payout plan. If the will says person X gets 15% of the estate proceeds then that is exactly what they have to do. She does have to file a return with the probate court when she's done that indicates she executed her office faithfully, and changing a basic provision of the will seems to preclude her ability to do that.

I guess my real question is, what power does an executor have in handling the liquidation? I'm sure there is discretion allowed in the valuing and selling of real property, but certainly some legal standard has to be provided for in how the executrix does the business end of the estate's assets. She couldn't sell a $50,000 piece of jewelry to her best friend for $20 - at least I think not. So, the issue is, unless they want to make some lawyers richer, does the executrix get to forgive debts that are legally owed to the estate? Or, is there some way for all the heirs to reach a legal agreement to not follow the dictates of the will and cut one sister short and split that amount between them?

One idea I've been wondering about is, if the executrix can forgive the debt as being noncollectable, and the heirs are not willing to forgive the debt, if they couldn't have a written agreement that encumbers the debtor/sister to each of them by their share of her unpaid debt. The estate clears, she pays each of them out of her share, and if she reneges then each sibling has to decide for themselves if they want to take further action - on their dime.

 

[MasterBlaster]

Probate is your friend

Well the court has to oversee a final settlement. So in that sense the court will dictate what happens.

Is it the law that debts are forgiven upon death? Or can the estate make a claim that passes to the other beneficiaries ?

Perhaps some of the law types will chime in here, but I would suspect that the court would deduct the amount owed from that beneficiary.

If the amount owed is larger than that beneficiaries' share then it is not clear to me if the other beneficiaries can make a claim on a debt or not.

This is what probate is for, and that's the equitable distribution of assets. It's not all about fat lawyers fees. In this case I would say that it is better this case is going through normal probate than had some trust be set up with an out-of-court settlement.

probate is your friend here.

 

[Bestwifeever]

My FIL kept a little book of everything he ever gave his children, including the third-hand coffee table he lent to us one after the other. That document is probably part of the trust even though I don't know who ended up keeping the coffee table.

Maybe to keep things legal and easier, your SIL can write a few post-dated checks split among your DW and the other heirs for her loan's principal and they can run to the bank and deposit them the minute she receives her full share of the estate.

Maybe to help her accept this plan, the other heirs could tell her they are willing to forgive the unpaid interest on the loan.

 

[Brat]

Just thinking in practical terms, perhaps the SIL debtor would sign an agreement that the loan would be deducted from her share of the estate. The key is getting the other heirs to understand that to initiate collection efforts would cost money that would be deducted from the entire estate (including their share) and not likely to produce a better result.

 

[MasterBlaster]

perhaps the SIL debtor would sign an agreement that the loan would be deducted from her share of the estate.

Isn't that what the court would do automatically. If the amount owed is less than the SIL's benefit - wouldn't that be the only thing the court could do ? In that case there is no lawsuit or collection needed.

The only legal wrangling issue I see is that if the SIL somehow tries to weasel out of her debt by claiming the debt was somehow already paid.

- Oh you'll be talking about this one for decades.

 

[calmloki]

When contacted regarding my Mom's substantially smaller estate a lawyer told me "there are no estate police". I think youbet's point #2 is the reasonable way to go. Whether reason and the law are in synch is not addressed here. While your example of the jewelery sale is a good one, I think this is more on the order of the unreported crime. As long as all the participants hang together and agree to the terms and no-one kicks up a fuss the result is the same as if no crime had occurred.

Cheaper to have executrix have a lawyer draft a document re-dividing the estate in a manner that accomplishes the wishes of the deceased and serves to accomplish a fair division at the least cost to the estate than to waste the estate and family bonds in an expensive legal battle for no discernible purpose.

 

[dt123]

Agree with Master Blaster. The debt is an asset that belongs to the Estate. Sister's share of the inheritance will be minus the amount of the debt, if the share is larger than the debt. All neat and tidy.

 

[Leonidas]

You guys are all really nice and doing your best to be helpful, but I guess I'm not doing such a good job on explaining the situation and the nature of my request. Just the bullets then:

• I'm really looking for anyone who have experienced something similar and knows what the alternatives are. It's a weird situation but I bet it's happened before to a lot of folks.
• My only interest in this is trying to maintain the peace in my home. DW's siblings have a habit of over-analyzing things without any real knowledge and then they get on the phone and wind each other up like tops. DW freaks out and turns to me and my choice is to give her the real scoop or be subject to even more gyrations as she starts over-analyzing. I'm just trying to keep the chick's head from exploding.
• She almost never drinks and it wouldn't be a good idea to add alcohol to this situation. I might get some really great sex but the fretting over the probate stuff would just come back.
• I know a probate attorney could answer these questions, and I already insisted that she go find one willing to do so. Most don't want anything to do with will disputes and she and a couple of her siblings had a plan to go speak to one that turned into a disaster which never came to fruition. Like so many of their plans, they were all looking for a "deal" on professional services. Every one of them has a client who is a lawyer and they were sure they could get free, or nearly free, advice based on their business relationship. It just kind of fizzled out after that and I gave up on the lot of them.
• SiL is apparently okay with paying her debt. Other than being a walking financial disaster, she is not a bad person. But when it comes to money she has some questionable situation ethics and in all things financial she is as sharp as a bowling ball.
• The last thing I want to see is this pack of people start suing each other, or be a vicarious victim of the backlash if the executrix is legally obligated to sue the SiL/Debtor. As much as I want to be uninvolved, I have to live with my wife and I will be barraged with questions and some degree of her freaking out over the issue.
• To me, this issue really has nothing to do with the desires of the individuals. They can forgive the debt, enforce it, spend the entire estate into oblivion on lawyer fees, or take their money and have a huge marshmallow roast. I really don't care. My wife can do with her share of the estate as she pleases, because what is hers is hers and what's mine is hers as well. That's how we roll financially.
• The issue is the legality of handling this situation. I'm reasonably confident that the attorney helping the executrix won't break the law. But then again I'm sure my FiL thought that his attorney would handle the lien on the property without screwing up the address.
• Once a will is admitted to probate I'm reasonably certain that the hands of the executrix are tied on this issue. But I'm not positive. Debts owed to someone don't evaporate on their death unless they specifically forgive them in their will. I don't think it matters, legally, if the debtor is a beloved family member. I am fairly certain that the executor of an estate has a legal obligation to enforce all debts owed.
• I am wondering if the executrix has the legal authority to forgive a debt or negotiate a settlement.
• The legality of the heirs making some kind of post-probate agreement to get repayment on a debt that is not legally theirs seems very iffy.

 

[Texas Proud]

Some point of order from me... but not a lawyer....

Who said you have to collect the debt with cash?

What I would do is collect all the debt etc. that I could... and any real assets... one of the assets would be the note...

Now, lets say the note is $100K and she deserves $200K.. (for easy math)...

Then HER distribution is $100K in cash and $100K in a NOTE from her... nobody said you have to distribute 100% cash... Now, if she wants to forgive the note she now owns, that is her right...

It has the same result of 'forgiving' the note and reducing her payout, but in reality she did get her full payout...

 

[Texas Proud]

OK... read your other post... so option #2.....

Partial payouts... as in the above examples... give a distribution of $100K to everybody... but with the SIL, just have her endorse the check back to the estate for payment of the note....

Then make distribution #2 for the rest of the estate...

To me, you are overanalyzing it yourself...

 

[Brat]

My husband had exactly the debt situation described in his parents estate. His mother loaned (verbal agreement) money to his brother's children. Husband asked brother to sign a note payable to his mother's estate in the amount of those loans (in addition to DH they have a sister, none of the other grandchildren had ever received anything other than birhday gifts from these grandparents).

Brother signed the note, the value of which was added to the estate. The note was signed "paid" and deducted from brother's share.

 

[Alan]

SiL is apparently okay with paying her debt. Other than being a walking financial disaster, she is not a bad person. But when it comes to money she has some questionable situation ethics and in all things financial she is as sharp as a bowling ball.

In that case I don't see the problem. Executrix and SiL say to lawyer handling the probate that SiL wants to pay the debt but doesn't have the means until she gets her share of the estate and the lawyer tells them how to do it.

 

[calmloki]

Thinking Leonidas's past history as a bulldog detective LEO puts him at a disadvantage vs us civilians. The law says A B C - that's it, the end, no looking over the boundaries of ABC, no consideration of how to accomplish ABC via other means. ABC. Done.

Thinking that's why there are policemen and lawyers in our society - the lawyers can probably embroider up something to accomplish A B C while wandering across the borders..

 

[Leonidas]

I spent some time reading the probate code and the websites of a few probate attorneys and this is what I found.

The executor has a legal obligation to pursue all debts owed to the estate. Failure to exercise diligence in pursuing repayment of debts makes the executor personally liable for any monetary loss to the estate.

The law allows, under court order, an executor to contract for legal services (on a contingency basis) for up to 1/3rd of the value of item/money to be recovered.

The executor can petition the court for an order to "compound bad or doubtful debts." So if my SiL can prove to the judge that her sister can't pay the debt then it can be forgiven. How the other heirs feel about that might be a problem.

Thanks for all the posts about exchanging her note back to her as part of share of the estate. I like the idea and see that at least one person here had that same experience.

My husband had exactly the debt situation described in his parents estate...Husband asked brother to sign a note payable to his mother's estate in the amount of those loans ...Brother signed the note, the value of which was added to the estate. The note was signed "paid" and deducted from brother's share.

Thanks for coming through again Brat. The only question I have is if that was handled under probate or was it exempt under probate. As I read Texas law (assuming there are similarities across state boundaries) a non-probated estate has far less restrictions imposed on it. But once it enters probate the legal duties on the executor are very specific.

After reading the Texas Probate Code I see too many restrictions that would seem to prevent holding a note as part of the assets. There is an order in how things are supposed to be done and the executor has to report back to the court after completing each step. Currently the executrix is in the stage that requires her to identify, value and report an inventory of all the debts and assets. A follow up step is to settle the accounts, and given the requirement that the executor pursue all debts owed, I don't see how a note survives that step in the process.

The last possibility is a negotiated settlement. That would have to be approved by the court. Common law would seem to be a good remedy, but I'm not sure if the Probate Code allows negotiated settlements for any and all problems coming under probate, specifically as it would apply to this situation. Much of it what I read on negotiated settlements as an alternative to a will seems to revolve around disputes that would normally be challenging the validity of the will, valuing assets, malfeasance on the part of the executor etc. In other words, negotiated settlement seems to be more about suing the estate/executor than it does working out a problem with a debtor who is also a heir.

To me, you are overanalyzing it yourself...

Well, that's your opinion. I thought I was responding to a plethora of questions that were all going (mostly) away from my questions. The conversation was drifting into all sorts of supposition and I was trying to answer questions posed and ones I foresaw to get back to where I was trying to go.

I'm confused. You state that there is already an attorney helping the executrix. Why isn't he/she providing this answer?

Well. I'm quite certain that you are confused on this as well some other things. The attorney is working for the estate under the direction of the executrix. She has instructed her siblings that the attorney is working under her direction, and he is not available to answer questions from other heirs unless they are willing to reimburse the estate for any fees he charges to work with them. Refer to the first part of my first post to refresh you memory about her demeanor, relationship with her siblings, and her ability to understand anything financial beyond check writing. She will tell her siblings what she wants to tell them when she wants to tell them and keep them in the dark the rest of the time. That's just the relationship they have had all their lives.

I gotta agree with TexP. You're drifting into over-analysis, especially considering there is already a lawyer on duty.

Refer to the above, and you can also apply my response to his similar comment as well.

I'm guessing there is something personal here, either with you, DW or another family member, influencing how you want debtor-SIL's situation handled that goes beyond a fair distribution of net assets to the heirs. Maybe, huh?

Well, you are certainly entitled to your opinion, no matter how wrong it is. My wife still doesn't realize there is a potential problem here. She just mentioned that this information about her sister's debt came up, and being fairly certain that the law requires the executor to collect the debt, and SiL can't come up with the scratch, I believed there was a problem that I'll be hearing about later. As for the rest of your comment, I'll self-moderate my response as best as I can at the moment. There is nothing personal in my interest in this matter, as evidenced by my earlier statement that I don't care what the outcome is as long as my wife is happy in the end. They can spend whatever money they get on whatever they want, even if it's just to make a bonfire out of it and roast marshmallows.

The only reason I posed this question was that this forum has always been a wealth of useful information on very wide range of subjects. I've always been amazed at the knowledge present, and up to now, the respectful and helpful responses.

I'm certainly NOT an attorney.

And that's the problem. I asked specifically if anybody had any experience with something similar. So, if you were an attorney, or had experienced something similar, than your opinion could be valuable. But it's a free country and an open forum, so you can post any kind of response you want, even if it's not based in knowledge or experience and pretty much not responsive to what I was asking.

But that little jab from your half-baked assumptions and a do-it-yourself-at home-psychology kit about my motivations, or those of my wife, weren't part of the discussion, are off topic and rude and condescending. When I want to know what others think about what I'm doing, or my motivations behind them, I'll ask for it.

I didn't need any help in dreaming up any of the interesting solutions posted in response. I already have thought of most of them, and the only problem is I was looking to see if anyone could provide useful information based on experience.

But I'd be willing to bet ya a doughnut down at the coffee shop that executrix-SIL is not obligated to sue debtor-SIL, rather she just needs to collect the debt.

I don't eat the nasty things so you can keep your donut.

Since debtor-SIL doesn't have the cash until she receives her slice of FIL's estate pie, but is willing to pay, the attorney already on duty can work out the details of making that work per Texas estate law.

Really? The possibility that the ultimate solution would have to pass muster by the attorney and the court never occurred to me. No, wait a moment, yes that did occur to me.

I think that pulling that is a serious boner, probate wise, and neither the attorney nor the court are going to bless that idea.

 

[Martha]

Remembering that all details are fuzzy with my in-laws, once you deduct out all of the real estate that is bequested to specific heirs, the resulting cash is roughly 1.3-ish. One heir with semi-special needs get 25% of that, and the rest get 15% each. So, the SiL, like all but one sibling, is in line for something in the range of 150-195K.

SiL in question owes less than that amount. It depends if anyone wants to make a point of several years of interest owed or if everyone just agrees that she has to pay the remaining principal. But, even if just the principal is in question, it would roughly cut her share almost in half or by a third - again, numbers are fuzzy with this crew.

Certainly, if FiL were still alive and doing his own probate, he would probably work out something along the lines of reducing the one daughter's take of the estate. But once he died the will and the executrix are in charge and I thought the dictates of the will were legally binding. In other words, the executrix has to pay the estate's bills, collect all debts, retitle specific real property bequests, liquidate the remaining assets and then pay out to the heirs according to the will.

Someone more knowledgeable can correct me, but I don't think the executor gets to alter the payout plan. If the will says person X gets 15% of the estate proceeds then that is exactly what they have to do. She does have to file a return with the probate court when she's done that indicates she executed her office faithfully, and changing a basic provision of the will seems to preclude her ability to do that.

I guess my real question is, what power does an executor have in handling the liquidation? I'm sure there is discretion allowed in the valuing and selling of real property, but certainly some legal standard has to be provided for in how the executrix does the business end of the estate's assets. She couldn't sell a $50,000 piece of jewelry to her best friend for $20 - at least I think not. So, the issue is, unless they want to make some lawyers richer, does the executrix get to forgive debts that are legally owed to the estate? Or, is there some way for all the heirs to reach a legal agreement to not follow the dictates of the will and cut one sister short and split that amount between them?

One idea I've been wondering about is, if the executrix can forgive the debt as being noncollectable, and the heirs are not willing to forgive the debt, if they couldn't have a written agreement that encumbers the debtor/sister to each of them by their share of her unpaid debt. The estate clears, she pays each of them out of her share, and if she reneges then each sibling has to decide for themselves if they want to take further action - on their dime.

Seems to me that the debt should simply be offset against the inheritance. That is what would happen in my state anyway. Have you checked the Texas probate code to see if there is a setoff provision?

 

[Leonidas]

Seems to me that the debt should be offset against the inheritance. That is what would happen in my state anyway.

Darn, I say I'm disgusted with the thread and then you come along with something germane and knowledgeable.

So I understand your response, and from a layman's viewpoint I think it makes perfect sense. Just deduct from her share whatever it is that she owes. It's fair and should make everyone happy. However, I keep coming back to the point that says the executor has a duty to go after all debts owed, and has to get the court's authority to write off any bad debt.

So, if she has to go after all the debts including this one, and her alternatives on any unpaid debts is to sue or get it declared unpayable and removed from the estate's inventory, how does she legally go about distributing the remainder according to the scheme of "here's your share minus what you owed"? I don't think my SiL who owes the debt would balk and demand her "full" share, but people do weird things when it comes to money.

Edit to reply to Martha's edit regarding offset provision: I haven't found it. Doesn't mean it's not there. I did find an provision for exchanging things of value but that read more along the lines of like value.

 

[Nords]

Sounds like a lawyer's really gonna earn their pay on this one. Not for their legal knowledge but rather for their minefield-negotiation skills.

By taking the matter to probate court the executrix would be able to fulfill the intent of the law, if not the precise order/letter of it. The probate court's interpretation would be officially blessed, and their approval of her actions would shield her from accusations of liability or negligence. And once the probate court verifies that no estate tax (federal or state) is applicable then they probably don't care how it's worked out.

Other beneficiaries could complain and file suit against the executrix, but they have a choice: their small pieces of the pie in a reasonably prompt manner, or bigger pieces of an ever-smaller pie maybe someday and having to pay their own legal bills. That usually avoids a protracted fuss.

Then there's the issue of whether beneficiaries want to disclaim their share, and to whom the disclaimed proceeds would go...

 

[kumquat]

I went through a similar thing when my mother died, except that the 2 siblings who owed money were left real-estate and not cash.

Since this happened in Canada it may not apply. As executors I was required to "report to the court when demanded". I lawyer friend told me that this was never (unless a beneficiary demanded it). The "cash" heirs agreed to "inherit" the debt and eventually signed releases saying they approved the job the executor did. Estate finished, no report to court and everyone happy.

YMMV.

 

[Brat]

This is the reason why all our our assets are in a revocable living trust, probate is a pain.

 

[Leonidas]

Sounds like a lawyer's really gonna earn their pay on this one. Not for their legal knowledge but rather for their minefield-negotiation skills.

By taking the matter to probate court the executrix would be able to fulfill the intent of the law, if not the precise order/letter of it. The probate court's interpretation would be officially blessed, and their approval of her actions would shield her from accusations of liability or negligence. And once the probate court verifies that no estate tax (federal or state) is applicable then they probably don't care how it's worked out.

Other beneficiaries could complain and file suit against the executrix, but they have a choice: their small pieces of the pie in a reasonably prompt manner, or bigger pieces of an ever-smaller pie maybe someday and having to pay their own legal bills. That usually avoids a protracted fuss.

Then there's the issue of whether beneficiaries want to disclaim their share, and to whom the disclaimed proceeds would go...

I don't want to give the wrong impression and make it sound like my in-laws are all lining up at the attorneys doors. They're not so crazy or even greedy to try and screw someone out of some money knowing it just comes off everyone's share and could wipe out the estate. But ignorance on the subject reigns.

If anything drags this into a lawsuit it will be done on basically good intentions that are executed horribly wrong.

They've already tried to do some well meaning things that the attorney had to put a stop to because they were illegal. They didn't know they could get an emergency order to pay for FiL's funeral expenses, so one SiL put it on her Discover card. Then she realized she couldn't pay it off and the interest was killing her. One brother volunteered to reimburse her for the expenses and they decided that the estate would just write him a promissory note so he would get reimbursed off the top. The attorney told them they screwed it up because while you can get money to pay for the funeral, borrowing money to pay for it is not allowed.

Same story when they tried to give severance pay to FiL's caretakers. They all lost their jobs just before Christmas and were some very wonderful women who performed their jobs well above what they were getting paid for. I felt that the desire to give them something in return was pretty honorable and well intentioned, but unfortunately, since they were already paid up on their salary, the executrix had no legal authority to pay them anything extra. I volunteered to pay it myself, but I wanted the estate to recognize me as a creditor who got reimbursed off the top. Nixed for the same reason as the funeral expenses.

When I offered to pay the severance packages myself, with some IOU's from each family member promising to repay me after they got the inheritance, it just sort of went nowhere.

The only informal agreement that has survived probate so far is a plan to give the FiL's car to the caretaker. Her ride broke down so much that the family had been letting her use the old man's car for a year or so just so she could get to work. After the funeral they agreed to give it to her as a part of her severance because she had been the supervisor of FiL's care and her devotion to him was like he was her own father. That survived one phone call to the attorney and the car was pulled, at least temporarily. But since the car was a direct bequest to one son the family voted to override that bequest, "Bill, we're giving the car to her". Since then Bill's wife has been obviously nudging him into squawking about some part of his inheritance being give away as a family gift, and he's paying for it all. "Now, remind me what we decided about my car again?"

The result is that the executrix has been slapped down enough that she is laying low on everything. If the attorney tells her to do something she does it and that's all she does. When you factor in that she treats all of her siblings like they're dullards and plays power games by withholding information, the result is a group of people with money issues, no clue about probate, and some trust issues. I think most of the executrix's issue resolve around the long-standing issues she has with her sisters and brothers, but also because she is extremely insecure about not knowing what the hell she is doing. She just doesn't share any information that she doesn't have to. Since nobody else knows what is going on, or what is supposed to happen, they let their imaginations run wild.

If this deal results in a lawsuit (other than the executrix finds her hands tied on enforcing the debt) it will be because they cooked up some off the books deal to try and circumvent a system they don't understand and it blows up in their faces. Somebody will think they got ripped off because it didn't go down exactly as it was written in the will and all it will take is somebody going to the wrong probate attorney to "ask questions".