When your brother borrows money from Mom and won't pay it back

Dear Len & Rosie,

I have a 91-year-old mother and five siblings. My oldest brother has borrowed money from my mother on a few occasions and has stated that he has no intention of ever paying her back. There is no documentation on the loans and as executor of my mother’s will I need to know how to assure this debt is deducted from his share of the estate. The second issue is the same brother has a judgment against him for back child support. At the time he went to court for the back child support he put his house and assets in his son from his second wife’s name so now he shows no assets. I believe he is collecting Social Security as well. If and when our mother passes awayhow can I assure that his debt to his ex-wife will be repaid or will he try to give his share to his second wife’s children.

Steven

Dear Steven,

When your mother passes and you become executor of her will or the successor trustee of her trust, you’ll have to follow the rules. You can’t simply deduct money from your brother’s share just to make it fair. A gift made by a parent to a child doesn’t count as an advancement against that child’s inheritance unless there is good evidence that this was your mother’s intention when she made the gift.

And if it’s been more than two years since your brother said he wouldn’t ever pay back the loans, it’s too late to sue him for a breach of contract. But it’s not too late. If your mother hasn’t lost the ability to make decisions, and if she’s willing, she should see an attorney to update her estate plan and spell out exactly how much money she wants deducted from her oldest son’s share to make up for what she gave him over the years.

Keep in mind that it’s your mother’s choice, not yours. The only definition of what’s fair that applies here is the one in her mind and in her heart. She may be unwilling to reduce her son’s inheritance. Some children just need more help than others. Also, if your mother decides to reduce your brother’s share, she should see the attorney alone, without you being there. Otherwise, you may be accused of undue influence and your mother’s updated estate plan may be invalidated.

As for your brother’s child support arrearage, most wills and trusts include a “spendthrift” clause that prohibits beneficiaries from assigning their interest in the trust or estate to anyone else, either voluntarily or involuntarily. These spendthrift clauses have the effect of protecting a beneficiary’s inheritance from creditor claims.

It seems completely unfair to parents owed child support that a spendthrift clause can prevent them from collecting on a child support claim. Fortunately, the courts agreed and voided spendthrift clauses against child support claims, and the Legislature also enacted California Probate Code section 15305 to cement the deal. As long as your brother’s ex-wife properly files a claim against your mother’s probate estate or trust before the money is distributed to your brother, she’ll get paid first out of his share.

Len & Rosie

What should you do if you lose your estate plan?

Dear Readers:

Many of you may have been adversely affected by the Northern California fires that started in the early hours of Monday, October 9, which are still ongoing as this is written. We have already had several calls from clients and their families reporting the loss of their homes due to fire. Such a catastrophe often results in the loss of important estate planning documents as well.

So, what should you do if you lose your estate plan?

Most of the time, as long as you can get a hold of a copy of your estate plan, it will be alright. If you have a trust, the loss or destruction of your original trust document does not revoke or otherwise eliminate the trust. It will still remain in full force and effect. If you lose your documents, contact your attorney. he or she should maintain a copy of all estate planning documents created by the firm, so it’s usually easy enough to get a copy from him or her.

It is also a very good idea to obtain a digital copy of your documents for safe keeping in case your lawyer’s records are also lost or destroyed. You can have your estate plan scanned and emailed to you, and you can forward a digital copy to everyone you want, such as some or all of your children. This way, even if all physical copies are lost, the details of your estate plan will still exist.

Don’t worry so much about the deed to your home. If your deed has been recorded at the County Recorder’s office, then the original physical document is no longer very important. And these days, the County’s records are backed up digitally as well, so even if the Recorder’s office burns down, proof of your ownership of your home will not be lost.

In your estate plan, there are two documents of which the original documents are very important and ought to be stored someplace safe, such as a safe deposit box or fireproof safe. You need to keep a hold of your original Durable Power of Attorney. Banks and other financial institutions usually do not accept copies, although your attorney or a Notary Public can make certified copies for you if they inspect your original DPOA first.

Your original will is also important. It is possible to probate a photocopy of a will if the original is lost in a fire or other disaster, but this is a bit more complicated and give persons challenging the will an opening to claim that the will was revoked by you instead of being destroyed in a fire. What this really means is that if you lose your original will, you should see your attorney, who should be able to reprint the will with today’s date on it and let you sign it again.

The most important thing to remember is that it’s only money. Whatever you do, don’t rush into a burning home or delay an evacuation to gather your trust documents. Keep it in perspective. Your health and safety are far more important.

Len & Rosie