Debt in Will

[Guest]

Needs some advice please from this informative site. In short Mum and Dad remortgaged their house to lend money to member of the family on the basis he would pay the mortgage for them. He defaulted many times to the extent of mum and dad being threatened with repossession. They panicked and did Equity Release to pay off both parts of the mortgage. He did not pay mum and dad back so they put a clause in their mirror Wills to this effect and mentioned figures owed. Dad died in 2016. Executor did not implement clause out of respect to mum and her feelings. Mum made a new Will not mentioning the debt or a clause to revoke the debt. Mum has now died. Mum verbally said the debt was paid but no evidence in paperwork or large sums in her bank. She does not have any other accounts. Can the Executor of dad's Will now ask for proof that the debt has been paid, how and when? Comments will be most appreciated. Thank you in advance.

[Amethyst]

Was your dads aim for any inheritance to that family member to be reduced by the amount of the debt ?

[Guest]

Yes it was my fathers intention to reduce his inheritance by the debt. The clause was in the original mirror Wills of my parents on this basis.

[Guest]

Any more comments please would be appreciated.

[Amethyst]

Peridot ( just tagging her for you xx ) Is this the same Will as in your other thread ?

[Guest]

Yes it is. Thank you.

[Guest]

Good morning Peridot.

I see Ameyst has tagged you in my behalf and wonder if you have any advice please. Many thanks.

[Peridot]

Hi Poppyx,
Apologies, I've been off. So the executor to your father's estate did nothing in relation to the debt owed or was it that the debt was not going to be repaid until both parents had passed away?
Your mother then changed her Will which no longer mentioned the debt due, is that correct?
Do you know whether your mother had decided to write the debt off? It is of course her decision. Do you know whether her most recent Will was prepared by solicitors? It may be worth contacting them to request the file notes. You would then have an idea whether the debt was discussed and hopefully what your mother's intention was at that time?
If you have the clause wording of your father's Will relating to this debt it may help us work out what happened on his death, whether the executor ignored the issue or whether the Wills were always drafted to leave the debt issue to the survivors death to be dealt with.

[Guest]

Hi Peridot. Many thanks for your reply. I assume the debt was to be paid upon the sale of the house when both parties died and my brother's inheritance would be reduced by the amount owing. My mother before her death 3 months ago verbally said he had paid it back to us all but there is no evidence whatsoever that this has happened. She only had one bank account and very little in it at the time of her death and no other accounts or investments. My dad, up until his death, insisted it had not been paid back and was going to write my brother out of the Will if my mum died before him. Mum did go to a solicitor to write the new Will. In her new Will there is no disclaimer clause revoking the debt. so it is all verbal with no written proof. My parents both had a mirror Will with the clause in it see below.

"I declare that on...…..1991 my wife and I made a loan to our son...…..by a mortgage secured on our property...……….that he made £...….during the period …..1991 to......1993 but that on...……….2003 my wife and I repaid the balance outstanding on the mortgage of £...….. and I direct that in distributing the residue of my estate my trustees shall deduct the value given to him and referred to above from M...…. 1/5th share whether such share shall pass to him."

The

inducement

with my parents
was my brother would pay their small mortgage and his portion but he failed and my parents were threatened with possession of their house. There was a Charge on their house for the added mortgage. My parents then took out Equity Release to pay off both mortgages.

Am I right in thinking verbal is not admissible as opposed to written proof? Do you think their is a case to pursue for written evidence the debt has been paid?

The Executor of both my parents previous Wills is not the Executor of my mum's latest Will.

Many thanks in advance.

[Peridot]

Hi again,
Unfortunately verbal agreements although not always avoidable do not carry the weight a written agreement does. Has the brother been asked to prove he repaid the sum? Is there nothing on either your mother's (or his, if he claims he paid them back) bank statements to indicate this?
It wouldn't make a difference who the executors are it is the lawyers preparing the Will that should have maybe asked certain questions if they had been informed of the previous Will. It may be sensible for the executor to contact the solicitors who prepared your mother's Will to see the attendance note that was taken and whether there was any mention of the debt owed.
There is the issue of course that maybe your mother didn't wish to hold him to the debt? It is difficult for you, particularly when they took an equity release which no doubt has reduced the proceeds of the house quite considerably, but unless the agreement they had with your brother indicated he should also refund any interest I feel there is little room for manoeuvre.
Maybe seek some face to face advice from a contested probate specialist, either a free or reduced fee appointment. Prepare a timeline of events and see what options they believe could be open to the beneficiaries. Depending on the amounts in question it may prove too costly to pursue, the impact being the value of the estate is so reduced from legal fees there is little left. Legal advice would help you make a decision on the best course of action I suspect.

[Guest]

Mum and dad used the same solicitor for all the Wills and I woul have thought they should have advised mum about adding a clause to the effect she has dismissed the debt. It does leave a bad feeling as he has not only benefitted by the loan, he will also benefit if there is any inheritance left. Can you just write in and request to see the notes or does it have to be done officially? Many thanks again.

[Peridot]

You need to make a Larke v Nugus request which basically means they should provide you with the file notes from the time mum made her 2nd Will. You will need to write to the firm. This link may help. It is what is advised when responding to a Larke v Nugus request so you can prepare your letter requesting all the bullet points and confirming this is a Larke v Nugus request. https://www.willwriters.com/blog/larke-v-nugus/ Basically ask for the information and see what comes back then you can consider whether there is any runway to take this further. If the issue of the debt was raised when taking the instructions and mum said she didn't wish to include it then there is little you can do.
If it has evidently never been discussed and the fact they had prepared the previous Will which they no doubt would have had sight of at the 2nd will preparation then it may be worth considering whether to take the matter further potentially with a professional negligence claim. See what the firm comes back with.