If I borrowed money from my Grandmother who recently passed, and there was never a signed agreement on repayment, is the loan still due to the estate?
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If I borrowed money from my Grandmother who recently passed, and there was never a signed agreement on repayment, is the loan still due to the estate?
The executor states that a cancelled check written by my grandmother to myself, endorsed by myself with the word “loan” written in the memo stands as a legal contrat of a loan. Is this true?
Asked on April 20, 2015 under Estate Planning, Iowa
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
Is it's not a contract per se, but it is *evidence* that there was a loan agreement--that is, that it was not a gift. If a court could be convinced, such as based on what it says on the check, that this was a loan, then you would have to repay it--it would be a debt of the estate. It's possible that you might be able to convince a court--if the executor brings a lawsuit--that the loan was forgiven or otherwise converted to a gift (though in that case, you might have tax consequences), but it's certainly not a given that you'd win.
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