Taking out a personal unsecured loan for my child.

Get Legal Help Today

 Secured with SHA-256 Encryption

Taking out a personal unsecured loan for my child.

My daughter has 25,000 credit card debt and is unable to get a loan with her credit score. Even putting her on a loan as a co-signer would increase the interest rate. So, I am getting the loan in my name only my husband will not be on the loan either. However, if I should die, I want to stipulate in my will that my daughter continues to be responsible for paying this loan as I do NOT want the money for the loan to be paid out of my estate. Is there a special form that can be filled out to satisfy this that I can have my daughter and I sign? Best steps to get this done?

Asked on April 19, 2017 under Estate Planning, Illinois

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

You cannot do this: your will cannot obligate another person (your daughter) to do anything, such as paying a loan for you. The will only affects the distribution of your own property, nothing else. The best you can do is write you will so that either:
1) whatever amount your daughter would otherwise inherit will be reduced by the then-outstanding balance on the loan (e.g. if $15k is still owed, and your daughter would otherwise receive money and property worth $60k, she will only get $45k); or 
2) that you daughter must pay in full or refinance or take over the loan before probate closes, and otherwise makes sure the estate doesn't pay anything, in order to inherit, or else she will get nothing--but if she is willing to forgo the inheritance, the debt will remain a debt of your estate (all you can do is offer her an incentive to pay it--you can't force her to).
Decide what you want, then consult with an attorney to draft the will the proper way.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption