Skip to main content

Father died, bank accounts in his & one child's name or in trust for that child, has will. how to settle with other kids.

Rochester, NY |

Dad had several bank accounts either joint /w 1 child or in trust for that child. Another child has been estranged from family for several years and borrowed money from dad many times. Records are found in father's writing /w ck numbers, amounts & what loans were for but records are undated, likely 30 years old. Will states any possessions at time of death be sold & proceeds split between children equally. 1) is money from bank accounts considered part of the estate/will or does it belong to the child that is on the accounts to do with as he sees fit? 2) is child who borrowed money responsible for repaying those outstanding loans? Can the amount be deducted from what she would have received otherwise as settlement?

+ Read More

Attorney answers 3

Posted

The accounts that are joint or in trust for one child go outside of the will and probate and directly to that child. After that, if the will does not state that any loans need to be deducted from the distribution before it is divided, then the proceeds would need to be distributed per the will. It sounds like the loans, even if memorialized (the father may have kept records but there is no signed documents stating the child agreed to pay back the loan, at what rate, and at any rate, the statute of limitations would have passed. Who knows if some of that money was paid back?

Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on since each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.

Posted

Attorney Victor is correct. The accounts in joint names or with beneficiaries listed will not go through probate. Unless the will specifically provides for adjustments for loans or there is documentation of debts owed Dad, it is unlikely that the amounts will be deducted from the child's share. Does the will say anything about debts from children? You should check with a probate lawyer in your area.

If you found this answer helpful, please click on the thumbs up at the bottom.

Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on since each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.

Posted

As my colleagues have correctly noted, the joint and/or trust accounts will pass outside the will and will therefore not be counted as part of the estate that is to be divided by the will. The same would be true even if no will were in place.

With respect to the second part of your question, a slightly more specific answer may help guide your actions. First, you (or your lawyer by examining the documentation) must determine whether the money passed to the estranged child was a gift, or a loan.

If the money passed to the estranged child was a gift, the question to ask is whether the gift acted as a "satisfaction of legacy." If, on the other hand, the money was a loan that can be proven, the ESTATE may have a creditor claim against the estranged child because the loan should not be extinguished by the creditor's death.

In the case where the money was a gift, the rule in NY is that a gift by testator during life is not a satisfaction of legacy unless it is proven as such by (1) a contemporaneous writing (written at the time of the gift) and indicating the gift to be a satisfaction, AND (2) the writing is signed by both the donor and donee. As a side note, even if your father died intestate (without a will), the rule would be the same, but the terminology would change. Instead of calling it a satisfaction of legacy, the gift would be called an "advancement." Either way, you should have an attorney look at the records you found to see whether they qualify.

In the case where the estranged child received a loan, the Estate may potentially have a suit against the child for the amount owed it. The suit would be brought by the executor (or administrator as the case may be), and a recovery would then go back into the Estate. The gross estate, including the recovery, will then again be distributed according to the will, or laws of intestacy if no will exists. Here, the statute of limitations would not necessarily be expired simply because the monies were loaned 30 years ago. The terms of the loan agreement would instead dictate whether a case will lie. Again, while the records you found seem sparse, you should have an attorney look at them to determine your rights in this specific situation.

If you have any questions or want to discuss this further, feel free to call 718-720-7000 and ask for Guy.

Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on since each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.

Can't find what you're looking for?

Post a free question on our public forum.

Ask a Question

- or -

Search for lawyers by reviews and ratings.

Find a Lawyer