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Is an alleged loan agreement between family members valid without any documentation or witnesses?

Columbus, OH |

I am the executor for an estate. After a long battle with cancer, oddly, the deceased's brother has come forward with a claim that he loaned his brother $1,500,000 over 5-6 years. There is no one else to substantiate this claim. He states it was an oral agreement and has shown amounts that have come out of various bank accounts. Prior to this, he has never demanded payment. If he is the only witness to testify, can he really be deemed credible without the decedent here to defend himself? We also can't understand why he never brought this to anyone's attention during the course of his brother's terminal illness, as they were on good terms. How can we be sure this was actually a loan versus a gift? They were also partners in an LLC and co-mingled money regularly.

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Attorney answers 3

Best Answer

If the estate hasn't hired a lawyer, it needs to do so, with so much money at stake. The estate's lawyer needs to discuss all the facts with all the parties, and research whether OH's version of the "Statute of Frauds" makes unenforceable any alleged oral contract that couldn't be performed within 1 year from the time it was entered into, for this amount of money. I'm guessing it does.

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Under New York law, the brother would not be allowed to testify to his claim. It would be rejected out of hand. The law differs from state to state, however. You need to hire a probate lawyer to deal with this issue and possibly the commingling issue as well. It seems to be a substantial estate. Many people try to avoid probate to save on legal fees. It's usually a bad idea, and it this case it would definitely be a bad idea not to hire a lawyer.

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When a person has a claim against an estate, most states require that claim to be filed in the Probate Court where the estate is pending and it has to be filed within a relatively short deadline. Once it is filed, the person who makes the claim still has to prove the claim is valid under the law if the executor, or the attorney for the executor, disputes the claim’s validity. However the law is a little different from state to state. If you are the executor of the estate then you need to discuss this completely and carefully with the attorney for the estate so you can find out exactly how this would work in your state. If you are the executor and there is no attorney for the estate, then if the claim is very large you certainly should consult with a Probate Law attorney right away. There are several professional associations of Probate Law and Guardianship and Elder Law attorneys that you can locate on the internet. You need to talk to a local Probate Law attorney who deals with this kind of case. Check online or call your local attorney's Bar Association and ask for a referral to a Probate Law attorney near you. If this answer was helpful, please give a “Vote Up” review below. Thanks. Ron Burdge,

This answer is for general purposes only and does not establish an attorney-client relationship. Click the link to find a Consumer Law attorney near you.

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