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Equity Loan to Mother-In-Law. Advice Please

Hello,

My mother-in-law has asked me to lend her £5,000. In return on the event of her death £10,000, would be paid to me from the sale of her property. This £10,000 would be initial £5000 plus cover fees, interest, solicitors fees etc..

In her will, I am also left a half share in her property. The £10,000 would be taken out and the rest split equally betwwen my brother and myself. Is there anything that sounds dangerous, risky or illegal here.

Many thanks

Comments

  • theartfullodger
    theartfullodger Posts: 15,827 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Nah.

    She can change her mind and change her will. It is also too good a deal... "If sounds too good to be true that's because it is too good to be true" (Anon).

    Lend her £5k, maybe, on strictly commercial terms on a separate loan deal.. (I loan you £5k, you pay me £29:23/month for 25 years (APR 5%)). If I die, estate pays the outstanding.

    Call me cynical:


    Good luck, whatever you decide...

    Lodger
  • LoopyPrune
    LoopyPrune Posts: 205 Forumite
    Never ever mix business and family it doesnt work and always leads to trouble. Yes I'm sure somebody will post after me saying they lent their mother/brother/uncle £x amount but do you really want to be put in this postion.

    Ancient Chinese man once told me neither a borrower nor lender be.
    Credit card and overdraft at 18. 2 loans and 3 storecards at 20. University education flushed down the toilet through debt at 22. Car finance at 23. Car repossessed at 24. Rock bottom at 25. Learnt my lesson 26-33. Now 34 with a mortgage on an affordable house, a car paid for with cash and a bank account in credit. I learnt the hard way.
  • margaretclare
    margaretclare Posts: 10,789 Forumite
    Ancient Chinese man once told me neither a borrower nor lender be.

    Or, Polonius' speech in Shakespeare's 'Hamlet'.

    Seriously, I would strongly agree - do not mix business with family!!!!
    [FONT=Times New Roman, serif]Æ[/FONT]r ic wisdom funde, [FONT=Times New Roman, serif]æ[/FONT]r wear[FONT=Times New Roman, serif]ð[/FONT] ic eald.
    Before I found wisdom, I became old.
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