How to record a loan

Strangie

My mum died a couple of weeks ago and I'm currently up to my eyeballs in paperwork. My brother and I wanted to sort everything ourselves after hearing horror stories of lawyers dragging their heels and charging shocking fees.

I've come across something I don't know how to record...

When my mum retired 3 years ago, she got a lump sum. She loaned me £14,000 (with no paperwork) for postgraduate study. A couple of months later, within the same tax year, her car died and she needed money for a new one. I told her that I wasn't going to apply to study that year so she had £7000 back for a new car. Things changed and I ended up not studying (actually, most of it went on a holiday to Vegas). Of the original £14k, I still owe about £3,800. There's a bank account trail of money leaving my account and going to hers over the last couple of years so I can prove that I've been paying it back.

So... my question is this... do I just include the £3800 as an asset on her estate to be split between me and my brother? Or should I pay it all into her account right now (with hubby's help I can do this). Or will it need to be listed as some kind of gift that she would still receive the benefit of?

What is the most simple, expedient, stress-free way of dealing with this? I'm worried this will cause probate to go on forever.

Total assets (incl house and car) are worth about £190k including the remaining loan so no IHT I believe.


Thank you.

Keep_pedalling

Just record it as a debt owed to the estate, and adjust the amount you receive from the estate accordingly.

You mum's bank should have been informed of her death and her accounts should now be frozen, so paying into her account should not be an option.

dresdendave

Basically you owed your mum £3800 and the estate is a 50/50 split with your brother?


Seems a bit OTT finding £3800 to pay into the estate so that some point in the future you each get £1900 back. Why not just arrange with your brother that when the estate is split you will pay him £1900 as a private arrangement.