Family loan tied in with inheritance

enthusiasticsaver

I don't think a DOV is appropriate in this case but to be on the safe side you should check with a solicitor. If you are insistent on doing this I would do that anyway to get a proper loan agreement drawn up.

A deed of variation is usually drawn up to vary terms of a will, say to divert a particular asset to someone not named or introduce a new beneficiary so this is not the case with the £25k you are lending FROM YOUR OWN MONEY to your brother. You are relying on him using his inheritance to repay it and that is the only connection with the estate.

Jenniefour

DOV definitely not, not appropriate. If you want to lend the money then legal agreement with the terms written in, including loan to be repaid when sale of house is completed and estate can be settled. You need to make sure the money is recoverable in the (unlikely, but not unknown) event that something untoward happens to your brother before it's repaid.

Good idea to seek legal advice. In your situation most folks would say no - it's not your job to bail out any beneficiaries who are making premature plans.

Tom99

[FONT=Verdana, sans-serif]The OP is willing to lend brother £25k but want to know how best to document the repayment of this money when parents house sold.

[/FONT] [FONT=Verdana, sans-serif]A DOV between brother and OP which will say:

[/FONT]

• [FONT=Verdana, sans-serif]OP gives brother £25k[/FONT]
• [FONT=Verdana, sans-serif]Brother transfers £25k of his inheritance to OP[/FONT]
• [FONT=Verdana, sans-serif]OP, as executor, agrees to administer estate in accordance with DOV[/FONT]

[FONT=Verdana, sans-serif]
The DOV deals with the repayment of the 'loan' in a way they both agree should happen and neatly gets round the need for any normal loan / repayment document – there are no loose ends to go wrong such as with a normal family loan, like when one party dies or does not repay the loan.

[/FONT] [FONT=Verdana, sans-serif]The deed would not be valid for IT/CGT purposes but tax is not an issue as far as I can see.

[/FONT] [FONT=Verdana, sans-serif]The deed would need to be draw up by a solicitor so OP can at least explore the option that way. A simple deed might be 1 or 2 hours work but this is a bit more complicated so I expect would be a bit more.[/FONT]

HelenFlowers

Thanks again all. much appreciated, I will have a chat with a legal bod and sort it that way.

Lungboy

£25k to "cover the costs of his mortgage renewal"? That sounds odd.