From our “Ask a Question” Mailbag: Delaware County Rules on Loans versus Gifts

Most Recently Updated July 22, 2018.

“My sister and her husband are always broke. They asked my father for a loan to help them pay off a bunch of debts and he gave it to them. They were supposed to repay him monthly, but only sent him one or two payments over the years. Now that he has died, I am the Personal Representative of his estate and I asked for them to repay the loan. Suddenly, they claim these loans were “gifts”. What can I do?”

Delaware County Rules on Loans versus Gifts

Delaware County Rules on Loans versus Gifts

One of your jobs as Personal Representative is to gather together all the Estate’s assets. Any loans your father may have made are an asset of his Estate, so you have the power (and obligation) to collect the debt. In order to fulfill this duty, you have the right to use Estate funds to hire an attorney to help you.

This attorney can use his or her expertise in probate to examine the paperwork, cancelled checks, and those one or two payments your sister made. The attorney will then advise you of the strength of your position that the transfers were loans. If the evidence exists, your attorney will then prepare a formal accounting that reduces your sister’s share by amount of the loan, or that gives her the loan as part of her inheritance. If your sister refuses to agree to this characterization, you are now ready to present your case to the judge.

More Probate Questions?

Distinguishing loans and gifts is only part of the overall probate process. By all means, if you wish to learn more, please read my more detailed article, The Probate Process All You Need to Know.

In Conclusion: Delaware County Rules on Loans versus Gifts

I hope that this article was helpful in explaining how to distinguish between loans and gifts. Further, I included links to even more detailed information on my website. Therefore, please contact me and let me know how I did. Certainly, your comments and questions are welcome!

Let our Probate Lawyers help walk you through what can be a confusing process. To begin with, call to speak to one of our experienced Probate Attorneys.  By all means, our lawyers are ready to answer your questions. In fact, feel free to contact our office for a free consultation. Ultimately our goal is to make the process as painless as possible!

Wills, Trusts, Probate, and Estate Litigation, It’s All We Do!

Tags: Delaware County, Formal Accounting, Informal Accounting, Pennsylvania, Probate, Probate Attorney, Probate Lawyer