Will my siblings and I share equally in my mother’s estate if they’ve borrowed money from her?

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Will my siblings and I share equally in my mother’s estate if they’ve borrowed money from her?

My mother has $300,000 in the bank, a large house, several plots of land and 10 rental houses. My 2 siblings have each borrowed $100,000 from mother; I’ve never borrowed from her. When she dies, how will things be dispersed? Would I get the $300,000 to settle up the debts and then get equal thirds as property is sold? Or will my siblings get their share with their debts being cleared at the last payment?

Asked on March 28, 2011 under Estate Planning, North Carolina

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Since you mention no Will I assume that there in none.  In such a case, your mother will die "intestate".  Accordingly the laws of the state in which she is domiciled as of the date of hedeath will control the distribution of her estate.  Typically, it is between a surviving spouse, if any, and the children of the deceased.  If only her 3 children survive her, your are right in stating that each will receive a 1/3 share.   

However, your mother's debts will first be paid out of the proceeds of the estate.  Then each heir will receive their full share.  No deductions for gifts will be made.  If these amounts were loans, then there should be something in writing evidencing this before your mother passes. Then the heirs share could be decreased by the loan amount (plus any interest, etc). Even better would be to have your mother execute a Will so that all of her intentions as to this and other estate matters are made known.  This way her estate will be distributed as per her wishes; not as per the state's.


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