Equity line of credit debt.

[4relvr]

What is the name of your state (only U.S. law)? Calif.

My MIL passed away recently and had a living trust drawn up by her attorney in 2005. In the trust she leaves all her assets including her home to her two siblings (my wife and her brother).

After having her trust written she opened up an equity line of credit for $250,000.00 limit through her mortgage company (b of a)

This was never entered into her trust, but it is secured by the equity in her home, which was paid off in 1999.

Her home is worth approximately 575K

When she passed away she left a $182,000.00 debt on her line of credit which she had been paying on since 2006. This debt wasn't entered into her trust.

Also in her trust she made it clear that it was to be a fair and equal division between siblings.

My wife looked into where the 182k was spent and found that her brother had received money many times from his mother, all against her house through the line of credit. That total over the years is approximately 170K, with the remaining 12K she used fixing up her house. Two of the amounts were over 150K. One for a boat (30K) and one for a down payment on a house (120K).

My question is, is my wife responsible for half of the 170K debt given to her brother even though she didn't benefit from it directly or indirectly? I know she is liable for the remaining 12K.

Thanks.

 

[curb1]

What did your brother-in-law say about this when your wife called him? Does he acknowledge a responsibility for these transactions?

 

[4relvr]

What did your brother-in-law say about this when your wife called him? Does he acknowledge a responsibility for these transactions?

Thank you for the response.

My wife hasn't asked him about this matter yet. She is waiting to see what their first meeting with my MIL's estate attorney has to say.
I'm not sure if he was aware at that time that the funds he received were from his mothers E L of Credit. He's aware of it now though but has yet to comment on it to my wife. My wife and I both don't think he will voluntarily accept responsibility for this debt unless he is forced to.

 

[tranquility]

What is the name of your state (only U.S. law)? Calif.

My MIL passed away recently and had a living trust drawn up by her attorney in 2005. In the trust she leaves all her assets including her home to her two siblings (my wife and her brother).

After having her trust written she opened up an equity line of credit for $250,000.00 limit through her mortgage company (b of a)

This was never entered into her trust, but it is secured by the equity in her home, which was paid off in 1999.

Her home is worth approximately 575K

When she passed away she left a $182,000.00 debt on her line of credit which she had been paying on since 2006. This debt wasn't entered into her trust.

Also in her trust she made it clear that it was to be a fair and equal division between siblings.

My wife looked into where the 182k was spent and found that her brother had received money many times from his mother, all against her house through the line of credit. That total over the years is approximately 170K, with the remaining 12K she used fixing up her house. Two of the amounts were over 150K. One for a boat (30K) and one for a down payment on a house (120K).

My question is, is my wife responsible for half of the 170K debt given to her brother even though she didn't benefit from it directly or indirectly? I know she is liable for the remaining 12K.

Thanks.

Wife isn't responsible for it, the building securing it is if the estate outside of the trust does not have the assets to repay all the money. As to where the money went, that is not really relevant here.

 

[4relvr]

Wife isn't responsible for it, the building securing it is if the estate outside of the trust does not have the assets to repay all the money. As to where the money went, that is not really relevant here.

The remainder of her estate, in or outside, does not have the funds to pay off the ELOC. Since my wife inherits half of the "building", then she in essence is liable for 1/2 the debt on it, correct?

So does the remainder of my MIL's assets go to help pay down the ELOC debt equally among the trustees?(wife and brother)

 

[4relvr]

Wife isn't responsible for it, the building securing it is if the estate outside of the trust does not have the assets to repay all the money. As to where the money went, that is not really relevant here.

Do you mean it's not relevant who did or didn't benefit from, or where the funds went from the ELOC?

 

[Zigner]

Do you mean it's not relevant who did or didn't benefit from, or where the funds went from the ELOC?

Both. Now, the brother may owe the estate the money, but the fact that it was obtained by use of the LOC has no bearing on that.

 

[curb1]

Who is the trustee for the trust?

 

[4relvr]

Both. Now, the brother may owe the estate the money, but the fact that it was obtained by use of the LOC has no bearing on that.

May owe?

What criteria is used in determining this?

 

[Zigner]

May owe?

What criteria is used in determining this?

Was it a loan?

 

[4relvr]

Who is the trustee for the trust?

The MIL made both siblings as co-trustees

 

[4relvr]

Was it a loan?

Not a loan

 

[Zigner]

Not a loan

So, the lady decided to give a gift to her son.

 

[4relvr]

Not a loan

However, when he received the 120K, the MIL was diagnosed to be in the beginning stages of Altzeimers

 

[curb1]

Does brother-in-law have the financial ability to make this right? If it was a gift, the money is his.