What are the chances I will owe my sister money that our deceased brother lent me?

[gander23]

What is the name of your state? California

So my sister and I had a brother who passed away a year ago. My sister and I met up for the anniversary the other day. We were reminiscing about our brother when I had perhaps naively mentioned how our brother lent me money to finish school and never let me pay him back. He kept pushing it off each time I brought it up. First saying that I had to finish school, then that I had to get settled, then that I had other things to save up for, and so forth. Truthfully I don't believe he expected or wanted me to pay him back.

But my sister having just learned this is now demanding I give her half the money he lent me and if I don't give it to her she will take me to court. She believes she is owed half the debt he had over me because as our brother's only living relatives we were to split whatever he had left. Our brother however knowing for awhile that he was dying had sold all his assets and spent practically all his money. In the end there was only a couple thousand. She was quite unhappy about that and that's why I think she is pushing me to pay her.

I should also mention that my sister does not know exactly how much money our brother lent me. Although given that I went to medical school she has reason to believe it was a lot. I have all his personal and financial paperwork though and there is nothing that mentions this debt. Given that how seriously should I take my sister's threat?

 

[LdiJ]

What is the name of your state? California

So my sister and I had a brother who passed away a year ago. My sister and I met up for the anniversary the other day. We were reminiscing about our brother when I had perhaps naively mentioned how our brother lent me money to finish school and never let me pay him back. He kept pushing it off each time I brought it up. First saying that I had to finish school, then that I had to get settled, then that I had other things to save up for, and so forth. Truthfully I don't believe he expected or wanted me to pay him back.

But my sister having just learned this is now demanding I give her half the money he lent me and if I don't give it to her she will take me to court. She believes she is owed half the debt he had over me because as our brother's only living relatives we were to split whatever he had left. Our brother however knowing for awhile that he was dying had sold all his assets and spent practically all his money. In the end there was only a couple thousand. She was quite unhappy about that and that's why I think she is pushing me to pay her.

I should also mention that my sister does not know exactly how much money our brother lent me. Although given that I went to medical school she has reason to believe it was a lot. I have all his personal and financial paperwork though and there is nothing that mentions this debt. Given that how seriously should I take my sister's threat?

Not seriously at all. Had your sister been a creditor of your brother (ie he owed her money) then maybe if she opened probate for his estate and pursued your debt to him as an estate asset that needed to be collected to pay off one of his creditors then maybe she would have a leg to stand on.
However, your brother chose not to collect the debt from you, and you are right, he probably never wanted you to pay him back at all. Therefore her threat is pretty empty. She herself could not sue you directly, she has no standing.

 

[PayrollHRGuy]

If you take her threat and a couple of dollars you can buy yourself a coffee.

 

[Bali Hai Again]

What is the name of your state? California

So my sister and I had a brother who passed away a year ago. My sister and I met up for the anniversary the other day. We were reminiscing about our brother when I had perhaps naively mentioned how our brother lent me money to finish school and never let me pay him back. He kept pushing it off each time I brought it up. First saying that I had to finish school, then that I had to get settled, then that I had other things to save up for, and so forth. Truthfully I don't believe he expected or wanted me to pay him back.

But my sister having just learned this is now demanding I give her half the money he lent me and if I don't give it to her she will take me to court. She believes she is owed half the debt he had over me because as our brother's only living relatives we were to split whatever he had left. Our brother however knowing for awhile that he was dying had sold all his assets and spent practically all his money. In the end there was only a couple thousand. She was quite unhappy about that and that's why I think she is pushing me to pay her.

I should also mention that my sister does not know exactly how much money our brother lent me. Although given that I went to medical school she has reason to believe it was a lot. I have all his personal and financial paperwork though and there is nothing that mentions this debt. Given that how seriously should I take my sister's threat?

If she were my sister I would cease any and all reminiscing with her.

 

[Taxing Matters]

What is the name of your state? California
I should also mention that my sister does not know exactly how much money our brother lent me. Although given that I went to medical school she has reason to believe it was a lot. I have all his personal and financial paperwork though and there is nothing that mentions this debt. Given that how seriously should I take my sister's threat?

You don't owe your sister anything. If she sued YOU you could move to dismiss because you are not the proper party for the claim as well as stating your defense that you don't owe her anything. You borrowed the money from your brother, and it is his estate that that would have to seek to get this "loan" repaid. The problem with that is that from the sound of it the loan was made many years ago and the agreement was oral. If CA is the proper jurisdiction for the loan lawsuit, it had to be brought within 2 years from the date the loan contract was breached. If your brother missed that time period than the estate would have the defense that the statute of limitations has tolled and thus no longer can collect from you.The estate would have to pay attorneys fees for all this, and that would likely wipe out the few thousand you said he had left at his death. Bottom line is unless you've left something important out, I don't see that she has a claim to pursue here. If she consults a lawyer she will quickly find out the difficulties she has in going after this. That may put her off the idea.

She's hurt that your brother didn't leave her more. It was his property to do whatever he wanted with it. She wasn't entitled to get anything from him and her sense of entitlement suggests she thought more about what she feels he should have given her than she did about him. He could have given it to charity. It would not mean that he loved either of you any less. If she were my sister I'd reconsider just how much involvement I have with her going forward. At least until her anger fades I can foresee any social things with her as being rather tense.

 

[zddoodah]

Given that how seriously should I take my sister's threat?

The only person in a position to answer that question is you, but I'll answer the question of how likely it is that she might recover.

First of all, your sister has no standing to sue you. You didn't borrow the money from her. The money was owed (if at all) to your brother, so the debt is an asset of his estate. In order to maintain a lawsuit against you, she would have to seek appointment by the probate court as personal representative of your brother's estate.

Second, it's not clear from your post whether the "loan" was actually a loan or a gift. What evidence exists regarding the loan? Did you sign a promissory note? I assume that there was one or more check written. However, if the loan was made more than seven years ago, the bank(s) involved aren't going to have records that old.

Third, even if it was a loan, what were the repayment terms?

Fourth, even if it was a loan, it sounds like maybe the loan was forgiven.

Fifth, even if it was a loan and it wasn't forgiven, has the statute of limitations expired? The statute of limitations is either 2 or 4 years from the date of breach, depending on whether the loan agreement was verbal or in writing (possibly extended to six months after your brother's date of death, pursuant to section 366.1 of the California Code of Civil Procedure).

With all that said, the chances that your brother's estate could successfully sue you seem incredibly slim. Do you think your sister will go to the effort and expense of opening probate for your brother's estate and then hiring a lawyer to sue you? Keep in mind that, since your brother's estate is apparently otherwise insolvent, she'd likely have to come up with a $10-20k retainer to get a lawyer to take the case. Does she have the means to do that, and is the amount the estate might stand to recover enough to warrant the time and effort of a lawsuit that only has a minimal chance of success?

 

[gander23]

The only person in a position to answer that question is you, but I'll answer the question of how likely it is that she might recover.

First of all, your sister has no standing to sue you. You didn't borrow the money from her. The money was owed (if at all) to your brother, so the debt is an asset of his estate. In order to maintain a lawsuit against you, she would have to seek appointment by the probate court as personal representative of your brother's estate.

Second, it's not clear from your post whether the "loan" was actually a loan or a gift. What evidence exists regarding the loan? Did you sign a promissory note? I assume that there was one or more check written. However, if the loan was made more than seven years ago, the bank(s) involved aren't going to have records that old.

Third, even if it was a loan, what were the repayment terms?

Fourth, even if it was a loan, it sounds like maybe the loan was forgiven.

Fifth, even if it was a loan and it wasn't forgiven, has the statute of limitations expired? The statute of limitations is either 2 or 4 years from the date of breach, depending on whether the loan agreement was verbal or in writing (possibly extended to six months after your brother's date of death, pursuant to section 366.1 of the California Code of Civil Procedure).

With all that said, the chances that your brother's estate could successfully sue you seem incredibly slim. Do you think your sister will go to the effort and expense of opening probate for your brother's estate and then hiring a lawyer to sue you? Keep in mind that, since your brother's estate is apparently otherwise insolvent, she'd likely have to come up with a $10-20k retainer to get a lawyer to take the case. Does she have the means to do that, and is the amount the estate might stand to recover enough to warrant the time and effort of a lawsuit that only has a minimal chance of success?

We did use the word loan when we discussed it. There is no physical evidence of the loan though. I promised to pay him back, but I never signed anything. He would write a check to me every year, but the last check was over 10 years ago. There weren't any repayment terms. Every time I brought it up my brother came up with some reason for us to talk about it later.

I would of said it was doubtful she was bluffing about taking me to court, but she doesn't have that kind of money to pay a lawyer up front. The amount would probably make it worth it to her though.

 

[gander23]

You don't owe your sister anything. If she sued YOU you could move to dismiss because you are not the proper party for the claim as well as stating your defense that you don't owe her anything. You borrowed the money from your brother, and it is his estate that that would have to seek to get this "loan" repaid. The problem with that is that from the sound of it the loan was made many years ago and the agreement was oral. If CA is the proper jurisdiction for the loan lawsuit, it had to be brought within 2 years from the date the loan contract was breached. If your brother missed that time period than the estate would have the defense that the statute of limitations has tolled and thus no longer can collect from you.The estate would have to pay attorneys fees for all this, and that would likely wipe out the few thousand you said he had left at his death. Bottom line is unless you've left something important out, I don't see that she has a claim to pursue here. If she consults a lawyer she will quickly find out the difficulties she has in going after this. That pay put her off the idea.

She's hurt that your brother didn't leave her more. It was his property to do whatever he wanted with it. She wasn't entitled to get anything from him and her sense of entitlement suggests she thought more about what she feels he should have given her than she did about him. He could have given it to charity. It would not mean that he loved either of you any less. If she were my sister I'd reconsider just how much involvement I have with her going forward. At least until her anger fades I can foresee any social things with her as being rather tense.

What if there was no time period for the loan?

 

[Litigator22]

What if there was no time period for the loan?

The "legal what if" is that a loan without an expressed/fixed maturity date is due and payable within a ''reasonable period of time".

 

[zddoodah]

There is no physical evidence of the loan though. I promised to pay him back, but I never signed anything. He would write a check to me every year, but the last check was over 10 years ago. There weren't any repayment terms.

In a situation like this, a court would imply that repayment was to be made with a "reasonable time." It's impossible to predict accurately what a judge (or jury) might decide is "reasonable" given what I assume is a substantial amount of money given to a person (you) who I assume is now a relatively high-earning individual. Nevertheless, I think you'd have a reasonably strong argument that the statute of limitations has expired.

At this point, you'll just have to wait and see what happens.

 

[LdiJ]

And besides the fact that there are those arguments, once again, an argument can be made that your brother intended the loan to be forgiven. The fact that he kept putting off any discussion of repayment is an argument to that effect. Is your sister jealous of the lifestyle that you have due to your career? Is she seriously suffering financially? It seems extreme for her to take the position she is taking with you. Nevertheless the threat is virtually empty.

 

[gander23]

And besides the fact that there are those arguments, once again, an argument can be made that your brother intended the loan to be forgiven. The fact that he kept putting off any discussion of repayment is an argument to that effect. Is your sister jealous of the lifestyle that you have due to your career? Is she seriously suffering financially? It seems extreme for her to take the position she is taking with you. Nevertheless the threat is virtually empty.

She’s definitely not as well off as me, but I think it has more to do with lingering feelings of resentment due to favoritism.