Inheritance: How should they handle this situation?

Question

My grandfather died in February 2008. My dad and his two sisters are equally listed in the will...everything is split in thirds between the siblings. My grandfather had an insurance policy (whole life). One sister borroweed $2000 against the policy for her own needs before my grandfather died. She did not pay this money back; thus the policy is $2000 less than the original amount. Should the amount she borrowed be taken out of her part or should the siblings just split what is left in thirds?

Answer 1

I would say out of her part.  Essentially, she just took part of her inheritance early.

Answer 2

She can't borrow that money, unless she is the policy owner.  If she is the policy owner, then the payout should be split three ways, as specified.  

If she is NOT the policy owner, she didn't borrow the money - your grandfater did, and the payout should be split three ways, as specified.

Luckily, this isn't up to you guys to decide - the insurer will pay the beneficiaries, exactly how the policy designates - 1/3 each, of the payout amount.

Answer 3

Unfortunately your question is the textbook example for why people who give others their powers of attorney need to be incredibly careful.  I agree with the answerer who said that the will only can divide what exists now---after your grandfather died.  Perhaps your father and other aunt can consult an attorney regarding the mortgage on the house--this may have been done fradulently--and perhaps they can sue for their shares of that.  As far as the credit card bills go, if your aunt had the power of attorney, she is not legally obligated to pay back the money or have it deducted from her share of the estate.

Answer 4

The will was not in effect until your grandfather died.  The estate is defined as the assets he had at that moment.  Whatever happened before then is not relevant as far as division of assets.  The lawyer who is handling this should have explained it to you.

Answer 5

The sister should have offered to put $2k back in the pot.

Although she(sister) may reason that the 2k was not part of any inheritance, but just your grandfather's money to do with as he pleased.

I'm rambleing.

Yes, money should be taken out of her share.

But, if this is going to cause problems, just let it slide.

Answer 6

First of all, let me say, sorry for your loss.

I don't understand why people think that their parents owe them anything, or they are entitled to it.  He could have left them nothing  but the cost to bury him. Also, they should be grateful he didn't and be satisfied if they get a penny much less a dime. Forget about the 2gs, your aunt needed it and your grand dad let her have it. Split the remaining amount between the three like the will states. People are so picky when it comes to money that's not theirs, yet.

Just my opinion, have a nice day.