Indiana, PA - Indiana County

SMART MONEY: This 'loan' looks more like a gift

by on April 13, 2014 1:50 AM

DEAR BRUCE: My brother has fallen on hard times and has asked for a $5,000 loan because he says his house will go into foreclosure. He says he will pay us back, but if history is any indication, he won’t keep his word.

I don’t want him to lose his house, and I have thought about setting up a payment plan for him. Your thoughts? — Reader, via email

DEAR READER: Your brother’s track record indicates that if you decide to lend him $5,000, that money is likely to go out the window. If you can live with that, then OK.

Even if you come up with a payment plan, how are you going to ensure he makes the payments on time? If the house were paid for, you could certainly take back a mortgage, but apparently it is not; otherwise, there wouldn’t be an opportunity for another lender to foreclose.

This is a matter of whether you can afford to give your brother $5,000. If not, as much as you might like to help, keep your checkbook closed.

DEAR BRUCE: I have a brother who has about $1 million. His wife passed away, so he is taking her name off of all his investments. He doesn’t want his stepchildren to get any of it.

He asked me what he should do.

As his sister, he gives me a little once in a while, but I can’t tell him to put my name on it. That would probably make him mad! He doesn’t have a will and doesn’t want one.

What happens to his money after his demise? Who can claim the money, and how do we get it? — T.B., Omaha, Neb.

DEAR T.B.: Your brother doesn’t have a will and doesn’t want one. The question here is, why not? Without a will, who can say where his money will go after his demise?

As his sister, you may very well have the entire claim, but I don’t know that; other family members may be involved. One thing is certain: It’s a lot more difficult to dictate how an estate is distributed without a will than with one.

A will would spell out clearly whom your brother would like to receive his money when he leaves this earth. If he’s not willing to draw a will, I can’t answer your question definitely, and neither can anyone else.

If he dies without a will, who knows? His stepchildren may have some kind of claim.

That possibility should goad him into getting a properly spelled-out will.

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