Estate Law Questions? Ask an Estate Lawyer.
Hi, I will be happy to assist you, and it is my goal to make you a very satisfied customer! This may take a few minutes, so thanks for your patience.
I am an Oklahoma attorney and practice almost exclusively in the estate/trust/probate arena. Yes, this is legal and is actually very typical if the person that owes the estate money does not have a ready source of cash to pay the loan. The person essentially pays the loan at the time the estate is ready for distribution. At that time, the person simply forgoes a portion of the estate that he would have received had he not owed the money. This is legal and generally accepted. I do understand your hesitancy based on his initial denial of owing money, but if he is signing a document saying he does owe it to the estate and that it will be paid out of his share of the estate at the time the home is sold, the estate has liquid assets, and the asets are ready to be distributed, then that is really the best solution.
Does it matter that he wrote up the note as a secured promissory note? I I ask this because he is not specifically offering any collateral. Is there any reason why he would elect to have the note governed by Colorado and not Oklahoma and does this note need to be notarized?
If he has included terms saying Colorado law controls, he's trying to make it more difficult to enforce since we're talking about an Oklahoma estate, but an Oklahoma court could still enforce the note and apply Colorado law. If that language is not present, there most likely is nothing really to worry about. However, that's impossible to say without actually reviewing the note. It is not a secured note if there is no collateral so it doesn't matter whether it's titled as a "secured" note or not. The important thing is that there is something in writing saying how much is owed and when and how it will be paid to the estate. It's not legally necessary that it be notarized but is always a best practice and you should insist that it be notarized.
Thank you so much. I really appreciate your help.
You're very welcome. I'm glad I could help. I would be grateful if you could please leave me a positive rating for my assistance. Thanks so much and have a great day!