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Ask Law Educator, Esq. Your Own Question
Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Estate Law
Satisfied Customers: 118722
Experience:  Experienced in Trust and Succession Law, including Louisiana Laws
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My wife and i are going to borrow a sum of money from her

Customer Question

My wife and i are going to borrow a sum of money from her inheritance. The money will be in the form of a 90 day loan from a line of credit that will be taken out by my wife's brother the POA for her mother's trust. Should the details of the loan be put into a promissory note or a loan agreement?
Submitted: 1 year ago.
Category: Estate Law
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
The details of the loan, including the repayment plan should be in the loan agreement. In the promissory note, you would state the promissory note would incorporate the loan agreement by reference and in case of a dispute the loan agreement would be the governing document. This way, if they record the promissory note the details of your agreement would not be part of the public record.
Customer: replied 1 year ago.
I'm not sure I understand your answer. I am not taking out the line of credit, my brother in law the POA is. He is lending my wife and I the money from the line of credit for 90 days. We are to pay it back within 90 days with prorated interest. (we are selling our home) If we fail to do that in 90 days then the entire amount will be deducted from my wife's inheritance. My original intent behind my question was to determine if the agreement between my wife and I should be a loan agreement or a promissory note. Please advise
Customer: replied 1 year ago.
Sorry, my wife and I and her bother the POA
Expert:  Law Educator, Esq. replied 1 year ago.

Thank you for your reply.

I understood it would be a personal loan, but in most cases there are both a loan agreement and then a promissory note, two document. In a case like you describe, if you want to combine them into one, the proper title of your document would be Agreement and Promissory Note and you would combine the terms that would normally be in the agreement with the wording of the promissory note all in one document, which would be a bit shorter than doing two documents.