Loan from daughter
Watch this postI sold the family home, made a small profit and moved into a bungalow. Bungalow has needed updating and is draining my resources. My daughter has loaned me £20,000 and will be paid back from the estate when I die. Are there any pitfalls for her.
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First of all, I am not a legal expert so my comments are purely from a common sense point of view. I'm assuming that you are a widow and that your daughter is your only child. If this is correct then I would write down that she has loaned you £20,000 for your life-time and that this will be repaid to her, from your estate, when you die, before any other legacies are paid out. I think that you should both sign and date this document in front of an independent witness and both of you keep a copy.
If your daughter is not an only child, then her siblings should be aware of your arrangement so that they understand that this daughter has a prior claim on the first £20,000 of your estate. Does your daughter have children and are are they legatees in your will? If your daughter died before you, then they should be aware of this arrangement. Also, if your daughter's financial situation changed and she needed an immediate repayment, how would this work out for you?
Hopefully, other members of SS will add to your post and you will be able to make a decision re the benefits and the pitfalls of this generous offer from your daughter.
Carole