outstanding debit owed to an estate

[ksmiles]

Jurisdiction

Ontario

My sister approached my mother for a very large loan for her daughter against all of the families wishes. The sister stated on many occasions that the loan was on her if her daughter couldn't pay it. Mom has passed away without the loan being payed back. If my niece can not pay it who is responsible for it? I have two siblings and the will states everything be split in 3 with no mention of the loan. Should it come out of my sisters third?

 

[adjusterjack]

The following comments are based on US law. My guess is that Canadian law is similar.

Depends on who the check was made out to. That would be the person responsible. If it was the sister the estate may have to sue the sister for the money as part of the probate process and get a judgment in favor of the estate before the estate can legally offset the debt.

The executor or personal representative of the estate can certainly delay distributing the estate until the lawsuit is resolved. Doing so will put pressure on the sister to either pay the debt back or sign a settlement agreement reducing her share of the estate by the amount of the loan.

Sorry, but you cannot withhold her share without a judgment and you cannot hold it hostage.

I suggest you consult a probate attorney. Get it wrong and the estate could have catastrophic financial consequences.