My Mother in law (mil) has a trust and two LLCs. She has two sons who will, upon her death, receive half of what she has. The properties she has will be divided between them. My question is that her one son owes her trust 140,000 for one of the houses she has. That he will be getting anyways when she dies But she doesn't want him to have it until he pays what he owes on it. How does that work when she dies does the other son get it until he pays it off? or does the first son just pay the second son half of what he owed on it. 70,000. if that is the case then he doesnt pay the trust what he originaly owed.
Good Morning:
There is a lot of nuance in your question. Did your mother-in-law establish and document this debt with her son on the one house? Does he have possession of the property? Is there any documentation in the Trust that dictates the son must pay for the home or the gift goes to someone else (in this case possibly the other brother)?
If there is no language in the Trust or documentation from the mother that the son must purchase the residence from the trust, then he will likely take the property per the terms of the trust. In short, the terms of the Trust will dictate what happens to the property in it once the grantor (in this case, your mother-in-law) dies. If the Trust terms require the son(s) to purchase the home or it goes to someone else or the successor trustee has to sell it, then that's what will happen.
If the trust is unclear on this point and it's important to your mother-in-law, I recommend she change the terms of the trust to ensure it includes this stipulation and what will happen should the son not purchase the property from the trust. This can be accomplished through an amendment (not recommended) or a restatement of the trust (recommended).
Best wishes!
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