Conditional Inheritance

[PinkDalek]

If the Will leaves the residue equally to the children, I can't see why it needs to be changed. The important thing is that the loan is properly documented so that it is a clear legal asset of the estate ( an amount due from the son). This asset would then have to be recovered by the executor by way of offset against the amount due to the son from his share of the residue. ... Unfortunately if the son has not already signed a document acknowledging that it was a loan, he probably will refuse to sign such a document now.

It is unclear to which post or reply you are commenting upon.

The older loan between Mother and Son, mentioned in the OP's later reply, would not really appear to be the main point.

The OP is asking about a loan (and any future loans) between a Sister and her Brother (documented by way of a promissory note, as per the OP), which at this stage would have nothing to do with the Executor(s).

[Maylix]

If the Will leaves the residue equally to the children, I can't see why it needs to be changed. The important thing is that the loan is properly documented so that it is a clear legal asset of the estate ( an amount due from the son). This asset would then have to be recovered by the executor by way of offset against the amount due to the son from his share of the residue. ... Unfortunately if the son has not already signed a document acknowledging that it was a loan, he probably will refuse to sign such a document now.

It is unclear to which post or reply you are commenting upon.

The older loan between Mother and Son, mentioned in the OP's later reply, would not really appear to be the main point.

The OP is asking about a loan (and any future loans) between a Sister and her Brother (documented by way of a promissory note, as per the OP), which at this stage would have nothing to do with the Executor(s).

Quite so. Any loans between the Mother and any of the siblings can be documented and MUST be taken account of by the executors, 'netted off' against any inheritance if you will (provided of course the loans are less than the inheritances), quite easily.
The difficult issue is loans between the siblings that the mother would want to repay out of the share of debtor sibling (brother) and to the creditor sibling (younger sister).

Thanks
Maylix

[gryffron]

Why not deduct DOUBLE the value of any outstanding family loans from the inheritance. That might give him some incentive to pay off the loans BEFORE mum snuffs it.

[Clitheroekid]

Imagine there's four adult siblings with one parent (mother)still alive.
Elder brother needs £20K to get out of a hole and asks younger sister for a short term (4 months) loan under a promissory note. Sister is not keen but is swayed by the mother who says 'If he doesn't pay you back I'll see you get it out of his inheritance when my estate gets shared out between the four of you', so she loans him the money.
She also tells the mother not to mention her assurances to the brother as the brother will just use that as an excuse not to pay her back, and she will have to wait, maybe several years before getting her money.
Assuming that the mothers estate will probably be worth £400K, and the intention under her current will is an equal 4-way split between the siblings, my question is: can the mothers will be changed to reduce the inheritance to the brother and increase to the sister if the loan hasn't been repaid by that time.

The short answer is yes, it would be possible.

It would be dealt with in the clause dividing the residual estate, and would say something like:

1. I give the residue of my estate to be divided into four equal shares such shares to be held on the following trusts:
1.1 as to one such share for my son Alfred
1.2 as to one such share for my son Bertram
1.3 as to one such share for my daughter Chloe
1.4 as to the remaining such share for my daughter Daisy
provided that the share of Alfred shall be reduced by the sum (if any) ("the Debt") that he owes at the date of my death to Chloe and that the share of Chloe shall be increased by the amount of the Debt.

Assuming the whole £20k debt was outstanding at the date of death A would receive £80k and C would receive £120k.

This wording is just off the top of my head, and may have to be tweaked in an actual Will, but it illustrates at least one way of achieving the desired result.

And assuming it can, does anyone see any (legal) problems with the brother not knowing about this arrangement until the will comes to be executed?

No. The amount of the entitlement is quite clear, though obviously the daughter would have to keep an accurate record of any repayments.