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2_little_boys

Inheritance split

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2_little_boys

So I have been trying to work this out.  

If someone passes away and have say $100k in the bank.  Currently just looking at cash, not household, car, etc.

They have 3 beneficiaries - funds to be split equally.

Problem being -

Beneficiary 1 had borrowed money and whilst paying it back still owed about $10k

Beneficiary 2 had borrowed money and whilst paying it back still owed about $15k

Beneficiary 3 (and also executor) had not borrowed.

How would it be calculated (maths is clearly not my strong point)? 

There is nothing in writing about these loans but #1 & #2 both agree that it should be repaid but dont have the funds to repay a lump sum.

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JRA

The challenge will be if nothing is in writing, assume that is correct, and they are happy to pay back.

In fact you need to assume the person has 125K in the bank (as it is 100+ the loans to the beneficiary) which if divided by 3 is 41.6K.  

Instead of Beneficiary 1 getting 41.6 K they only get 31.6, beneficiary 2 get 41.6-15K =  26.6 and the 3rd gets all 41.6K

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got my tinsel on

What JRA posted.  That's how I had worked it out.  But for the loans the estate would have had $125K in cash.

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2_little_boys
2 minutes ago, JRA said:

The challenge will be if nothing is in writing, assume that is correct, and they are happy to pay back.

In fact you need to assume the person has 125K in the bank (as it is 100+ the loans to the beneficiary) which if divided by 3 is 41.6K.  

Instead of Beneficiary 1 getting 41.6 K they only get 31.6, beneficiary 2 get 41.6-15K =  26.6 and the 3rd gets all 41.6K

OMG that is so much easier than I was making it out to be 

Thank you so much.

Both that had borrowed money are adamant (Im one of them) that it will be repaid to the asset pool but neither of us can repay it in a lump sum. We know that if we chose not to there is probably not much that can be done but we are quite close and wouldnt do that to each other.

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Sugarplum Poobah
Posted (edited)

Ok,  so the assets you're looking at are:

$100,000 + $10,000 + $15,000 = $125,000 (nominally what these assets would be if the loans were paid off. 

So,  $125,000 ÷ 3 = $41,667 

Beneficiary  1 gets $31,667 (their share of the total, minus what they owe)

Beneficiary 2 gets $26,667 (as above)

Beneficiary 3 gets $41,667

Payouts total $100,001 (because I rounded up)

There's no need for the first 2 beneficiaries to find money to pay back the loans as such, it can be easily adjusted as above. 

 

ETA: other people clearly type faster than me today 😁

Edited by Sugarplum Poobah
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MerryMadrigalMadge
Posted (edited)

just adding the same as everyone above!🙂

 

so ben 1 and ben 2 borrowed money from the deceased? 

 

I had that as an executor - this is how we did it. 

Cash    100,000.00
Debt 1      10,000.00
Debt 2      15,000.00
   
Total estate pool    125,000.00
   
Divide by 3      41,666.67
   
Actual cash disbursement:  
Ben 1 gets $41,6667.67 less $10K      31,666.67
Ben 2 gets $41,6667.67 less $15K      26,666.67
Ben 3 gets $41,667.67      41,666.67

 

Edited by MerryMadrigalMadge
extra info
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2_little_boys

Thanks everyone.  I had it completely wrong and I knew it was wrong but couldnt for the life of me work it out

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Inkogneatoh

I would have worked it out differently. 

At the moment they get $33, 333 each.  Ben 1 owes Ben 2 and 3, $3,333 each. Ben 2 owes Ben 1 and 3 $5000.

 

So Ben 3 gets 33,333 + 3333 (from ben 1) + 5000 (from ben 2) = 41666

Ben 2 gets 33,333 - 5000 (to ben 3) - 1667 (to ben 1) = 26666

Ben 1 gets 33,333 +1667 (from ben 2) - 3333 (to ben 1) = 31667

 

They only owe 2/3 the amount as one third is going back to them.  Ben 1 wouldn't hand anything to ben 2 as that money would be offset by the amount owed to them.

 

I may have worked it out slightly more complicated, but I got the same figures. 

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