A moral dilemma

[Transistor_Rhythm]

I’ll keep it succint; given the situation, you have absolutely no moral or ethical obligation to give anyone any money.

[BlinkingDuck]

@Heckity

I’ll try to tell the back story succinctly.

My ex-husband passed away on May 30th of an accidental drug overdose. He had no Will. We have two sons together, now in their early twenties. As is often the case with an addiction/illness, my ex was in significant financial difficulty.

He would not have been able to qualify for a mortgage on his own and for that reason, even after our divorce, I remained on title and mortgage. Upon his death and under “rights of survivorship” (we were joint tenants) the house transferred to my name (I have remarried).

The house was in pretty poor shape, but nothing a modest budget and tons of hard work wouldn’t correct. I’ve found there are tax liens and judgments and outstanding property taxes against the house and of course the mortgage. The house is now restored and on the market.

During my ex’s funeral his father informed me that the ex borrowed a lot of money from a friend of the family. I had known he borrowed money a few years ago, (he’d told me $80,000 when he gave me a small down payment of $20,000 to begin to buy out my share of the house).

However, my ex-FIL claims the ex borrowed $160,000 from the friend.

My first thought was to repay the friend the $80,000 of which I was aware – after the house sells. After I’ve paid the real estate agent, the liens, property taxes, judgments and mortgage, I should get the money I’ve invested out. The ex and I had an agreement that he would give me my legal entitlement of 1/2 after he sold the house - I had no idea there were so many encumbrances against it.

So, the friend had no paperwork or legally binding agreement to be repaid the “loan”. 'There is no evidence in all of the ex’s effects that show that money being paid toward his debt, so all indications point to his spending the money on his drug habit.

If I were able to get any money out beyond my “fix up budget”, who would you give any additional money to?

1. The friend who loaned him the money without an agreement? And perhaps enabled his drug habit to reach new levels;
2. His two sons who were left nothing of any value (they can sell the house contents legally as his next-of-kin, but they won’t get much)?
3. Me, as I am entitled to the property a)under survivorship; b)matrimonial law?

It may damage my sons’ relationship with their grandparents if the “friend” does not receive any money from the sale. Also, knowing that he’d borrowed the initial money would I pay back only the $20,000 I was given?

I am someone who tries to do the right thing morally and ethically irrespective of any legal obligations (or lack thereof). Am I a chump for even considering paying the friend anything?

Okay, what would YOU do?

Morally?

Pay off the 1/2 liens, 1/2 the property taxes and 1/2 of the repair costs. Then, as per your agreement take your half. The remaining half is to pay off the rest of the liens and the other half of the property taxes plus 1/2 repair costs.

If you wish to be overly generous then take out all the liens and property taxes before you take your half…but that is being generous IMO.

Half the house is yours, by agreement. Legally it is ALL yours. You don’t need to spend your money to pay off the ex-husbands loans

(and who the hell lends $160K to a druggie…or anyone??? You sure they just aren’t making this shit up to get some money out of the undeserving, evil, scumbag ex-wife? - not saying you are but that may be a reason the use to justify this moneygrab to themselves)

[Kimmy_Gibbler]

Could you clarify the borrowing timeline a little more?

As I understand it, during the marriage, the two of you purchased a house, mortgaging it through a conventional lender. As part of the divorce settlement, the house remained titled in both names as JTWROS, with your ex remaining in possession of the home.

Then, he borrowed $80K or $160K to pay off the first mortgage. But the first mortgage remains unpaid? How much did this house cost anyway? And he paid you $20K to buy out your share? How do you account for that $20K? It certainly doesn’t appear to have been factored in to any of the dealing with the house or the lender.

I would ask your attorney how likely it is that a court would find the family friend lender to have taken an equitable mortgage when she lent him this money to pay off the first mortgage. And if so, what that means for you. This is a different question from whether the house needs to be probated, but your lawyer should be able to get you an answer (or consult a real estate practitioner on the topic).

I know you asked about the moral facets of this conundrum, but as we say in the lawyering game, “One always negotiates in the shadow of the law.”

[Cat_Whisperer]

First off, I understand and appreciate you trying to do the right thing, Heckity, not just the legal thing, but this stinks to high heaven to me, too. As far as I can see, the friend who apparently loaned your ex $160,000 needs to be making a claim against his estate, of which the house is not a part. If there is no documentation, I agree with everyone else; too bad for you. If you are not smart enough to protect your assets to the tune of $160,000, then you will probably lose it. As Judge Judy says, if you can’t prove it, it didn’t happen.

At this point, I think the way to go (with your lawyer’s guidance) is to sell the house, pay everything off that is on record, and take whatever profit is left for yourself as the owner of the property. Then you can decide if you want to split it between your two sons (don’t forget that they will inherit from you eventually, too). They would have inherited the house if you weren’t on the title, but you were, and you assumed the risk that came with that, too. The friend who loaned your ex money needs to become a legitimate creditor to be considered in all this. If they aren’t willing to do that, they don’t need the money very badly, I guess.

[Cat_Whisperer]

And your ex father-in-law needs to mind his own damned business. This has nothing to do with him.

[BlinkingDuck]

The more I think about this…the more I’m thinking there is a Rat here…that grandpa wants to make sure his genetic offspring get all the money and not the ex-wife and the possibly her new kids with new husband sharing his sons stuff. I’m willing to bet $10 that if he received the money he would give it to his grandkids in his will or something (assuming the ‘friend’ is helping his friend (grandpa) get the money by pretending to loan grandpas son the money).

Damn, I’m getting cynical in my old age…but something smells really rotten here.

[TroubleAgain]

@Iridescent_Orb

Think about this in steps:

1. Is their legal proof that your husband owed money to the friend?

No – there is no legally binding evidence.
2. Is there any evidence that your husband borrowed money? (Even if it is not legally binding.)

Possibly – he told you he borrowed $80,000 a few years ago. Perhaps he received it in another manner (lottery, etc.), and told you it was borrowed so you (or the kids) would not try to claim any of it. Or perhaps he simply lied. Drug addicts do that from time to time.
**3. Is there any evidence the loan was still outstanding?
**
No – he could have repaid it or otherwise settled all or part of it.
4. Is there any evidence that the loan was from the friend?

No – your ex-husband did not disclose the source of the alleged loan.
Let’s put this together. The only thing you know for sure is the ex-husband claimed to have borrowed money “a few years ago”. No proof he actually did borrow money at all, much less who he “borrowed” it from. If there was even a shred of evidence that he owed this friend money (for example, a deposit of $80,000 in your ex-husband’s account, followed by monthly payments to the “friend”) you might consider discussing repayment. As it stands, you are being conned.

You sound like a very kind, caring and decent person to even be considering giving a cent to this “friend”. Unfortunately, those qualities also make you the ideal mark. Keep the money for yourself – if it makes you feel better, consider it payment for all you have done for your ex-husband. Morally and legally correct.

One final thought – if you give anything to this “friend”, he will be back for more.

This, especially the last point, pretty much sums up my thoughts. You really need to cover yourself and the boys, if you decide to pay any amount on this alleged loan.

[LurkerInNJ]

If the friend really did loan your ex 160k, he could have had your ex execute a private mortgage and hold it so he would have a lien on something tangible in case your ex did drop dead without having repaid the loan.

I call b.s. on the friends’ story of having loaned 160k without any documentation. No one loans that kind of money without something to back it up. It’s an outlandish claim. If it has merit, he will be able to prove all or part of it. Like with a copy of a cancelled check that says “loan”. Even then, the loan would be a claim against his zero dollar estate, not against the house. If he could prove the 80k, I would give him the 20k received because that would feel like the right thing to do.

I loaned my best friend of 30 something years five figures and I had her execute a private mortgage on her condo so I would be protected if she died in a plane crash or something before I was repaid. I hold the document in escrow until I am fully repaid. If something should happen to her, I record the document and get paid out of the proceeds of her estate selling the condo, which is in her name only. I completely trust(ed) her to repay me, but I am neither willing or able to take a financial hit like that if something should happen to her.

The house is yours, and whatever is left after the liens on the property are satisfied is yours, and you are certainly free to share it with your children.

[legalsnugs]

@LurkerInNJ

…
I loaned my best friend of 30 something years five figures and I had her execute a private mortgage on her condo so I would be protected if she died in a plane crash or something before I was repaid. I hold the document in escrow until I am fully repaid. If something should happen to her, I record the document and get paid out of the proceeds of her estate selling the condo, which is in her name only. I completely trust(ed) her to repay me, but I am neither willing or able to take a financial hit like that if something should happen to her.

LurkerInNJ, you might want to go ahead and record your lien. It gives notice to other potential creditors from whom she might want to get a loan using the condo as collateral and further protects your claim. I don’t know if NJ is a “notice” or “record” state, but I’d go ahead and do it, if I were you. But don’t forget to record the satisfaction of said lien when she pays it, too.

I am a lawyer but I am not your or anyone else’s lawyer. I am not licensed to practice in your state and this is not legal advice; it’s just common sense advice from an anonymous person on a public message board.

[gigi]

@lobotomyboy63

Your priorities, in order, should be these:

1. Your current spouse
2. Your children
3. Others

Were I your husband I’d have major issues with you paying out that kind of money—hell, I’d have an issue with you paying $5000. If you were the husband and he were the wife, I’d have the same issue.

I could take a little more kindly to a small, old debt cropping up from WHEN you were married. This isn’t small and the premise that it came while you were married is in doubt.

Even supposing the current spouse is okay with it, you’re depriving your kids. Say you had the $160K in the bank, paid it off, then got killed tomorrow in an accident. Your kids would have inherited some of that money. IMO you shouldn’t think of which pocket the money comes out of…it’s your money, and money is money.

I was assuming the OP meant that any money she would pay out would be from the sales of the house. She wouldn’t be dipping into her “own” money. In that case, her husband has nothing to do with it.