Legal Question in Wills and Trusts in California
Does the person holding a note have the authority to suspend payments of the borrower without the note going into default and incurring penalties. I have inherited a note belonging to my son at my father's estate distribution, as my inheritance. His grandfather had allowed him to skip some payments when he had the note. Now that it was given to me,( I protested at the distribution) but felt bullied to take it. I told my son not to give payments to me until I could figure out what to do. If the note goes back to the trust, do they have the right to exact penalties for default even though I held the note and suspended payment while I held it.
2 Answers from Attorneys
The holder of a note has the option to suspend payments including canceling the note, and that includes you the inheritor/holder of the note. I don't inderstand why the note would go back to a trust, but you the note holder, would want to extract an agreement from the trustee of the trust, the trust the takes the note as is, will not seek back interest, penalties, and agrees the note is current as of the date of receipt of the note into the trust, so as not to put your son behind the eight ball.
and don't forget to have an attorney look at the terms of the note and get as definite a timeline as you can on what happened when and how.
best,
roberta avrutin
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