My husband and I used a company to set up a legal intra-family loan for one of our daughters to purchase a home. Since the loan is in both our names, would it have an effect on that contract, or security deed if one of us dies?
Also, what type document should we include with our will stating if we both die, the balance of the loan's principle is reduced from that daughter's portion of our estate?
1 Answer from Attorneys
It depends on how the loan is set up, but usually the lender rights under the note would pass to the heirs of that lender, i.e. you or your husband. And you would include language about the reduction in the balance upon your death in an amendment to the note and in your wills themselves. There is no separate form for this.