[as8891]

I am asking this question for my 77 year old father. He has an older sister. Thirty years ago he bought a hotel and asked her to come and work for him managing the hotel. About 25 years ago he wanted to help her and made her a partner in the business. He loaned her $40,000. To purchase part of the hotel. The loan was notarized and states that interest would be paid as well. But there was never a time limit of when the loan would be paid nor were there monthly payments set up for re-payment. My aunt has no children and was divorced 40 years ago. Everything that she has is willed to my dad. He never asked for her to re-pay the loan but still has the paperwork on it. He never wanted her to not have financial security while she was still alive knowing that when she died he would get the 40,000.00 back after the sale of her home, which he has power of attorney to take care of that. In the meantime she is now 91 years old and he has just placed her in a nursing home because she cannot walk and take care of herself. She will be eligible for medicaid in about two months when she has used all of her liquid cash to pay for her expenses now. But my dad will probably have to sell her house because he does not want to be responsible for the upkeep and utilities of the house. Medicaid will get all of her SS check and they will not make allowances for her household bills to be paid. After the sale of the house will he be able to collect on that 40,000.00 note plus interest before the government takes what they want because she is on medicaid and in a nursing home? This is in the state of Kentucky. He just wants his 40,000.00 back. Thank you anyone for your help.

[Fr_Chuck]

First I am not sure what the laws on loans were 25 years ago, but without stating a time limt or a payment schedule I am not sure today this loan would stand up as a legal loan, but be considered basically a gift, since there was no enforcement terms.

Also as long as she is alive, and there is nothing that allows him to call the note, I don't see what he can do. Also there is no connection between the loan ( it was for a motel) and the home what happened to the motel, if it was sold, that money should have been paid back then.

Also as a note, POWER of ATTORNEY ends at death, so after she would die, the power of attorney would end at death, so he would have no ability to sell anything at her death unless he was in charge of her estate also.

All I can say is he can try, if he goes to court and get a lien on the home with this loan paper, maybe it will hold up, but at this time, he is merely a unsecured debtor, the loan is not backed by the property. So the government would say their attachment on the proeprty would hold over his lien.

Time for an attorney, and I would say I would not spend the money if I did do it, since they may still try and come after it latter