I've got a question regarding a debt agreement for a loan between family members - specifically between a parent (lender) and a company belonging to their child where the child is sole shareholder and director (borrower).
Both parties want provisions clearly setting out what happens in the event of the death of either the parent or the child. The aim is for the agreement to immediately terminate and the lender to get the principal and any interest owing returned to them as simply as possible.
If the lender dies, this seems simple enough: provide that the agreement terminates and the borrower will pay the principal and any interest owing to the lender's account (which would form part of their estate).
If the child dies, what provisions could be made for the lender to be able to recover the principal and interest as easily as possible? The lender wants to make sure the money isn't caught up in a complicated or lengthy legal process of recovering it from the company.
Both parties want provisions clearly setting out what happens in the event of the death of either the parent or the child. The aim is for the agreement to immediately terminate and the lender to get the principal and any interest owing returned to them as simply as possible.
If the lender dies, this seems simple enough: provide that the agreement terminates and the borrower will pay the principal and any interest owing to the lender's account (which would form part of their estate).
If the child dies, what provisions could be made for the lender to be able to recover the principal and interest as easily as possible? The lender wants to make sure the money isn't caught up in a complicated or lengthy legal process of recovering it from the company.
