AIBU to not want anything to do with PILs 'Inheritance Planning' ?

(125 Posts)
TheRabbitCatcher Sun 05-May-13 13:44:14

I've namechanged as this is quite a personal issue.

PILs are (very amicably) divorced and, through shrewd house purchases, hard work and their own inheritances have decent-sized estates (about 4-5m between them I guess).

Recently they have approached DH several times to discuss 'inheritance planning'. He has no interest in the actual money and doesn't care for tax dodges so has suggested that they speak to a professional who can help them to decide what to do. Actually, I think that he is terrified of the idea of his parents dying, but that's not the reason he gave them. While I respect DH's wish not to discuss the issue, this has led to PILs now coming to me to ask if I can 'encourage' DH to engage or become involved myself. I don't feel comfortable talking to them about their money either so have taken to changing the subject or found reasons to avoid any lunches clearly planned to discuss the topic (this tactic is not long-term, I know). I know that they read our lack of interest as being unsupportive of them and irresponsible (towards them and our children, who I suppose would gain the most out of their planning). To them, I think that leaving a 'good' inheritance is important, especially as their parents did this. While I am happy to support them in other ways, I feel very uncomfortable talking about this (basically, discussing how we could gain the most out of their deaths) and know them to be more than capable of making the 'right' choices without our involvement. My own family is not especially well off and Quaker, all this feels a bit alien to me.

AI (and my husband) BU?

WafflyVersatile Sun 05-May-13 13:55:23

Would you rather not have the money?

Can you just say that you don't feel comfortable talking about it, are happy for them to leave you or your children as much or as little as they wish and trust that a professional can guide them to prepare wills to their satisfaction.

Assuming you like them, and want to preserve family good feeling, then I think you need to tell them honestly some of the things you've said here, so that they don't feel that you are being a judgemental lefty who thinks that they are tax avoiding scum stealing money from disabled orphans.

NB that it is irrelevant whether you do think this or not, if they think you do then it will be disastrous for family relationships.

I'd tell them the bit about "DH feels very uncomfortable about thinking about your deaths, and about discussing benefiting from your deaths" and "we have total trust in your financial acumen and your ability, in conjunction with professional advisers, to make sensible arrangements"

WafflyVersatile Sun 05-May-13 13:56:50

Sorry by my first question I just mean that you may not want to inherit a lot of money for whatever reason. It wasn't meant to read as a snidey Q, which it does to me now.

WafflyVersatile Sun 05-May-13 13:57:39

Kittens has a much better suggested wording.

Alibabaandthe40nappies Sun 05-May-13 14:00:06

YABU

If they have worked hard to put themselves in this good financial position, then of course they want to pass as much of it on to their family as they can. You and your DH are being a churlish, and childish to just stick your fingers in your ears about it.

They probably want to know what your aspirations are for your children, should they put money in trust for education, or house purchases? How old do you want your children to be before they have significant money of their own? 18? 21? 25?

At the very least you need to sit down with them properly as a couple and express your discomfort in a rational way.

BackforGood Sun 05-May-13 14:01:55

I don't think either you or you in laws ABU as such, you just have a different way of thinking about things.
However, I do think it's always sensible to have open, adult discussions about death and the wishes you all have about what happens after your death, and that is a lot easier now, when death isn't thought to be imminent rather than leaving it until someone is terminally ill.
I think it's very thoughtful of them to want to discuss options with your dh, rather than dictating that their money should be used for x, y, or z, which is perhaps not you would have wanted for your dc.

PortHills Sun 05-May-13 14:04:18

YABU.

Death is sad, and I can understand why it might seem easier to pretend it won't happen. i know you haven't asked for the inheritance, but when you die it is all over, except for what you can do for your family going forward. Knowing they have done their best to provide for their kin, as their parents did for them, is clearly important to them and it will comfort for them in their old age and death to know they have done what they perceive to be the right thing. If your DH doesn't engage with his parents in this matter, then he is stopping them from having that comfort.

IMHO!

Ragwort Sun 05-May-13 14:06:37

I think Kittens advice is very good; it is very uncomfortable to talk about this sort of thing (which, however Ali phrases it, is basically tax avoidance) but if you say tactfully, that you would be happier if they sought professional advice, then that should be acceptable all round. Also as an in-law, it is even more difficult to discuss 'inheritance issues' without appearing grabby.

My own parents are very comfortably off and generous but I know that my DH finds it a very difficult situation, they are clearly wealthier (and have been more successful financially) that we are and I guess in some ways that makes him feel slightly 'inadaquate' (I know he shouldn't feel that, but he does) so he doesn't want anything to do with whatever 'arrangements' are made.

StrangeGlue Sun 05-May-13 14:08:36

You and your dh aren't being U. I think you should just explain your hesitation and see where that conversation goes.

What alibaba said.

You need to sit down with them and at the very least understand what they want to discuss. I had this discussion with my parents. Of course I don't want them to die and would rather they live forever than have any amount of money but realistically it is going to happen at some point and probably while i'm still alive. My Dad worked his nuts off for us so I think having this discussion is showing my respect of that.

There is nothing wrong with you telling then why you are uncomfortable discussing this and then they can keep it add brief as possible such as asking specific questions such as when you would want your DC to inherit. Then they can short out the details with a professional.

But while I understand your upset at this, death is a certainty for us all and I think its unreasonable to not have a basic discussion with them. It's certainly very unreasonable to avoid them as a way to put it off.

poozlepants Sun 05-May-13 14:09:25

I don't think this is really about them dying tbh. Since I first met my FIL 25 years ago all he talked about what financial planning, his annuities, pension etc etc. Now he is retired all he talks about his inheritance and death duties and blah, blah, blah. He desn't have nearly as much as your IL's but it's his thing. I don't think it's actually about his dying because even though he's in his mid seventies he thinks he's going to live forever. It's just his thing- he always has to be planning the next financial stage. We aren't interested but we just let them gibber on because they'll probably live on and use all their savings up in care fees.
There is no point DH sticking his head in the sand.

specialsubject Sun 05-May-13 14:14:12

The only unreasonable thing is the refusal to deal with the fact that loved ones WILL die.

For adults to ignore the planning for this 100% certain event is juvenile. The odds are that you and your husband WILL have to deal with helping the survivor, and then winding up affairs once both are gone.

There are very limited ways now to avoid inheritance tax so don't worry too much about that - and there is a reasonable chance that a big chunk will disappear in care fees. With an inheritance of that size, probably not all of it.

so get heads out of the sand, ask parents what their wishes are for their money (stressing the importance that THEY come first), discuss it all and express your preferences, employ a solicitor to sort it all find out where the wills are, who the executors are and then relax with the job done.

powers of attorney and living wills are also a good idea, again so that the wishes of parents can be followed.

MichaelaS Sun 05-May-13 14:14:53

Sorry but I think YABU. Inheritance planning is often about passing on money in good time before death. If its given at least 7 years before death there is no inheritance tax to pay. They could be looking to set up trusts or to directly give you money now. Either way, why volunteer to pay 40% tax? If you feel you should morally pay it why not accept the money and give 40% or more to charities you support, that way you can be sure it is going to help the aged / poor children / local communities rather than pay MPs expenses.

Either way, it is their decision who they leave their money to. By refusing to discuss it you may be wasting the money either in tax which need not have been paid, or by your kids getting large amounts of money for education they might not want (eg uni fund) or before they are mature enough not to blow it on cars, parties and drink.

Talking about death is never nice, but it must be even harder when it's your own death that you want to discuss and everyone else is refusing to engage.

Bite the bullet and sit down like grown ups. You can always say you don't want anything and give th the opportunity to choose charities they want to support rather than get it anyway, heavily taxed, years down the line.

CloudsAndTrees Sun 05-May-13 14:15:08

I think YABU.

This is clearly something that matters a lot to them, and it will be important to them that these things are sorted before they get very old. I think it's quite selfish to allow them to live with the worry of it not being sorted just because of some discomfort you feel.

Let them have the comfort of knowing that arrangements have been made so that they can forget about it and carry on living their lives.

Wishiwasanheiress Sun 05-May-13 14:17:16

There was a tv show regarding planning for your death. Basically it is financial planning. They sound extremely sensible. I would be honoured to be be able to have such careful parents or inlaws.

It is not grabby. It is not charity or anything but practical. They are planning the detail. So including presumably how to care for them in certain eventualities, gifts to friends/charities, trusts potentially to gc's. gifts to friends and family.

I agree with ur instinct to tread carefully as they are not ur parents and these plans should by rights affect their son only in a legal sense. It is sensible but not a prerequisite that he joins in. Depends on their question.

Be grateful. Many dont bother and near and dear are left in all sorts of tricky situations. Personally i would fear that more.

TheRabbitCatcher Sun 05-May-13 14:18:13

Thanks for the thoughts, it's really helpful to have other perspectives. I agree that it is thoughtful of them and although we don't see eye to eye on many issues (taxation being one of those issues), I appreciate that they are thinking in our best interests. I suspect they do think that we sound churlish so we should find some way of explaining how we feel properly. Also, I think that their intention is to 'gift' money (and 'things'- my mother collects ceramics), which again feels a little weird. I suppose we could look into money going into trust for the children (a 'family trust' has been mentioned).

Viviennemary Sun 05-May-13 14:20:27

They are probably trying to avoid inheritance tax which I think runs at 40%. So if nobody is interested in whether or not they would want the money to go to the state then they would be better donating money to the charity of their choice.

yabu.

they are trying to protect your inheritance. if you can't bear discussing it, ask them to transfer assets to a family trust. they decide who benefits and they decide who the trustees are.

it is a horrible subject and clearly you are not a money grabbing person which is great. but they have slogged bloody hard for their money and don't want 40% of it to go to the tax man.

Wishiwasanheiress Sun 05-May-13 14:22:06

In short yes yabu

Kat101 Sun 05-May-13 14:26:14

Your DH is not thinking ahead. What if all the money goes on care home fees, and once the second partner dies he is saddled with a huge tax bill? CGTax, IHTax, urgency to get property sold to pay HMRC just adds stress onto an already stressful situation.

I personally am all for planning for one's death. Which stems from having to pay HMRC a huge chunk of my grandparents estate once they'd gone. It seemed unfair that they'd already paid income tax on their earnings, stamp duty on house purchase, capital gains tax and then HMRC weren't content with all that, they wanted inheritance tax on top.

So now my father and my family are planned to the nth degree, We've worked fucking hard for our assets and paid a shit load of tax along the way, I want as much as possible to go towards my childrens estates rather than lining HMRC's pockets. Especially as IHT was designed to tax only the super wealthy and the govt keep the cut off as low as they can get away with.

Deffodil Sun 05-May-13 14:36:52

YABU

There is 800K inheritance tax to pay,on our recent family bereavement. Look at it that way. You really have to be pragmatic,and hand as little as possible over to the government.

Pusspuss1 Sun 05-May-13 14:45:43

You need to have the conversation that they want to have with you and DH, and then let them instruct their solicitor to put in place the estate planning strategy that they decide on. It will probably be a question of you listening to them explain their plans, as opposed to much input being needed from you and DH. They are being very sensible and thoughtful to do some tax planning, and they just want to ensure that the assets they have worked hard to build up will pass on tax efficiently to those they love. They should be congratulated for their common sense. Time to man up and have the conversation!

suburbophobe Sun 05-May-13 14:47:13

I think you and your DH should support them in this, if it makes them feel at ease.

Would you rather the tax man gets it? You can always put it in trust for your DC. And help their education etc.

Minifingers Sun 05-May-13 14:50:16

Oh for goodness sake, stop being squeamish. They are going to die one day. So will you. And your kids. It's really not sensible or grown up to refuse to acknowledge this fact and its no comfort to them.

However, if you're going to take a principled stance on not taking shed loads of money you haven't earned then tell them this unequivocally. Tell them they can make plans to donate it to charity and you have NO problem with this at all.

FWIW if I was in your shoes I'd be dancing around the kitchen at the thought of one day getting that amount of money left to me.

outtolunchagain Sun 05-May-13 14:54:27

Good Lord are you 15 ., inheritance planning isn't just about tax it's about how to deal with the assets .Having dealt with many cases where these things were not discussed the more plans in place the better. People sometimes die suddenly , you need to make sure that the surviving partner is able to access funds etc, the money exists you can't pretend it doesn't ,and it has to be dealt with .What if the surviving partner develops dementia, you need to discuss how they would like their care to be managed etc, would they prefer to spend more money but stay in their own home for example .

Presumably they will want to discuss executor ship of the will,perhaps they would like to entrust their son with this role ( not unreasonable) but I would always suggest a professional executor as well because it can be quite onerous .etc etc .

Minifingers Sun 05-May-13 14:55:44

Love the comments on this thread about the morality of passing on money to your children. Like leaving your estate to benefit the entire country is somehow less moral than leaving it to children who may have absolutely no need of a pile of unearned cash and have done nothing to deserve being given it.

Inherited wealth is where the roots of much of our inequality in the UK in relation to housing and education lie...

K8Middleton Sun 05-May-13 14:58:24

I think yabu but only because I have made the following assumptions: you don't know much about inheritance tax or processing an estate after death.

I hold the following opinions that influence those assumptions: everyone should plan for the worst and where possible, when it comes to death, sorting things out while everyone is still alive is better for everyone. Managing probate is a pita at the best of times but if there is insufficient liquid assets (ie cash), settling the estate becomes at best a headache for those left behind and at worst, a horrible, stressful, money and time draining nightmare because the inheritance tax has to be paid first.

I think having the conversation between the four of you is the least you can do. I imagine this is a tremendous worry for your pil. Once you've had a grown up chat they can go away and make some plans.

LIZS Sun 05-May-13 15:01:12

You're happy to benefit from it but not to be constructive about forward planning hmm yabu

Finola1step Sun 05-May-13 15:02:04

In the nicest possible way, YABU.

My father passed away two weeks ago with nothing in place. He didn't have a lot money but having to make certain decision at this time has been very hard.

Your ILs are being very sensible. You and your DH should meet up with them and listen to what they have to say.

50shadesofvomit Sun 05-May-13 15:02:58

Monetary considerations aside, it's probably best for your h to know what kind of burial/funeral they want so that when the worst happens, he will have fewer practical things to worry about.

If you don't want or need their money I think it's perfectly fine to get them to put it into trust for when your children want to buy a house or urge them to donate to charity.

Squitten Sun 05-May-13 15:04:36

YABU

They are trying to be sensible and not leave a massive legal or financial burden on you when they die. They will die one day and you just have to accept it and deal with it. The least that you can do is listen to whatever it is that they want to tell you or ask you.

I think you're both being rather immature

Tigresswoods Sun 05-May-13 15:04:54

So long as you are happy to find a bridging loan to pay the huge inevitable tax bill in order to release their estates on death... Then it'll be fine.

expatinscotland Sun 05-May-13 15:06:48

Your husband's being a fool. What specialsubject said. This 'horror' at elderly people dying is one of the stupidest things I've ever heard of.

Actually good financial planning will mean a shit-load less trouble for you all when they do go!

It's sound business sense to plan, as has been said before, a big chunk of that might go on care fees, if you plan properly then they can have a fund to cover it all & you won't have to worry.

"Render unto Caesar that which is Caesar's" ie tax avoidance not tax evasion, big difference.

Minifingers that's a topic for another thread of its own! grin

purplewithred Sun 05-May-13 15:13:36

Sorry but not only are YBU you are borderline selfish. They want an open and honest talk about how to manage what will be a pretty substantial legacy; it will be a big job for them and they want your help and support and it cannot be left to a professional because a stranger just won't be able to answer the questions.

They may want to know stuff like do you want them to leave money to you or direct to your kids; if they leave it to your kids in trust then what age do you think it right for the capital to go to your children; will you be trustees for your children's trust funds; will you take power of attorney for your parents if they become incapable of looking after their own affairs. These are questions only the two of you can answer.

It may be uncomfortable but they need you. Do it.

Essexgirlupnorth Sun 05-May-13 15:23:00

My parents have spoken to a financial advisor told they can give me and my sister 3000 a year without it being subject to inheritance tax so they are doing this which is a great help. Is it something similar your PIL want to do. Surely this will benefit your family in a positive way but understand if your husband doesn't want to discuss their possible death.

mumandboys123 Sun 05-May-13 15:25:00

It is difficult to have these conversations, you don't want to look 'money grabbing' or feel that you are going to profit in any way from the death of someone you care about, love and respect. However, there is an awful lot of logic in understanding what their wishes might be for their funerals, where the will can be found, where capital, jewellery, antiques, deeds to property can be found, etc. etc. etc.

My dad died 4 years ago. He didn't leave anywhere near the amount you are talking about but it was nonetheless a very substantial sum of money that neither myself nor my mum realised he had. He didn't make a will. He died very quickly after being diagnosed so hadn't had the opportunity to discuss with my mum the finer details of what he wanted, what there was, where it was located. I cannot begin to tell you the mess he left: money in 19 bank accounts which we had to locate the paperwork for, additional money in life insurance policies and pensions we had to locate, a grieving widow who was additional upset because she had no idea what he wanted his funeral to look like....a lot of unnecessary distress and stress that could have been avoided with a couple of hours worth of thinking about it all and passing on that information once decided.

I now know where my mum's will is, where I can find the details of all her finances, what she wants she dies. I am aware of the contents of her will and I am aware of a few things that aren't in the will but which she would like me to do in her name for charity when she dies. I know what hymns she wants playing at her funeral. I know where her address book is with details for family members who I rarely see. I know where to find the code to her little safe where she keeps a few precious things and additional important documents. Believe me, it is better to know than to have to guess when the time comes. Because the time will come and it is distressing enough without all the added hassle of not knowing this stuff.

It is tough to have these conversations but I am quite sure that your husband will, ultimately, be glad that he did.

TheRabbitCatcher Sun 05-May-13 15:27:16

Thanks everyone. A bit of a frustration for me is that DH does know about the tax implications etc (he handled probate cases as a trainee solicitor). I really do think that it had not really occurred to him that there is a link between his parents dying and a large amount of money (and 'things') to be dealt with, and it has shaken him a little. He has a brother who is apparantly even less willing to be engaged than we are, which I suppose is doubly hurtful for my in-laws.

Squitten Sun 05-May-13 15:31:38

Well then OP, it falls to you to give him a good (metaphorical) shake and tell him to act like an adult.

Your poor ILs are trying to do the best by their family and be responsible with their estate to the benefit of all of you. Their delightful sons are both refusing to have anything to do with it. I'm assuming they won't be so reluctant when the funds are arriving in their bank accounts though, eh?

Very poor behaviour. Time to get over yourselves and get on with it.

TheRealFellatio Sun 05-May-13 15:37:11

How about you write them a nice letter? Explain that as they are clearly very wealthy you feel dreadfully uncomfortable about being directly involved in any plans for money that you may one day probably profit from to some degree, and you worry that anything you say may not seem completely impartial, and that people may doubt your motives.

Also that your DH struggles to acknowledge that there will come a time when they are no longer with him and it upsets him to talk about it. Suggest that they go to a professional advisor and that any lack of enthusiasm/involvement on your part is not because you don't care but that you find it difficult to discuss because of the sheer amount of money involved. I'm sure if you word in genuinely and kindly they will understand and see your point.

marriedinwhiteagain Sun 05-May-13 15:42:09

OP - our DC are 18 and 15. We have already started IHT planning which by the way is avoiding tax a perfectly legal rather than evasion which most certainly is very wrong. The DC know assets are being transferred into trust for them and they will have limited access at 25 and full access at 30. The money we have is btw net of income and CGT - we have already paid vast amounts of tax and I see no reason why we should pay more upon our deaths due to poor money management. I think you all need to talk to your ILs.

lljkk Sun 05-May-13 15:42:26

Will you really not mind if they leave it all to the cat's home?

Or if they leave 75% to your BIL and 25% to the cat's home and none to your DH or your kids?

Of course, they may tell you they're leaving 50-50 to their 2 sons and then when they die you'll find 100% really went to the cat's home. BUT, at least you have a chance of being prepared if you let them talk to you now. Otherwise, it gives them peace of mind that they have their affairs in order.

lola88 Sun 05-May-13 15:44:28

I work in life insurance and you would not believe the amount of fights upsets and confusion Inheritance brings. IMO anyone who doesn't plan for this is irresponsible and it's up to your husband to deal with the finances when his parents do pass away so he should know what they want and since it will become his money he should start to think what he wants to do with it.

They are obviously worried about what will happen with there hard earned cash and refusing to help them is not going to help.

Maggie111 Sun 05-May-13 15:48:30

I think it would help you to realise that once you get to a certain age - leaving something for the next generation becomes really important. I have 3 parent "units" (my parents divorced and my in laws) and all of them make it clear that they want us well provided for when the time comes.

I am happy to help them make the most of their money and I am damn sure I want it more I want to give it to the government. But I repeatedly make clear that what I want most of all is for them to have a jolly good time with the money they have earned and it'd be my deepest wish if they spent it all and I didn't get a penny.

But that's not what they want, and I can understand that they are considering their "legacy".

I agree that they really need to speak to someone more qualified - let them know you're happy to do whatever is needed, but that discussing it isn't what you want to do because it is whatever they decide is for the best that you will go along with it. And refer them back to professional advice.

NaturalBaby Sun 05-May-13 15:56:39

YABU. My IL's have a very carefully worked out inheritance plan which involves DH and my family. I haven't had too much to do with it and as much as DH is very reluctant to talk about the future (i.e his parents dying) he is supporting his parents plans for their hard earned money and assets.
My IL's have worked their socks off for their children's benefit and would be pretty heartbroken if DH turned his back on them and let it all go to the tax man.

TheRabbitCatcher Sun 05-May-13 15:57:00

TBH, I would probably mind quite a bit if they left it to the cat's home (although MIL's suggestion was a donkey sanctuary). On the other hand, I really don't think either DH or his brother would mind in the slightest, if that is what they had chosen to do. They are more than capable of making those sorts of financial descisions and will prbably do a better job without everyone else expressing a (half-hearted, or half thought through opintion). I think that, for PILs and the children/grandchildren, the 'stuff' may be more of an issue, as they both have furniture, art etc which has 'meaning' to them and which they would like to stay in the family and which would be of interest to the taxman.

TheDoctrineOfSnatch Sun 05-May-13 15:59:46

YABU. You can discuss the most tax efficient way to achieve their wishes without influencing those wishes.

poozlepants Sun 05-May-13 16:05:44

They just want to talk about it. A lot of it maybe about recognition of their lifetimes efforts in making this money that they want to pass on to their family to make their lives better. By not wanting to engage your dh is sending a message saying he doesn't care about what they've done- which isn't true.

alpinemeadow Sun 05-May-13 16:20:18

Hmm, i do understand your dh and you not wanting to discuss this with his dparents. As some types of ineritance planning can involve dparents either giving away large sums of money now, or giving up control of it (eg to trustees), that obviously has scope for some tricky conversations, which could go very badly wrong if people are misinterpreted, or disagree with details of proposals!
So i can see the advantages of suggesting your ils take professional advice, and then tell you what they've decided.

Musicaltheatremum Sun 05-May-13 16:33:39

You have to face up to it. We knew when my husband was 38 and our children 6 and 4 that he would die young so we were able to financially plan things. He died aged 50 and everything on the legal side was wonderfully easy. Even took out a school feels policy so the fees were covered and 4 years of university so I don't have to worry about the drop in income.

whistleahappytune Sun 05-May-13 16:37:36

Rabbit I think you're being incredibly precious about this. Can you and your DH get over your posturing and squeemishness and help an older couple organise their affairs?

They are being responsible loving parents. They want to involve you, as likely it's not all about money. You can support them, listen to them and get involved as they wish you to. Oh, and you might express your gratitude, too.

FFS is this actually a problem?

Nanny0gg Sun 05-May-13 16:44:50

whistleahappytune I agree.

Sorting things out after the 'event' is hideous and complicated and often ends up costing money which you shell out to all sorts of people, not just the taxman.

I can't believe how sensible your ILs are being, and how both of their children are throwing it back at them.

sarahtigh Sun 05-May-13 16:58:34

I think if it is about stuff they may want to know if you have a favourite painting or something so you can choose and DC they maybe hurt that you do not want to choose like it is saying you think all their stuff is horrible, they would rather you chose painting furniture you liked etc of course antiques etc will be valued for tax man and tax needs to be paid they may also want to set up account to pay the tax as tax on 4 million will be 1.75m and your DH and his bro will need to pay this within 6 months of probate whether house has sold or not

i think both DH and his brother and you are BU and a bit selfish by refusing to even discuss what they have to say a solicitor / accountant can sort the money but what about the possessions/ art; whether you will or will not accept powers of attorney if they become incapable not just for money but welfare too, will you act as trustees for money left to your children, they need these questions answering and to refuse to answer is not good,

you can still answer these questions and say you would prefer their lawyer/ accountant to draw up exact details

I think you should think about your opinion instead of opting out

K8Middleton Sun 05-May-13 17:28:43

Just to give the flip side of not discussing it with anyone and yet still doing the IHT planning: one of my grandparents did this. There was plenty of planning, a trust etc and all the paperwork from when the spouse had died. But we still had to do a deed of variation and there was huge upset at the reading of the will (an equal share left to a son in law as gp's own child, money only to be held in trust for a grown up child etc etc).

Thankfully it was all very civilised and most of the people involved behaved very magnanimously to get the deed of variation through... but, we are more than 4 years down the line and the main asset remains unsold but gathering additional costs every year, a relative is still living in it (nightmare to sort out and the longer the executor leaves it the worse it gets) and the solicitor keeps racking up billable hours which are being paid for out of the estate.

What made it all worse was the shock of some of the decisions. The will felt so very unfair and nobody could have predicted it. Had there been a conversation before hand things could have been so very different.

alpinemeadow Sun 05-May-13 18:09:24

In some cases if the estate includes a house, you do get longer to pay the iht - see the website.
But i have to admit, having read the posts of people who have had bad experiences when there havent been discussions, i can see that there are very good arguments for talking about it now!

you can't sell a house until the iht has been paid. you have to pay iht, then wait for a receipt from hmrc which can take up to 12 weeks, then you can apply for probate which is the point at which the assets get transferred to the beneficiaries names and only at that point can a house be sold.

(bitter experience)

alpinemeadow Sun 05-May-13 20:39:36

That's interesting claudedebussy - i found some info on the hmrc website (I know, I surely should have better things to do!) which suggested you might get more time in some cases. How do most executors/beneficiaries fund the inheritance tax if someone dies leaving property but no liquid savings - do they have to take out a bridging loan, as a poster suggested below?
All in all, looks as though there is a lot to be said for discussing it - despite the real emotional pitfalls!

i don't know if hmrc allow leniency tbh, alpinemeadow.

that's the standard method.

i guess if you can't pay the iht then there's a stalemate and the asset just sits there depreciating. so they must allow some leeway. you probably just have to prove you can't pay.

HollyBerryBush Sun 05-May-13 20:44:41

I went on a course once, about wills and trusts etc. A quote remained in my head all these years:

The only estates that are liable for inheritance tax are those of people who distrust their relatives more than they dislike the tax man.

Most money can be dispersed, quite legally, through forethought and planning.

I fail to see why the government should take a portion of money that has already been taxed. Taxing the dead is wrong IMHO.

WafflyVersatile Sun 05-May-13 20:49:37

It's not taxing the dead FGS. They're dead.

'It's already been taxed' makes no sense either. Money goes round in circles. It's all been taxed loads of times.

Poosnu Sun 05-May-13 20:51:58

Claudedebussy - IHT on houses can be paid in instalments, so you need to pay 10% before applying for the grant of probate, and then 10% each year plus interest. When the house is sold the IHT bill needs to be paid in full.

The IHT on most other assets needs to be paid in full before probate is granted. The tax bill can be funded by direct bank transfer (there is a scheme to deal with this), loans, or sometimes a portfolio manager will agree to sell investments and transfer to HMRC before probate if he gets the necessary assurances.

HollyBerryBush Sun 05-May-13 20:52:35

It is the estate which is taxed. Not the new recipients of the money. Ergo it is taxing the dead.

greenformica Sun 05-May-13 22:14:22

Can you rephrase it to your DH - your elderly parents need help sorting out their finances, much in the same way they need help with other things. Why not just sit down and discuss things with them?

2rebecca Sun 05-May-13 22:45:12

I don't see why the OP's husband's idea of his parents contacting a professional to discuss inheritence planning is so unreasonable.
I think you need someone fairly independant to discuss this sort of stuff. Your husband could help point them in the right direction as there are alot of dodgy financial advisers out there, but after that I think the decisions should be theirs. There's no reason why a younger person would be more capable of sorting this sort of thing out than an older person and if one sibling gets involved and another doesn't it may cause trouble.
Why are the inlaws so reluctant to just get on with it?

poosnu - thanks. that does make sense.

'Money goes round in circles. It's all been taxed loads of times.'

what a load of bolleaux. i think you'll find it quite tricky to earn.

NeoMaxiZoomDweebie Sun 05-May-13 22:48:29

My PILS did this...well FIL did....it was because he had concerns....he was worried about SIL not wanting to share the house as she's living in it and FIL wanted to make sure there was no misunderstanding about the fact that DH is to have half of it's value when FIL dies.

It bothered him and he wanted it settled. YABU

detoxlatte Sun 05-May-13 22:57:30

If you have any affection or fondness for your PILs (sounds as though you have plenty), you need to look at this from thier perspective.

However difficult it is for you to think about this stuff, it will be a hundred-fold more for them.

By not letting them get their affairs in order, you will undoubtedly be causing them a great deal of stress.

This will sound a bit harsh, but you both really need to grow up and face this stuff. It is hugely immature to say "I don't care about the money" in the same breath as struggling with losing a oarent, especially when there are DGC in the picture, and especially with these sorts of sums.

YAbothBVU.

detoxlatte Sun 05-May-13 22:58:18

Sorry about the typos there!

MaryRobinson Sun 05-May-13 23:06:53

I also think YABU, and think you need to grow up. There are many ways to ensure money is distributed without it being a fiddle.

BTW Your pathological avoidance of the issue won't make them live any longer. They are as mortal as you or I.

MaryRobinson Sun 05-May-13 23:09:32

2rebecca perhaps there are specific things the PIL need to discuss and action now to minimize the value of the estate for iht purposes? That is why they need to talk like grown ups while they are all still alive.

LondonMan Sun 05-May-13 23:12:14

Money goes round in circles. It's all been taxed loads of times.

Since this has been questioned, I want to lend my support to Waffly and say I agree with this.

Consider: you earn some money, some of which you use to pay your plumber. The flow-of-funds from your employer is taxed (your income tax, your employee NI, your employers NI) and the flow of funds on the amount you pay your plumber is taxed again as his income.

The government takes its bite every time money changes hands. The situation with IHT is exactly the same as the plumber example: the money was taxed on the way in, and gets taxed again on the way out.
In the particular case of inheritance, instead of tracking every beneficiary down and giving them a separate bill, it is simpler to just tax the estate.

Wuldric Sun 05-May-13 23:15:04

I don't understand this thread at all. Your PILs are going to die. Not immediately (I hope) but it is inevitable. You are going to die. Have you refused to make sensible wills that make provision for your children's care because of this squeamishness?

Or is it that you just don't want to talk about money? That's more understandable, but again not very sensible. They may want to leave a substantial amount to charity or whatever and want to explain it to you. They may wish to give you/your children some money now, which is the best form of inheritance tax planning. The size of the estates are too small for serious jiggery pokery, so my guess is they want to give you/your DCs some cash now and discuss who would like which bits of furniture/paintings etc. All very sensible.

You're carrying sensibility a tad too far

Xmasbaby11 Sun 05-May-13 23:23:19

YABU - you need to have this conversation with them. It is purely practical. I think it would be much harder to talk about it later on when one of them dies / is ill. I hope you can manage to talk to them soon, then it can be forgotten about.

Casmama Sun 05-May-13 23:26:32

Grow up, both of you. Engage in discussions or tell them you don't want the money. You can't have it both ways.

MrsEricBana Sun 05-May-13 23:29:36

You say your dh is not keen on `tax dodges but just to be clear tax evasion is actively not paying tax you should be paying (but not declaring earnings or whatever) but tax avoidance is just minimised the actual amount of tax payable via legitimate tax planning, which is what it sounds like your PIL are trying to do. So I don't think your dh need feel uncomfortable on that score but his and your reasons for not wanting to discuss this because of fears about them dying or your Quaker background are absolutely valid and in any case a tax professional is who they should be discussing it all with. I think you should gently say this then step back. I do understand as I was asked to be an executor for a wealthy relative, I did agree but found the follow up discussions excruciating as my children would in principle stand to benefit from their wills. Hope you get it resolved.

Earlybird Sun 05-May-13 23:37:24

Inheritance planning is sensible and good business. Lack of planning is irresponsible, and will trigger huge and completely unnecessary expenses.

With all due respect, the attitude displayed here by you/dh indicates that neither of you are ready for/able to handle the responsibility that comes with handling/managing significant sums of money.

If you both are really not interested in the money, then let your PIL give it somewhere it will be appreciated. Or, 'let' them leave it to you/dh and then the two of you can give it away to a charity of your choice.

Littlehousesomewhere Sun 05-May-13 23:56:03

Even if you are not interested in inheriting money your own children may well be.

Sit down with them and tell them that you and your dh don't like the idea of planning for inheritance but you will support their plans and are grateful that they are considering your futures.

Arisbottle Mon 06-May-13 00:06:31

We had a similar scenario when DH grandfather died some time ago. His grandfather wanted to transfer money into our name as well as some property to avoid inheritance tax and DH did not want to be part of it.

He did discuss with his grandfather the will helped him plan but we did not want to be part of a tax avoidance scheme. I think you are being unreasonable to try and avoid discussing wills and finances but not to want to pay the tax that is due.

iiiiiiiiiiiiiiiiiiiiiiiii Mon 06-May-13 02:12:04

YABU not to talk about it with them.

YANBU to not want to do anything illegal. I wouldn't.

YABU not to help try to work out how to lawfully minimise any inheritance tax implications.

My DH and I are in our forties and we are already giving extra cash to our kids. We pay 40% income tax - we don't want to pay another 40% inheritance tax on top of that. sad

iiiiiiiiiiiiiiiiiiiiiiiii Mon 06-May-13 02:19:13

Sorry for small derail......
Musicaltheatremum
We knew when my husband was 38 and our children 6 and 4 that he would die young so we were able to financially plan things. He died aged 50 and everything on the legal side was wonderfully easy. Even took out a school feels policy so the fees were covered and 4 years of university so I don't have to worry about the drop in income

This is a very sad situation but I don't understand how you could have got insurance cover for a pre-existing condition? Or, am I thinking of the wrong thing?? confused

piprabbit Mon 06-May-13 02:27:52

In an ideal world, PILs would sit down with both their sons to explain their plans for the future. This gives everyone a chance to air their feelings and points of view.

The number of families that are torn apart by financial issues after the deaths of parents is astounding and I strongly believe that a lot of heartache could be avoided if every family talked through the decisions with their loved ones before they die.

All your PILs want is a sensible grown-up conversation with their adult children, it is unfair that they are putting pressure on you but I can see why they are turning to you as the mother of their DGCs (and in the face of your DHs apparent apathy). I think you need to tell your DH to man up and deal with the situation.

RocknRollNerd Mon 06-May-13 07:40:06

Apologies if this has already been touched on, I've been reading the thread on and off and may have missed a bit. Notwithstanding comments others have made about how Inheritance Planning isn't necessarily wholly evil, are you sure that this is entirely about their estate. It could be that they want to discuss things like Power of Attorney, who will make decisions about things like DNR should they get ill (and what the decision should be). Even if you have huge problems with the idea of tax planning I'd want to be sure that there weren't other things included in the discussion as well.

I've just come back from a weekend with my parents. They don't have a big estate or anything to worry about, but they DO have concerns about the possibility that they'll need care homes at some stage in the future, and NOW is the time to start thinking about the various options, what we might do with their house etc.

I've told them they need to see a financial advisor, this is a complex area which needs professional guidance. But I'm not avoiding discussing it with them.

Ignoring an issue is rarely the best way to deal with it.

Bearandcub Mon 06-May-13 07:54:18

YABU and foolish.

Corygal Mon 06-May-13 08:33:15

YABU. For a start, I'm not sure I entirely believe anyone who claims they don't want to inherit a large sum of money from their next of kin - unless there's other ishoos at play that you haven't mentioned. Ditto not being interested in it for yr DC.

Secondly, PIL prob want to involve you and DH because they are worried about looking after themselves in old age and want you involved in the paperwork - power of attorney, etc, etc. Refusing to engage is a bit mean.

outtolunchagain Mon 06-May-13 09:01:02

I'm not sure what being a Quaker has to do with it , some of our most famous financial institutions were founded by the Quakers. ; most notably Barclays Bank .They were also responsible for other large companies ( sadly now mostly sold ) like Rowntrees and Frys chocolate.

The Quakers have always been financially astute whilst retaining a social conscience,notably the demise of the last family chairman of the board coincided with their change in direction which led to their shark like reputation today .

outtolunchagain Mon 06-May-13 09:01:55

Sorry that last Paragraph referred to Barclays Bank

Arisbottle Mon 06-May-13 09:09:24

We don't have a problem with inheritance as such, DH used the inheritance from his grandfather to pay off a mortgage however when we know that we have only managed to get to university and to succeed in life because of tax payer coffers it would it would be wrong in the extreme to deliberately steer money away from the tax system.

Arisbottle Mon 06-May-13 09:10:04

But I agree that refusing to engage is not fair.

MaryRobinson Mon 06-May-13 10:15:13

But arisbottle if The taxman thinks it is OK for you to steer money away from his coffers (e.g. By an annual gift to your children to the max value) then I think it is perfectly fine to do so.

Arisbottle Mon 06-May-13 10:16:54

It is just not something I would choose to be involved in.

MaryRobinson Mon 06-May-13 10:18:58

"Involved In" it isn't a scam, it is a perfectly legitimate way of saving money like ISA's or a workplace pension. Deary me

PatPig Mon 06-May-13 10:26:15

YABVU not to avoid inheritance tax.

PatPig Mon 06-May-13 10:26:41

You might as well just send the government a random donation of your money.

quietlysuggests Mon 06-May-13 10:41:50

Gerry Robinson did an excellent series on the importance of wills. Look for it on youtube, it showed several scenarios where forward planning was especially helpful.

Arisbottle Mon 06-May-13 10:49:19

We are talking about the "taxman " as if he is some kind if evil child snatcher .

Our taxes pay for schools , hospitals , police, care for the elderly .

marriedinwhiteagain Mon 06-May-13 10:59:51

Aristotle - but our DC won't be getting a "free" or even subsidised university education. We are looking to fund 54k of uni fees and probably the same again for their living expenses.

PatPig Mon 06-May-13 11:01:42

So why not send the 'taxman' a gift of £10k of your money Arisbottle?

marriedinwhiteagain Mon 06-May-13 11:02:08

Not for us Aristotle. If our parents need care homes they will be required to pay. If my taxes are to increase I want better services.

Arisbottle Mon 06-May-13 11:29:39

We will need to pay for our care, but there are many people who have not had many of the chances we have had , and they will need funded care. I am paid by the taxpayer , I was educated by the tax payer , I have given birth four times in NHS hospitals , my children are all educated by the tax payer . As a student I had loans and grants from the tax payer .

Arisbottle Mon 06-May-13 11:30:32

Patpig, I don't need to send a gift to the taxman . I am content that as a family we pay our share as we should .

Arisbottle Mon 06-May-13 11:33:18

Married we will hopefully be paying for five children to go to university , so I understand that feeling. In fact I hope we have further children so we may pay for more, if they choose to go to university. But I am happy to pay so that clever students who do not have the advantages and luck that my children have , can also go .

sarahtigh Mon 06-May-13 11:46:52

ok so if there is 4-5 million and taxman gets full 40% without any tax planning

that still leaves 2-3 million to inherit so you need to engage about that, about the objects d'art ages of transfer of money to your DC and possibly DH's brothers DC do they get it all at 18, 21, 25 or interest only from 18 and capital at 25 etrc, also what about power of attorney for welfare even if you would prefer accountant had attorney powers financially etc fund to pay for DC at university wetc, no-one is suggesting you engage inb anything illegal or even borderline

do you think ISA's and pensions are dodgy? the governement allow us not to pay tax on these legally

Arisbottle Mon 06-May-13 12:40:00

In our case we were asked if we would like property signed over to ourselves and money transferred so that we could escape inheritance tax. We thought that was wrong.

We have savings , but have never been motivated by a desire to hide money from the taxman . We would also not sign property over to our children so we could avoid paying for our care.

Arisbottle Mon 06-May-13 12:45:23

Again we have pensions but with the purpose of providing for old age, not for hiding money from the taxman .

notfluffy Mon 06-May-13 12:58:16

Message withdrawn at poster's request.

MummytoKatie Mon 06-May-13 13:01:13

I'm really shocked at the number of people who seem to think it is "honourable" to try to reduce inheritance tax. Tax has to come from somewhere and the advantage of taxing inheritance is that no-one has any right to it, no-one should expect it and no-one can rely on it.

Granny may suddenly decide to leave the money to the cats home, spend it on care or just not die at the time when the gas bill is due.

All this "it's taxing the dead" is just emotive.

I would far rather pay more inheritance tax when (and if) my parents leave me money and pay less income tax / VAT / have more midwives at the hospital when I give birth.

Anyway - back to the Op. Agree it is hard to talk about and even more so with in-laws. Dh and I have agreed that we each talk to our own parents about the issues and not to each others. However, if your dh can face the conversation then it is worth it. I find it best to think about the maths and law of the situation - and not to dwell on why it would actually happen.

cumfy Mon 06-May-13 13:09:34

It sounds like DH is not at all close to his parents.

It does seem a little odd to effectively refuse to discuss the matter and indeed avoid even the possibility of the matter being raised.

I would be perplexed in their position; but perhaps there's a history.

Xiaoxiong Mon 06-May-13 13:14:21

YABU not to be as supportive as possible of what they decide to do with inheritance planning. It goes far beyond tax planning and will include everything down to who gets that vase and who keeps that painting.

The amount of time, effort, expense and grief both my parents and my PILs have gone through as their parents have died is just unbelievable.

The only one which was dealt with sensibly was my paternal GM - she called a family meeting with her solicitor and 5 kids, set out her living will/end of life plan, medical power of attorney, provision for care, annual gifts and bequests that would be happening until her estate was exhausted or she died, a full schedule of all her personal effects, who would be a signatory with her on her bank account, passwords for online stuff, all sorts. She and the solicitor docketed up all the necessary personal papers and he kept them in his safe with her will etc. This was when she was in her 60s and in full health. Thank goodness as a few years later she got Parkinsons and went downhill quite quickly.

My dad said it was upsetting at the time but it kept the family together afterwards, unlike other deaths of my grandparents which have been steadily more divisive and acrimonious between their kids as a result of lack of planning and a squeamishness about discussing death and finances within the family. It took 3 years for probate to be granted for DH's grandmother because she didn't trust her kids and refused to discuss anything with them in advance so nothing could be found, everything was hidden away here and there - 10 shares in BT, 15 shares in British Gas etc. No tax to pay in the end but huge administrative burdens and headaches.

Every year now my DF and I have a little "summit" when we're on holiday together, where we go through again what he and my mother are planning and I know who to contact and what to do if the worst happens. DBro and I are already fully aware of what happens to their property and finances and whose responsibility it is to do various things. They're only in their mid-50s.

sarahtigh Mon 06-May-13 14:21:54

if money is left to charity there is a certain amount of tax relief so even that reduces tax bill

regarding signing over property there are rules for instance if they sign their house to your DH and keep living in it, they either have to pay full market rent to your DH or it is considered not truly a gift( gift with benefits) and at least in part liable for tax, you really really need to meet with them to discuss this, and if you do not want that you need to say so to not talk is really unfair as you acknowledged earlier, your PIL are being really sensible and thoughtful trying to provide etc don't throw it back in their faces by refusing to engage, it does not mean you need to agree, certainly signing over a second or third home would be considered reasonable, most Quakers would consider it moral to provide for your family

there is no way they are ever going to need 4-5 million for care homes so they will not be depriving themselves; even in a luxury home it is unlikely the care would be much more than 2-400,000 ( allowing for about 4 years at about 1-2000 per week that is above average) although average time in full nursing care is about 2 years, discussing it now will save lots of pain later,

leaving money in trust for GC is not tax avoidance it is still taxed it just makes sure they do not have full access until old enough the default would be all of the capital at 18 which i think is too young

cumfy Mon 06-May-13 15:26:45

So sarah, in general IHT can be avoided simply by DP giving their house to their child(ren) and then paying the children market rent ?

Why doesn't every rich bastard one do this ?

Xiaoxiong Mon 06-May-13 16:01:19

cumfy there's a reason the lawyers at my old firm called IHT the "i'm in denial tax". Or sometimes the "I don't trust my kids tax". Giving your house to your children but continuing to live in it requires that you a) plan ahead for your death, and b) make the psychological leap that your house is no longer "yours", which may make some people feel they are losing all the security they've ever worked for, have lost their independence, etc.

Also, many people in this country live in houses that are worth a lot more than when they bought it, or that they could only afford on mortgage payments but not renting. Paying a true market rent may be a big huge proportion of a pensioner's (fixed) income, which they may not actually be able to afford notwithstanding that their house is worth loads.

Wuldric Mon 06-May-13 16:56:31

Just to correct any potential misconceptions - you can't just make your house over into your kids' names and watch the inheritance tax bill vanish in a puff of smoke. There is a concept of a 'gift with reservation of benefit' which means that only really works if you pay a market rent to the owners of the property. Most people do not know how long they will live, and don't have enough income to pay market rent on their property to their children.

The very unfair thing about inheritance tax is that it bites in the middle. The poor don't pay it because their assets are generally not worth more than the inheritance tax threshold (by definition). The rich don't pay it because it is an entirely voluntary tax and can be lawfully planned around. It is only the middle income families who have to pay it. This seems to be to be grossly unfair

MerylStrop Mon 06-May-13 17:03:54

As Clouds and Trees said
"Let them have the comfort of knowing that arrangements have been made so that they can forget about it and carry on living their lives."

Draw the line at anything dodgy.

YABU, a wee bit, but your DH and his DB really should at least be prepared to have the conversation.

joanofarchitrave Mon 06-May-13 17:18:48

TBH if your inlaws are like mine, the conversation will mostly involve them explaining their plans, and you saying 'That sounds fine' or 'Oh that's useful to know'. But they want to share the responsibility with you, why are you leaving them to bear it on their own? you really don't have to have or keep the money if you don't want to. And as others have said, the end of life/post-death bit without knowing what people want is utter hell. I have seen relationships destroyed by it. Do you, for example, know what your ILs feel about organ donation? Power of attorney issues? End of life feeding?

I am struggling to understand as my mother and I talk about virtually nothing except death, wills, bequests, funerals and tax planning, but you don't have to be like us. Have the conversation, it's a courtesy to them.

sarahtigh Mon 06-May-13 17:21:52

cumfy yes it can but then it generally becomes the childrens second home so any increase in value is then subject to capital gains tax on sale this has a yearly allowance of exemption about 10,000 but capital gains is taxed at 28% I think, most very rich people would probably set up very complicated trusts most legal some borderline some completely dodgy

for an outright gift to be IHT free you must survive 7 years there is a sliding scale if you survive 1-6 years instead, so there is no point whatsoever of gifting your child your house on your deathbed apart from making who it goes to beyond doubt but there is no tax benefit at all unless you survive 1 year and 1 day after gift

you can make gifts every year tax free as many gifts of £250 as you like and more

you can give regular gifts tax free provided it is out of income and does not diminish your standard of living ie giving away gifts so your income drops to the needing benefits/ welfare level this is called impoverishing yourself and can mean you will not get benefits/ care

if it is a large house the market rent maybe £1500 a month and of course they have no control either over the house which the child could sell or over what the children do with the rental income, so if you give it to your children at age 75 and live to 85 you would be paying a total of 180,000 in rent a lot of pensioners do not have that capital although it would appear OP's PIL's do

MaryRobinson Mon 06-May-13 19:06:44

I've already replied but there was something that drew me back and it was this from your OP he doesn't care for tax dodges. The casualness with which you belittle their "shrewd investments" and "hard work" is breath taking. The blithe manner in which you impugn their character serves only to highlight the defects in your own.

For you to believe them unsanitary in terms of their finances whilst also, simultaneously, being open to receiving ANY of it shows you up as a first class hypocrite.

LondonMan Mon 06-May-13 19:51:20

He has no interest in the actual money and doesn't care for tax dodges

In our case we were asked if we would like property signed over to ourselves and money transferred so that we could escape inheritance tax. We thought that was wrong.

If you are not going to use what is legal as your guide to what is appropriate, that does leave you in a bit of a grey area as to what is and isn't appropriate. What is your alternative guiding principle as to what you will/won't do? Is it that you won't actively seek to reduce tax? So if your employer requires you to register/sign a form to join the company pension scheme, you won't, but if you're defaulted in, you'll accept that? You'll save cash in a taxable bank account, but not open an ISA? If running your own company, you have to actively make a decision to take money out as either salary, pension contributions or dividends, with very different tax consequences. In that case the principle I've suggested doesn't help, so do you maximise the tax bill by taking it as salary?

If it's about morality, why not minimise your tax bill and spend the savings on charity? Or do you think, given a chunk of money earmarked for doing good, government spending priorities are a morally optimal way of distributing that cash?

sarahtigh Mon 06-May-13 21:03:18

there are clear government guidelines on what is legal in regards to IHT

1, everyone has a 325 or maybe 350k allowance spouses allowance can be rolled over till death of 2nd party ( to prevent having to sell the house they live in for the most part)

2, any gift given without any strings ie a clear gift ( not a gift with retained benefits) is IHT free after 7 years

3. regular amounts can be given away each year normal allowance 3000 extra for the wedding of child/ grandchild, small gifts of under 250 also exempt

4. setting up a trust fund for a minor so that the money is appropriately managed until given age ( IHT has already been paid on this if over the 350k allowance ) it is just prudent not to give an 18 year old 500k all at once

none of the above are even remotely tax dodges or evasion or illegal

other perfectly legal ways of avoiding tax

4. putting max into your ISA allowance each year
5. claiming gift aid on chairty
6. tax relief on your pension contributions

things get a bit muddier when you get people who are really employees like BBC presenters among others setting themselves up a a company not taking a salary so no tax at 20 or 40% but rather just corporation tax

Arisbottle Mon 06-May-13 21:17:49

I think people have blended my posts with that of the OP.

I am not going to detail our spending on here but we do give to charity. We just wanted to pay tax like everyone else but appreciated that DHs grandfather wanted to leave a legacy to his grandson and his great grandson. The money never went to us directly but even if it did I am not sure why that would make us hypocrites. I never belittled anyone's hardwork .

I have to admit I assumed everyone just paid inheritance tax, if it was due . I clearly live in a parallel universe.

marriedinwhiteagain Mon 06-May-13 21:38:50

Everyone does pay inheritance tax when it is due. But there are entirely legal ways to reduce how much is due. Forget not that most fortunes have alredy attracted substantial tax bills. I for one see no reason why taxed money should be taxed again if that can be avoided.

TheRabbitCatcher Mon 06-May-13 21:55:53

Thanks for all the messages, well maybe not so much the ones which detail my hypocrisy and other character flaws!

I spoke to MIL about the situation this evening. She seemed pretty relaxed about the whole thing and she and PIL (her ex-husband) are off to talk to someone about their estates in a couple of weeks time. She plans to sell her main house in the coming year, to buy somewhere smaller and to share out the money left in a tax-efficient way. More of a worry for her are the 'things'. She fell out with her brother after her own mother's death and is keen that is doesn't happen again and so she (quite sensibly) wants to give many items away now (especially as she will lack the space for them when she moves). She also asked me if we knew that FIL's estate is going to be split 3 ways, between the boys and his god daughter (which I suspect is a euphamism for 'daughter', but that's not really my business). I didn't, but my husband already knew and has always assumed that would happen.

No talk of the other issues mentioned by posters such as power of attorney or living wills. I don't feel squeamish at all about talking about that sort of thing, but I think that PILs probably do. Far from being frail old folk, they both continue to do intellectually demanding, high-profile work are not really ready to think about the nuts and bolts of their old age.

alpinemeadow Tue 07-May-13 07:00:54

Glad the convo went well, rc! Yes i can see 'things' may have potential for massive fall-outs, so can see why mil is concerned. Can be trickier than money which at least you can divide equally, unlike the things with huge sentimental value.

cumfy Wed 08-May-13 22:13:18

Glad it's all worked out.

It's good to talk.

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