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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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Original poster

To think my step-sis should pay the money back?

121 replies

Tainbri · 18/02/2018 10:31

My Step sister borrowed a large sum of money from my step mum (her mother) and my dad which she and her DH used as a deposit for their property. The property as far as I know is in their joint names. There was no formal loan agreement put in place because it was "family" but she has (up until her mum died) been paying interest on the money. Anyway her mum died last year and now my dad wants the money paid back. Step sis won't even talk about it and says it was her mum's money so now it's hers. Obviously morally I think she should pay it back, but legally do you think my dad has a case given there's no written agreement? He doesn't want to waste more money on solicitors if he doesn't stand a chance.

OP posts:

Tink2007 · 18/02/2018 11:02

Legally, your Dad has not a leg to stand on. I had a similar issue with my estranged Dad was due to give me inheritance from my late grandmother. However she hadn’t written it into a will, it was only verbal. Safe to say he refused to give it over and as there was nothing written there was nothing that could be done.

I asked a solicitor friend and they confirmed it.

chocolateworshipper · 18/02/2018 11:03

I agree with Worlds that the easiest thing to do is to deduct it off what she will get when he dies

LIZS · 18/02/2018 11:05

It would be worth formalising any compromise they do reach to avoid being accused of concealing money if he is assessed for care fees. If the money is treated as a "gift" and she died less than 7 years later its value reverts to the estate for iht purposes, although that may be nil if it all passed to spouse or was within the limit anyway. Does he need this money? Is it really worth the fall out of arguing?

RandomMess · 18/02/2018 11:06

Actually your Dad can prove that the money was loaned and that your SS has been paying repayments- because if that I believe it is enforceable?

Had she never made repayments he couldn't do anything about it!

I blame Judge Rinder for my flakey knowledge but it's always if people have been mAking repayments that the court can enforce it as a loan.

BewareOfDragons · 18/02/2018 11:07

I disagree that your Dad is being awful if it was joint savings that they lent her on the understanding that she would be paying it back. They clearly could't afford to just give it to her. While I'm sorry her mother has died, your Dad is still here and needs money to live on. His money. The money he was expecting to be paid back.

The stepsister is taking advantage of her mother's death by refusing to pay back your dad's money. And it was his money, too.

Re pursuing it now, it will all be down to paperwork and proof that it was a loan. Plus only 'half' of it will likely be considered her mother's estate; the other half is your father's. If she doesn't have any siblings, perhaps the best chance of your dad getting any of the loan repaid is to agree that only half of the remaining debt needs to be re-paid, ie his half.

Original poster

Tainbri · 18/02/2018 11:10

Thanks very much for all the advice. Yes she was making repayments until her mother died and I always understood it was a "loan" but like a say, nothing was actually put in writing.

OP posts:

BewareOfDragons · 18/02/2018 11:10

Ah, I just saw the post about your dad's frail health.

I think he should pursue the money.If he needs care, the council will likely pursue it anyway. I think he can prove it was a loan, and the council certainly won't allow that to be written off under the circumstances. Perhaps someone should tell stepsis that the loan must continue to be repaid or she is taking a chance that the council will attach a lien to HER house to get the money back if your father goes into care. It wasn't a gift; it was a loan.

ADishBestEatenCold · 18/02/2018 11:10

"I think before too long may need residential care rather than continuing to live in his own home"

Does your Ddad own his own home, Tainbri (presumably with your Dstepmum when she was alive), or is it rented?

ElsieMc · 18/02/2018 11:15

Tink - I don't think this is quite the same. Step sister in this case has acknowledged the loan by paying interest on what she is now denying was a loan. Sadly for you there was no such legal bequest.

I gave my dd and her partner a lump sum towards her house deposit. She said she would repay it, but I told her that it was a gift. She saved up the majority of the deposit herself which she did by selling her car etc. On this basis I was happy to help.

Op I think your dad would need to take legal advice, not advice however well meaning over the internet.

My instinct tells me he may not get very far but this is appalling behaviour by your step sister. Clearly she no longer wants a relationship with your dad. Money always brings out the worst in people and you now know who she is.

Original poster

Tainbri · 18/02/2018 11:17

It's a rented house, so no equity there. They had some joint savings, pensions, policies etc. I'm trying to go through everything this weekend

OP posts:

RandomMess · 18/02/2018 11:22

I would email your step sister and explain that the loan debt didn't die with her Mum as it was joint savings and the council will be looking into his finances as care Home fees are on the cards. I would also include that although there is no written agreement because the loan transaction and repayments are clearly visible the the debt is enforceable.

Keep the tone light and from the angle that the council will get legal involved as it looks like it is deprivation of assets rather than it appearing that you see it as "unfair" IKSWIM

Happies · 18/02/2018 11:24

How long ago was the loan made before her mum died?

And how much?

If it was above £7k ( I believe) and the person dies within about 5 years of making the gift, it would be subject to inheritance tax.....

But if it's a loan then it's different....

Might be worth mentioning it to her and see if that changes her mind....

ChishandFips33 · 18/02/2018 11:27

If it was gifted, doesn't it need to be declared if it was within so many years of the death of the person gifting.

Could it be seen as deprivation of assets if the DF needs care?

SheSparkles · 18/02/2018 11:31

Can I give a different perspective on the “interest”. It may have been the case that your stepsister was paying the amount that the money would have generated in interest in your dad and stepmum’s account, because they were using the money for an income rather than as capital. This is a relatively common thing for people to do. The person who receives the money doesn’t have to repay the capital, but the income the money would have generated in interest.
(I hope this makes sense-it does in my head!)

RandomMess · 18/02/2018 11:33

@SheSparkles but the stepsister is no longer paying the interest!!!

Morphene · 18/02/2018 11:34

I agree with pp, it was either a loan in which case it should be paid back, or it was a gift, in which case it needs to be declared for the purposes of inheritance tax.

Lichtie · 18/02/2018 11:34

It's a potentially exempt transfer for IHT purposes. Is considered part of the estate if the person gives ING the gift dies within 7 years. But it does not get paid back to the estate.... It is just taxed as if it is. Given what OP says it is irrelevant as they will be well within the nil rate IHT band

DeathStare · 18/02/2018 11:34

So this poor woman "borrowed" money from her mum to pay for a house deposit, and her mum was happy with her just paying the interest back for now. Her mum dies, without leaving a will and so leaves her children nothing (I assume not her intent). At that point the woman's step-dad (who has now inherited all the mum's money at the expense of her children) decides he wants to up the step-daughter's repayments whether she can afford it or not.

I don't think I've ever seen a better story to demonstrate why everybody should have a will - because your next of kin won't necessarily look after your children in the way you might have hoped.

roses2 · 18/02/2018 11:37

If there was no will then won't all inheritance automatically go only to the spouse?

Therefore your dad can choose whether or not this loan is deducted from any inheritance he wishes to pass on.

Blackteadrinker77 · 18/02/2018 11:38

I would email your step sister and explain that the loan debt didn't die with her Mum

How cruel can you be?

If someone treat my child like this after I died I'd haunt them!

grannytomine · 18/02/2018 11:40

DeathStare it doesn't sound like there is alot of money but there is a need for this elderly man to be cared for. It was joint money and step daughter needs to address this, she may not be in a position to pay it all back but she can't and shouldn't ignore it.

SheSparkles · 18/02/2018 11:40

@RandomMess, yeah I know she’s no longer paying, which isn’t right for whatever reason, I was just trying to offer a different perspective on whether or not there was an understanding that the capital should be repaid

Allthewaves · 18/02/2018 11:43

Legally no she doesn't have to pay it back. Tbh I'd let her have it. She has no inheritience now as mums estate passes to her husband, your dad and then his estate will go to you. She will legally get nothing as mum didn't leave a will

RandomMess · 18/02/2018 11:44

So let's ignore the elderly vulnerable person needing the repayment of interest in order to live and wait for the council to wade in and potentially first step sister knows is that she gets summoned to courts?

I don't think the op should be rushing into it (it sounds like Mum died months ago) and she doesn't have to be asking for capital repayment but there does need to be discussion around the loan, the interest payments and that the council may insist on capital repayment!

Allthewaves · 18/02/2018 11:44

Plus any payments she made should have been taken off the capital - charging interest us awful to family

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