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

[Tainbri]

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.

When one half of a couple dies, any children usually have to wait until the surviving partner dies until they inherit anything from the marriage, surely? I'm not talking about personal effects, but joint savings or property

Depends on the will.

Without a will, if the child is a step-child of the surviving spouse they may well never inherit anything regardless of whose money it was initially.

Have a read about deprivation of assets. A sum as large as £20k could definitely be viewed as coming under this and the council could seek to reclaim it if/when he has to go into a home. It won't the dad with limited finances chasing it, it will be a bigger, nastier entity with the resource to enforce her to sell and return the money if they consider it falls under deprivation of assets.

And to all those shouting, 'she's just lost her mum' - where does OP say this was recent? The stepsister has gone NC which suggests to me it is not that recent or they wouldn't have had time to realise she was NC. She has chosen to cut herself from non-blood relatives because she gives no fucks about the mess she is leaving her stepdad in.

All the OP's responses fail to address the question of who's money it was- was it both dad and stepmum's money or did it come from money that belonged to just the stepmum? If it is money that her dad contributed to, he has a right to get some back (some not all, if it came from both of them). If it is the stepmum's money, and there is no will (meaning the stepsis won't get anything once the dad dies/or his assets will be used for his care) then the OP and her dad can whistle.

Whenever I read any post in which the OP seems to completely ignore repeated questions in their responses, I am instantly dubious about their 'poor me' stance.

So we seem to have two opinions here on MumsNet:

"My wife just died. She lent/gave her daughter - my stepdaughter - £20k. I now want that money back, as I might need it for care home fees; and if I don't, I can leave it to my own daughter."

"My mum just died. She lent/gave me £20k to help me buy a house. She didn't write a will, so everything goes to my stepdad. And unless stepdad writes a fair will, his daughter will inherit everything. So I don't want to pay it back as it means I get nothing."

They were married 20 years is legally viewed as joint money regardless I would have thought!

" so everything goes to my stepdad. "

Stepdad or dad?

How long ago was the money loaned/gifted - because you can gift under 'annual exemption' and do one year in arrears, this doesn't come under the 7 year rule either.

And for those saying the council will be interested/seen it all before - a joint account in those circumstances are considered to be 50-50 - so you could be opening up a can of worms - 'annual exemption' x 2 gifts, a year in arrears. All of a sudden we are looking at 12K in legitimate tax avoidance gifts. And I believe it is 1K allowed for both Christmas and birthdays

and if I don't, I can leave it to my own daughter."

I may have missed it, but I've not read anything that suggests that he wants to leave the money to the op.

FWIW, I can fully understand the stepsister's POV too, if she's viewing that money as her inheritance.

I have no idea who is legally or even morally in the right here though

It sounds as if your dad doesn’t have a lot of money. If he did, I’d say it would be horrible to attempt to get it back. However, it sounds as though he needs the cash. In that case, I would pursue it. He could go with the angle it was an agreement between the sd, his wife and himself. That way he’s implicate in the agreement.

Solicitor here. IF it was definitely a loan it will be due to stepmum's estate. Assuming no Will, then this would be to her husband so it doesn't really matter where the money came from - it is should be repaid. The tricky bit is proving it's a loan. The presumption when money passes from patent to child is that it's a gift. The burden of proof will be on the creditor to show it was a loan not a gift. This will depend on the evidence. It could well get very messy and antagonistic. The local authority could be your friend here as, if your dad has a financial assessment they will go though everything with a fine-tooth comb. It may be worth your dad getting advice as to whether he is at risk of 'deliberately depriving' himself of assets by not chasing the debt. I don't know the answer to that. I guess the question is, if the money is going to be spent on care anyway, is there any point in you and your dad going through the stress and expense of getting it back? These things can be so messy so think carefully and pick your battles. And it's likely to cost more in legal fees now than if they'd got a simple loan agreement drawn up in the first place. Not helpful I know!

@FloraPostIt would the fact that regular payments were being made by the daughter not alter things?

I agree it may not be worth perusing but the council will likely have a view on it!!!

Regular payments would certainly point to it being a loan. However, as others have said upthread payments for deposits usually have to be gifts at the insistence of the lender and so if her mum had signed something to that effect, it points the other way pretty strongly. Not an easy situation and I don't envy the OP

If she is looking at her mother's estate as being hers, hence the debt is cancelled then your father would be correct in saying that his estate will, ultimately, be for his children, not her. Depending on the sums involved that interpretation might change her mind if she stands to lose out.

I work for a LA in ASSD finance and we would not consider this to be deprivation of assets. Deprivation occurs when a service user deliberately disposes of assets when they have an existing care need. It only really becomes deprvation when there is a deliberate avoidance of care costs.
I think you should leave your step sister alone, it's not going to make any difference to your dad really.

I work for a LA in ASSD finance and we would not consider this to be deprivation of assets. Deprivation occurs when a service user deliberately disposes of assets when they have an existing care need.

How on earth would you be able to tell this situation apart from a similar situation where the money was given to a child to avoid care home costs. It sounds like it would be an easy loophole to exploit.

I assume because of the distance between the money being given and the requirement for care.

In this case getting the money back just to pay for care costs when presumably the money was suppose to help them with a house seems a pointless folly

That said I imagine your Dad is panicking because he feels he needs money to pay for care I would start the ball rolling on that and helping him get that sorted and reassure him he does not need the money to sort himself out

He will need this money if he wants much say in what kind of care he receives though.

Bananmanfan Interested in this as I was told spending or giving away ANY money whatsoever from around the ages of 40-50 could be considered deprivation of assets and there is precedent apparently - I'll have a google see if I can find it. For example, we are in our late 50s early 60s, we took money from our pensions, paid off debts and had the house rennovated. We were told all of this could be considered deprivation of assets. Now we can sit back and worry about it for the next 20 years in case one of us becomes ill.

Sorry to derail thread was just interested in the poster's experience working in this area.

Staples I have heard similar. That even if you didn't have a current need, if you have offloaded cash/assets within the previous 10 years or so to when a need arises, that it can be considered as deliberate.

There is some very helpful information on Age UK's website - fact sheets talking about all this which I think might help the OP:

www.ageuk.org.uk/information-advice/care/social-care-and-support-where-to-start/paying-for-care-support/deprivation-of-assets/

There are a couple of things that don't sit right with me. Your step sister borrowed money and had been making regular payments until her mother's passing, yet, that doesn't count and she still owes the full loan or even more than the full loan because she didn't "finish" paying interest, is that correct?
What was the plan? At which point would she have been paying off the capital?
Also, how long was the loan period meant to be?
If they lent her the money in their 60s/70s with a repayment over 20 years surely they would have known there was a chance they won't be seeing the full amount back.
I have a feeling the money was given with the understanding she would be paying a small amount back each month, without any clear agreement.