Inheritance angst - shocked & angry

[hoopyloopy2]

MIL died like last year and we are just getting to grips now with the details of her estate. FIL died 13 years ago.

To cut a long story short, it’s emerged that she gave a very large amount of money (hundreds of thousands of pounds) to BIL a few years’ ago after he divorced and to enable him to start his own business. DH and I have never received money from his parents - in fact we didn’t even know she had that kind of money.

It’s become clear that DH’s other brother has also received financial support over the years but nowhere near the same level. DH is certainly not more financial comfortable than the other two now or in the past - so there’s no logic as to why he/we were overlooked. Their mum did play favourites over the years, but there was no rift or issue (that we know of) that would explain why she should have skewed things in such an extreme way.

DH has confronted BIL after working all this out by going through years of bank accounts. BIL says it was a loan that he was intending to pay back at some point, but he hasn’t. Issue now is whether this is taken into account when dividing up the estate, DH & I think it should be as amounts to 2/3rds of her savings. MIL did not suggest it should be in her will. But it is SUCH a significant amount of money. BIL is embarrassed & defensive at being found out, and is implying DH is being nosey by going through their mum’s bank accounts in detail - ridiculously.

To put things in context, DH and I are in a financially unstable situation now. He isn’t working after being made redundant several months ago, for the 3rd time in a few years, all very stressful & difficult. I work but we cannot survive on my salary alone. DH has become disillusioned with his line of work and would dearly love the kind of financial support that BIL was given to make choices -ie start his own business or make a career change. We would never have dreamt of asking his mum to bail us out while she was alive though. But it seems BIL had no such qualms - this has shocked us both.

So are we BU to ask for this large payment to BIL to be recognised in how the estate is now divvied up? Ie that he gets a lot less as a result. I know their mum was entitled to spend her money as she liked, so there is no legal case here. I am worried that asking will cause major upsets & divisions but at the same time, it feels profoundly unfair & will fester with DH (and me) if we just let this go.

For those who asked - nothing in writing to say it was a loan

I'm afraid I expected this, and that you'd be back with whatever account BIL gives about the status of the money. I realise he's saying now that it was a loan, but is that likely to change if he's asked to repay it? And what about any tax due ... will the brother who's had so much more be willing to pay or will he insist on equal contributions?

It's possible, of course, that MIL was happy to leave much less to your DH, but surely also possible that she just hoped/assumed they'd all "do the right thing" when she passed. Either way, I really do wish folk would be clearer about these things so that ill feeling could be avoided

The OP has studiously avoided answering questions about how long ago this money was given.

If it was within 7 years then the trawling of bank statements was valid but I have a feeling that's not the case here.

The only decision to make is how much to destroy relationships over this.

That ship has sailed!

That ship has sailed

It hasn't really.

The brother has had this money for years by the sounds of it.

It never affected the OP before. It's up to her how much it does now.

Anyone who says the OP is 'grabby' or 'vulgar' or 'awful' clearly has absolutely no idea what the responsibilities of an executor are. They have a legal duty to go through the financial affairs of the deceased. The OP's husband has done nothing wrong in going through his mother's bank statements. He would be potentially in breach of his duties as an executor if he hadn't.

It's not clear what the MILs intention was. The fact that the BIL describes it as a 'loan' suggests she may have intended it as an 'advance' on his inheritance under the will. Either to be repaid or, if she died first, to be set against his share under the will. The law recognises such situations under the rule against 'double portions' where the court presumes the parent did not intend to benefit one child twice over at the expense of others. It all depends on the evidence. If it can be established that was the MIL's intention at the time of the payment then that amount could be taken into account in working out the shares due under the will.

It's messy and complicated. There are legal and tax implications. These are life-changing sums of money. OP's DH needs professional specialist legal advice first of all. Then he can decide what to do. If the advice is in his favour but the BIL won't play ball then mediation may be very helpful. And minimise damage to the sibling relationship.

i agree - which is why we never asked for her help when she was alive. I just said that my dh would have loved the freedom to change career or start a business but in the real world, we have had to make our own way. BIL on the other hand went to their mum for a loan.

This is an ethical dilemma. Money and ethics rarely go well together.

I also agree with bluntness.

What happens when we look back over our parents life adding up all our parents did for us and then judging them about this on their death?

How would they know when the loan was made without "trawling through bank statements"? That's what executors have to do. Ridiculous.

bear You may very well be correct that no formal loan arrangement exists, but - I wonder - whether there is any other relevant documentation tucked away for the Executors to discover? For example, one elderly person whose affairs I helped sort out kept very detailed cheque-book stubs going back for several years. If they had made a loan, they would have noted it down on the cheque counterfoil: 'Loan to bloggs'. Of course, other forms of money transfer will not be so informative, and everything depends on how meticulous a record-keeper the MIL had been.

If it was within 7 years then the trawling of bank statements was valid but I have a feeling that's not the case here.

But surely even if this money as given 8 yrs ago, it is still important to go through bank statements to see if any more money was given away within the last 7 yrs. Once one sum has been given, there is often more money given away! It is an executors duty to include all sums given away within 7yrs in the IHT calculation, otherwise they can be prosecuted later.

bearbehind wasn’t ignoring that question - just trying to digest a lot of responses.

The money was transferred within the last 7 years so yes, as joint executor my dh needed to know about it for inheritance tax purposes.

And to all those worrying about 'invasion of privacy' etc, you do know, don't you, that Wills and (after a while) Death Certificates are public documents, and can be consulted by anyone.

@hoopyloopy2 I really think it's for your DH and brothers to sort and is nothing to do with you. I mean that in the nicest possible way too.

Nothing has stopped your DH asking his mum for money when she was alive, he just chose not to. The fact that his DB did has no bearing on what happens now. It was a private transaction between him and his mum. Nothing was in writing or formalised. DB has confirmed it was a ,pan so hopefully he will do the right thing and allow the loan to be deducted from his share of her estate.

Inheritance is not a right, it's a gift, a bonus. Please don't let money be something you all fall out over, you need to be the bigger person here.

MIL is the architect of this, remember, not the BIL

Exactly ... which is why I wish folk would be much more upfront where money and multiple siblings are involved

It might be that some still won't like the decisions made, but at least they'd know precisely who made them

Can I ask whether the loan was given after the Will was written? Because if it was it was obviously her wish all three sons were to be treated the same.
And OP no you are not being unreasonable.

In that case @hoopyloopy2 either way that gift/loan has to be disclosed. You need legal advice regardless of how you proceed with BIL. Executors are liable.

Sorry that you are all in this horrible position!

Either way, I really do wish folk would be clearer about these things so that ill feeling could be avoided

She has been clear, she knew she made a loan and she still spilt her estate in 3 equal shares, a change to her will at the time of the loan or a repayment plan would have been very easy to do, certainly as easy as withdrawing 100k plus! she didnt and she had years to do so, unfortunately for the OP it has to be assumed (and in the light no further evidence) this is exactly what she intended - anything else is conjecture.

Ime of Wills, avoidance of ill feeling is very difficult when large amounts of money or property are involved.

This thread makes it very clear which posters would share with their siblings and who wouldn't. Some people use the greed word to deflect their own, well, greed!

If I have read posts right bil has categorically said it was a loan. If a loan he wont owe he just wont inherit amount owed. If treated as gift, which wouldnt be true, who would pay tax? Just him? Or does that come from estate. Surely bil was expecting to call loan quits at this point in time? Embarrassed, defensive maybe be but he has admitted it was a loan. Can you get him to confirm that via email?

The money was transferred within the last 7 years so

So whether the sum gets treated as a gift or loan, at least some of it will be "added back" to the estate's value and so increase the IHT due

I really hope BIL will opt to pay a greater share of that ...

Florascotia makes a good point. There may be evidence of the MIL's intentions in letters, handwritten notes on other documents, cheque-book stubs,...It would be worth going through any paperwork very carefully.

If she had to sell or transfer assets in order to make this payment to BIL, there may be some evidence in her instructions to or correspondence with other parties (eg her solicitor, stockbroker, financial advisor) as to how she viewed this payment.

BIL has done nothing wrong at all, he asked and he got. My partner has had more money off his parents than his other 3 siblings but they wouldn't dream of saying that should be part of his inheritance.

It was your MILs decision to give the money and her decision to write the will like that. If you're both angry then thats her doing, nothing to do with BIL.

I cannot believe that you are socked and angry that a mother (not your mother) gave money to her son in her lifetime.

If the MIL was married and the IHT value was transferred to her on the death of her spouse, doesn't this double it to 650k, so unless she was extremely wealthy.......

unfortunately for the OP it has to be assumed (and in the light no further evidence) this is exactly what she intended

You could well be right, and in fact I allowed for this possibility in my earlier post; it's just that I can't help thinking of the very many who say "ooooo it'll all be okay - they'll see each other right!!" rather than actually doing something about it

Sadly, I've also seen the chaos which can result from this and it's not pretty

OP, what has the BIL said. You said he's said he intended to pay it back.

Do you know for sure that he's not intending on declaring this as a loan?

Why are people not open with other family members?

If only MIL had said 'I loaned Fred XXX towards his new business - I know you'll sort it out when I'm gone, if it hasn't been repaid'.