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.

I'm sorry you're in this situation OP and think more knowledgeable people have already given plenty of advice, but I'm just gobsmacked at the numbers of posters who think you should just suck up this situation because 'it's what MIL wanted', when the majority of people commented on a recent inheritance thread, saying that it would be outrageous to leave money in an unequal way.

If this money was a loan, shouldn't it be listed as a liability in BIL's company accounts?

And I'm intrigued to know what BIL2 thinks about it, as he has received some money from MIL but, by the sound of it, nothing like as much.

In an ideal world, both the BIL's would do the decent thing and have the money deducted from their share of the estate. But I think that may be unlikely.

It's a horrible situation to be in.

But of course x refused and there was nothing in writing. Funnily enough we don’t speak to x anymore. I hope the 20k keeps her happy. Personally I couldn’t rip my own relatives off like that.

But there is a big difference between everybody knowing this and the reason behind it, rather than a case where a parent has helped out their child, regardless of the amount involved. Parents help out their children in many ways, be it financial emotional or any thing else. Why should the recipient of help given freely and lovingly then have to justify it and say oh well you have anything that is left. What if one sibling has their own children and the other has none. Parent provides all childcare free of charge until such time as dgc are old enough not to look after themselves, That is quite a huge saving. Should the cost be deducted from inheritance?

I would imagine that the loan was invested in the business by BIL, and is listed under the Director's Loan Account as a loan from him personally.

I totally understand where you're coming from OP - I cannot imagine treating my children differently. Although I know that my SIL told her parents that they shouldn't leave anything to DH in their Wills 20 years ago, as 'he didn't need it'! PIL felt differently and said very strongly that their assets would be shared equally between their children. Funnily enough, now that MIL has dementia, the same comment has raised it's head again. Fine. We won't be fighting over it - but when you see SIL not giving MIL the care she needs, to save the money for herself, it's pretty galling. Families! Thank God DB and I are both totally open with each other, and trust each other implicitly.

Sad for DH that his sibling relationship has broken down over money - DH has altered his Will so that neither SIL nor her DC will get a bequest from him when he pops his clogs.

Aren’t gifts over 3k a year taxable?

I’d point out to bil that either her repays it as a loan, or as it is now accountable for he will need to declare it as a gift and pay the relevant tax.

Only if you die in the 7 years after is the gift subject to inheritance tax and only if there is any IHT at all on the estate. I think 90% of estates are so little that there is no IHT.

Perhaps the bil said it was a loan to deflect blame/embarrassment when the issue came to light and he was challenged. And if the mil never asked for it back, then really it was a gift.

The thing is there’s the moral and the legal. As so many other posters have pointed out, it was the mil’s money. Like it or not, she chose to give a large sum to bil. She could have spent a fortune on cruises, home improvements, the races... what’s spent is spent.

The moral issue relies on people being, well, moral. If the bil says, Actally, it was a gift, then it it is absolutely fair for other siblings to feel aggrieved, but with no paper trail indicating that it was a loan, then that’s that.

Perhaps the bil said it was a loan to deflect blame/embarrassment when the issue came to light and he was challenged

The same thought occurred to me, Irma

Call me a lousy rotten cynic but, since there's nothing in writing, I'd be surprised if the BIL isn't researching his own tax liabilities around gifts/loans even as we type

It may just be a question of looking in the right place for a paper trail - Companies House for example.

But there is a big difference between everybody knowing this and the reason behind it, rather than a case where a parent has helped out their child, regardless of the amount involved

If it was a gift I'd agree. But he's admitted it was a loan. So morally he should pay it back.

I still believe that if your MIL wanted the money paid back she would have said so in her will. You cannot overwrite her wishes with yours.

Other way around craiglen. The loaned money still belonged to her so the default position is that it forms part of her estate. If she didn’t want it back she should have stated in her will that it was to be written off.

You can only go by what was in the will. She could have chosen to mention the loan but she did not. The only assumption therefore that can be made is that what was in her will was what she wanted.

Yes, you have to assume that what’s in the will is what she wanted and what isn’t, isn’t. Therefore you have to assume that she didn’t want to give BIL anything other than his share of the estate, and specifically that she didn’t want to grant him remission of the loan.

Unless the loan is repaid or retrospectively transferred to a gift it is still her money and should be distributed under the terms of the will. If that’s not what she wanted then she should have specified otherwise.

Sorry if I missed it, but what does the 3rd brother think? Even though he received some money, but "nowhere near the same level".

craigglen - do you really think this mil was that thoughtful?!! She apparently did bugger all to make her intentions clear to her executors, beneficiaries or the taxman when she gave one of her children a massive amount of money. I would not be at all surprised if the will is a joint will, entirely unchanged and untouched since her dh died 13 years ago and that she gave it zero thought after the date it was written. You have to be stupendously silly/financially illiterate to loan or gift someone hundreds of thousands of pounds and leave no written records of your intention or purpose - and/or hugely trusting the beneficiary of your generosity has a few morals. The only written evidence she left was that she wanted all her children to have equal financial benefit from her estate, not that she wanted one of her children to benefit hugely more than the others and was desperate to get that money out of her estate before she was prevented from doing this by her own will!!

roundaboutthetown
We don't know anything about the health or age of the MIL. She may have been in her 80s/90s and just not thought to update her Will.
Although the majority of us are competent enough to record our wishes now, who knows what we might be like in 20/30 years?
It sounds like she was a good woman who had sound relationships with all of her sons - and would probably be mortified to know the trouble that had arisen from her not making her wishes crystal clear.

But then again, I would expect my children to behave honourably. I just hope BIL does.

Come back op, we have questions!

Roundaboutthetown - I haven't said whether I thought the MIL was thoughtful or not, or whether I agree that her will is the right or fair way to split the money. I've simply said that her will is the record of what she wanted - even if she had wanted something different who can say what she did want (see my previous post about my relative's will).

It would be interesting to know when the will was made.

I, she could have mentioned the loan. How bothered was she by the loan?

How do you tot up all the money and gifts as in literal presents any child gets. I mean dd have age gap.. When we go older dd has had five years more spent on her are we supposed to reflect this? Or dd larger bedroom?

When it comes to several hundred thousand pounds, I think even at 90 I would be cognizant of the fact that was one hell of a lot of money and a proper record should be made of what I was doing with it and why so as to avoid problems down the line! If I was past the point of recognising that obvious fact, I hope I would have had a power of attorney written up in advance of that point of senility so that someone else could help me organise my financial affairs... A little bit here and there is one thing, a few hundred thousand quite another.

I have tried to keep up with the thread so I hope I haven't missed anything... does anyone know if the will was written before or after the loan was made?

A few quid on presents here and there or a larger bedroom is hardly the same as several hundred thousand pounds to set up a business.

It sounds like MIL did not leave a paper trail to ensure that her wishes were clear.

The BIL has admitted that it was a loan. In theory, the loan remains repayable to the estate before the estate is distributed. If he chooses not to ensure that it is reflected in the calculation of the estate then he will be in breach of his duties as an executor.

You have absolutely no idea of what you'll be like at 90!

I don't need to know - I plan to ensure I communicate openly with all my children at all times and make sure I have put plans in place for what to do if I become incapable of organising my own financial affairs and communicating with my children properly before I reach an age where senility/not realising a huge sum of money is a huge sum of money is a distinct possibility...