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.

Your MIL's three sons (if they are the only beneficiaries) need to have a conversation and work out together how the money should be split. Of one son agrees that he had a loan and this should be taken of what he inherits, then good on him. The same applies to the help the other received.

If either or both of them decide that what they have had previously should be ignored and the terms of the will should be applied, everyone involved need to accept that and move on.

The best result may be a compromise. In the meantime, you and your DH need to expect only what you are legally entitled to under the terms of the will and then anything extra is a bonus.

You’re all claiming the op is grabby, but if that (rather huge) loan was made within 7 years of her death, it could be subject to inheritance tax. Is ops husband supposed to cough up for a third of that aswell then? Hell no!

hoopyloopy2

Is he entitled to do it?

yes

but the question remains, why did he do it? if the the money balances, and no-one is coming out of the woodwork to claim any "debts", I can see no reason for for him to be going through her bank details in such a way.

I think the problem is the person who made this unfair is your MiL. The fact you did not know she had this amo7nt speaks volumes. However harsh it may be these things go on the intention of the person whose estate it is.

I assume she was not s young person and the loan happened awhile ago she had plenty of time to address the loan one way or another, she didn’t and I assume left the estate to be divided up 3 ways.

Here the moral, legal and ethical play is to follow her wishes and they are clear it is split equally.

You seem to think asking your parent(s) for help is morally wrong - it isn’t and clearly given the money left in her estate she had the means to do so. The fact you were struggling and didn’t ask and she did not offer has no bearing

It's irrelevant when the will was made, wills can be changed very easily. The mother clearly knew it was not paid back. She still elected not to change her will

It's fuck all to do with the op and her husband. She gave him the money when she was alive and elected not to change her will.

And I've closed two estates, at no stage have I trawled through years of bank statements. The balance at the time of death is all that matters.

As an executor surely you go through the last seven years of accounts to ensure all assets have been included.

Exactly sofa.

And I've closed two estates, at no stage have I trawled through years of bank statements. The balance at the time of death is all that matters.
Bollocks
the 7 year IHT rules mean that any estate near the limit - or evidence that it was over the limit should be checked for diminution gifts

How would you know without going through and checking?

We signed 'to the best of our knowledge'. As far as we knew there were no gifts made.

The solicitors handled that. I did not go through anyone's bank statements..

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

Unfortunately, that's your problem right there. I saw this happen in my exes family, where "loans" were made on the basis that "it's his inheritance given early" but no alterations were made in the will to reflect it, leading to a massive fall-out when the parents passed

You're quite right that there's no entitlement to the money and equally right that there's not much to be done unless BIL chooses to share some of what he's had (which sounds highly unlikely)

Let's not pretend that it doesn't sting though ...

If BIL agreed it was to the ‘best of his knowlege’, he would be lying (if it was within 7 years). Op WAS it in the last 7 years? It’s fairly important.

A few pounds, uncouth, vultures..

Hundreds of thousands of pounds obviously would make an enormous difference to most people's lives < except some mnetters> freedom to work in a job you love, too live in an area you live, to nurture your children...

But unfortunately, unless your bio agrees, I don't think you can do anything about this op. I'm gutted for you.

ShaniaTwainAndTheRubyKitKat
If BIL agreed it was to the ‘best of his knowlege’, he would be lying (if it was within 7 years). Op WAS it in the last 7 years? It’s fairly important.

They'd all lose out. The tax would affect all 3, and OPs DH would get even less.

Errr if that was only 2/3rd of her saving then sounds like you'll be in for a pretty life changing sum regardless so YABU! It's not your money it was hers so none of your business really.

i'm gutted for you

What? Why? The mother had every right to do with her money what she wished when she was alive. It was not the ops money or her husbands, it was the mother's to do with exactly as she pleased.

Quite simply, if MIL had a property and cash which could go over the IHT limits the executors have a legal obligation to run through the bank statements. "As far as we knew" doesn't wash it with HMRC if they decide to check. OP Please ignore the comments criticising your DH for checking the bank statements. I would advise all of my clients to do the same or a very nasty IHT bill could crawl out of the woodwork at a later date when the estate has been distributed.

If it was a loan that he himself says he was planning to pay back then surely it should be included as part of the estate when it's been divided up.

As others have said, if MIL had wanted the "loan" taken into account, she would have specified it in her will.

If you're going to start looking at what money she gave to who - where does it end? Do you go all the way back to what was spent on each son when they were children?

I find it extremely odd that you and DH would never have dreamed of asking MIL for money while she was alive, but now you are very keen to extract as much money as you can.

If it was a loan then the loan should be repaid to the estate!

That would depend on whether there was anything in writing to prove it was a loan in the first place. Unfortunately it sounds as if MIL did most of this verbally and the BIL may be unlikely to admit it was a loan now

We all know OP has no "entitlement" as such, but f this is unfair at all, I agree with the PP who said it's the MIL who made it so

OP - Get proper legal advice. This is a minefield.

You cannot lend give hundreds of thousands of pounds to someone without a tax liability if it's not repaid.

The executors are legally obliged to follow tax and estate law. They cannot ignore this.

Why the hell would BIL pay a loan back to the estate of his dead mother? The money he borrowed was from HER. He doesn't need to pay it back as some sort of money grabbing sibling's inherited scheme.

Obviously if taxes have to be paid on the money BIL received, BIL should pay them.

At the very bare minimum BIL should give up any claim to what money MIL left as technically he was owing her serious money when she died. From the sounds of if it he seems to have no ideas of paying back unless there is record of this. BIL owes money to the estate as he has admitted it was a loan. Did he agree to pay back when his business turns a profit or what? Definitely seek legal advice. But try not to be too involved in the sibling rivalry, it’s non of your business, it’s their family. Don’t be stocking the fires of disagreement etween them. Encourage them to sort it out between themselves. I wouldn’t want DH being involved in my family matters.

If your BIL had taken a loan from a bank say, he would have had to pay it back and if he hadn't taken out any life cover etc, even if he had died, his estate would have to pay it back first before splitting any remainder between family etc.
We borrowed from my MIL years ago, we paid her back every month and took out a life policy so that if anything happened to her during the life of the loan, then we could repay her estate so it wouldn't affect my husband's brother or sister.
I think it should be included in her estate and your BIL accept that he has received his inheritance already. Whether there is enough left over to give your husband and his other brother an equal share is down to them to argue out with the one who has received the lions share!

She can give her money to whoever she wants - did your DH ever ask for money and told no? The others probably did and she was in a position to do so, if you don't ask, you don't get.

Leave the dead woman's wishes exactly as they are.