Family want us to give financial gift back....

[Liskenly]

A couple of years ago DH's grandfather gave us a substantial financial gift (he was very wealthy). We'd brought a house that needed a huge amount of repairs and this money funded all of the repairs. We never asked for this money it was a spontaneous gift - his view was that we'd make better use of it than he did. We were very close to him and cared a lot for him prior to his death late last year. He has sadly now passed away. He has left the main part of his estate to be split between his 12 grandchildren (many of whom haven't seen him in the last 5 years). They are now insisting we give the gift back (taking it from the inheritance) so it can be divided between the 12 grandchildren with the rest of the of the estate (it has turned rather nasty). We're not wealthy, but we are comfortable, but can't afford to give back the money - basically it means we'd have to give £10k back to them as well as not have our 'share' of the inheritance. I've not met 5 of them but now recieving really nasty emails, texts etc. What would you do?

Deal only with the Executor/Executrix. Any correspondence can just be batted back "I am dealing with the Executor".

I am confused here. Your DH is - if I understand it - his Grandfather's grandson so surely he will be entitled to a 1/12th share of that part of the estate? You have had the earlier gift [before his death] and that does not affect the division which is calculated at date of death [unless there is some specific provision for that to happen in the will]

What they may be saying - without justification - is you give back the £10000 [whatever] and we each get an extra £800! There is a presumption that between families any financial transactions are not contracts [re McArdle - 1951 - CoA]

It is complicated I'll admit, it's a difficult idea to grasp that gifts given in the past seven years still count towards your estate when you die! It doesn't make a lot of sense really.

It was also mentioned on another thread recently where a parent had sold their house and (intended, possibly not quite happened yet) to give all the money to one child - people pointed out on there that it could be deprivation of assets as well.

As I said, I know that HMRC did look closely at items declared as gifts from the estate. Similar to the OP's situation, my DH who was the executor didn't know anything about them until after the person had died. The estate covered the IHT due on the gifts, which were recent so came under the 40% rule.

I can see both sides of this, while I think an inheritance is a bonus there are those who think X has had more money than me already and the general pot is further reduced by the IHT. Never underestimate the potential for discord over a will!

Hope it is sorted out soon OP.

@Witchend well, I can only speak from personal experience as an executor on three different occasions, and for the 2 that had given cash gifts in the few years prior to their deaths (and there was also a large iht liability on one), the tapered sum was added to the iht payable. I had received one of these cash sums (from my mother), but HMRC never asked for (tax) money from me, but from my mother estate to cover the sum she had gifted me. So yes, I paid inheritance tax on it, but not from my own pocket, from my mother's estate - money that would have passed to me if I had not received the gift in the first place.

Where's the OP?

The will is the will. If gifts during life were considered, where would this stop? And if your DH's grandfather thought this should be taken our of your share of the will, he could just have amended his will. And he did not.

Have a succinct reply and keep repeating it. You are being entirely reasonable.

It's a gift , in law they can't ask for it back

This aritcle might be of interest to do with life time gifts.

hullandhull.com/2016/10/validity-inter-vivos-gift/

I think you need to get some legal advice on this. This is a tricky question, especially if the family members are trying to say your Grandad lacked capacity to make the gift.

But gifts during life are considered-hence the estate being liable for IT.

This is presumably how the others know about it?

I'm going to go against the grain here and say that the other GC may not be all be CF.

We don't really know very much about the actual sums of money involved or the circumstances of the other 11 GC. The OP has said that 'many' of them hadn't seen the GF in several years, but it is quite a jump to assume that these GC were heartless bastards simply waiting for him to die to they could get their hands on as much of his money as possible. Perhaps they live overseas or have caring responsibilities. Perhaps they called him every week to make up for the fact that visiting in person was hard. Or perhaps the GF wasn't a kindly benevolent gent and played favourites. We just don't know. We also don't know if some of the other GC were equally involved in caring for the GF in later years.

We also don't know the extent to which this gift has reduced the value of the estate. Quibbling over 1% might indeed be petty. But if the gift has slashed the value of the estate then I can absolutely see why the other GC are questioning it.

Equally, we don't know whether the OP is actually significantly better off than any of the other GC. Perhaps for some of them, the money involved could be truly lifechanging and could have been put to more use than doing up a house. There might be illnesses or children with disabilities.

Of course, OP might be completely right and they might all be CF. But life is rarely that clear-cut. Legally my (limited) understanding is that the OP has no obligation at all to make any form of redress for what has happend. But only she can judge if she is morally in the clear.

I've been gifted money by relatives & we had legal agreements drawn up by solicitors. Did yourselves & your grandfather do this or did he just give you the money?

@Theknacktoflying

Spot on!!

Thanks all, there is a lot of advice on here. Sorry I've not responded recently, been in meetings! Just to clarify we didn't buy the house with it - we had already bought the house, we then used the money to make the repairs on the house, meaning it is not available to do anything with - it is all spent. In terms of amounts we we're gifted £50,000, the inheritance is around £40-45k per child - therefore inheritence tax is an issue here, but as far as I understand it (and I don't claim to be an expert here!) this is the amount after the tax has been taken into account. The others know about it as we were upfront with the other grandchildren who had contact with grandfather when it happened (they have had gifts over the years - one for example was gifted a house about 20 years ago) but these things don't seem to be in as much dispute. The ones we see are not the ones disputing, it is the ones we don't see who are disputing. We will hand this over to the solicitor who is dealing with all of this. It is far more complicated than I first realised.

we know it is a substantial amount as inheritance tax is payable so the estate is worth a minimum of over 325K

we also know that the gift OP's DH got was worth more than 1/12 of the estate as the others think they owe 10K over and above forfeiting their share, 10K split between 11 other people is about £900

if the will has written after the gift, the grandfather knew that the gift was given and still wrote for estate to be divided 12 ways so the obvious conclusion is that he wanted them to have gift plus a 1/12

if the will was written before the gift was given they ( the other 11) could argue that the gift was part of OP's DH's share but they would need evidence that the grandfather was giving them their inheritance early, if the gift was greater than their share, they would still keep the whole of gift as grandfather would have known that £Q ( the gift) was more than a twelfth of the estate and gave it them anyway,

in either set of circumstances the Op's DH owes the estate nothing
and inheritance tax is paid by the estate before distribution

the up shot is that you need a solicitor and a copy of the will, you can get a copy easily if probate has been granted

If the ones, who were gifted substantial amounts over the years, such as the house, I would have thought this would set a precedence for your gift being a gift and not included in the will. I would also be using this and any evidence they have to give to you. A solicitor would be able to advise you of this.

sorry cross poated a bit, it is no surprise that the ones that saw him the least are kicking up the most fuss

@evilharpy actually I think you are right. The double portion rule does only apply to children and not grandchildren so ignore me! There may be a "hotchpot" clause in the Will requiring lifetime gifts to be brought into account. But if there is nothing expressly in the Will then my view is that you get to keep the gift and your share.

The IHT posts are a bit of a red herring. If the gift itself was for more than £325k then the OP's DH would be liable to pay some tax. Otherwise it is all on the estate (unless there were other gifts made before the gift to DH taking the running total over £325K then things could be more complicated but let's not open that can of worms)

calculate how much your caring would have cost and present a bill for that.

In all honesty, if dps grandfather gave us over 325k I would be quite happy not having inheritance on top of that

it is no surprise that the ones that saw him the least are kicking up the most fuss

Always the way Teacup.

A combination of only being interested in money, and feeling that the ones who bothered with the relative have had an unfair advantage to pick their pockets.

It does sound very complicated. Good luck with the solicitor. Hopefully they will have some good news for you. Whatever happens, there is no need for them to be nasty about it. But, I don’t think it matters what people’s opinions are. It’s the law that’s important.

Glad to hear you have a solicitor dealing with this. As they will apply the law impartially, you can happily ignore the family suggesting something else.

On the figures you've given, I can't see that you owe anything, and you should in addition get your portion of the inheritance.

I'd get a solicitor on the case to send a letter out to the executor.

I admit I don't know a thing about UK inheritance law, but it seems to me that if there is tax owing on the £50k the OP received that the other inheritors shouldn't be penalized for that. They'd in essence be 'paying' a share of the tax for the money OP received.

@elevensmiles OP hasn’t taken anything from anybody. She was given the money and she was given a portion of the inheritance. So go be pissed at the Grandfather and not the cousin who received it. That’s on him.

So the amount being split, after payment of IHT, is £510,000 ish (I have taken £40-£45k for each of 12 grandchildren as £42,500 each)

If you hadn't been given this gift, it would have been £560,000 and each person's share would have been £46,667 - a difference of £4,167.

IHT is 40% of everything over £325k so pre-IHT it would have been £716,667 ish. Overall, approx 22% of the whole estate has gone to IHT.

The other beneficiaries have no right to expect DH to refund the gift you&he were given, and it is quite right to refuse this, but I do think it would be reasonable for your DH to fund the share of the IHT bill which is due to your gift have been made within 7 years of the death. That would be £10,930.

So my advice would be for your DH to volunteer to receive only £31,570 as his share of the estate, allowing the other 11 to receive £43,493 each. That is an appropriate gesture IMO. Otherwise you effectively have his 11 cousins each chipping in £910 to cover the IHT on the gift that you & DH received, which doesn't seem quite fair.