It’s an inheritance one!

[Sadinside]

Sadly FIL died last year after a truly harrowing illness. He left DH and SIL each 40K. MIL has never really been involved with money, having always kept that as FIL’s domaine - bit old fashioned. The will was old - 20 years old. DH suggested MIL quickly got bank statements together to tot up value of savings and assets - as he was executor. The initial tot up came back as 120K. This would mean once DH and SIL were paid out - she’d have the house (worth about 300K plus 40K savings) - she’s 72 and in good health. DH asked me what I thought, and my immediate feeling was that both siblings should really hand back the will to MIL in order to give her savings and home options (she was talking about moving into a modern house). Papers were signed handing back the money to MIL. Everyone happy. Fast forward about a month, the solicitor is undertaking bank searches and unearths 200K that MIL had no idea about. Suddenly she’s a wealthy widow. No parent / child discussion about giving back the inheritance to anyone. Covid hits, DH has pay slashed, we can’t afford our mortgage and are selling up to move to a much smaller house. The inheritance would have kept our house. MIL In the meantime declares she’s staying put in the old big house. I’ve spoken to no one about this because I feel a bit ashamed of feeling pissed off at an elderly grieving lady. Ive not told DH that I feel his mum has acted a bit sneakily ...but that actually is how I feel. AIBU to feel kind of diddled? The money’s not mine, I’ve never banked on anything but I know in same position I wouldn’t do that do my own kids! Do I need to mentally let this go? We move in August and I just find myself avoiding MIL on phone, I can’t feel the same way about her having previously got on pretty well for years.

@nettie434 If a family is rich enough to give away £325K or more they will find ways of avoiding the tax man. There are loopholes and inheritance planning starts early- trust funds and all sorts of things. We aren't rich but would be well over the IHT threshold owing to property prices here so it's something we are already looking at with our financial advisor.

BTW I don't think that @Sadinside is coming back.
Too many awkward questions about how their fiances went tits up in 3 months and why her DH is not managing his role as an executor of the will better- not settled after 18 months??

Well, everyone is confusing the rules around care home fees and the IHT rules. It's really too complex to go into but the two are not linked in any way at all.

I thought you could freely give £3000 a year, no problem, but if you die within seven years of giving a larger amount (over 300k I think) then inheritance tax is owed.

£325k, doubled if a spouse has died earlier as their band transfers. Plus main residence is ignored up to a certain value IF it is left to offspring.

The potentially exempt gifts are, yes, £3k (but note - these are still only ever potentially exempt, if the estate was borderline you'd need to document the circumstances very carefully), gifts higher than that, if the donor dies within 7 years are added back into the estate so the estate pays IHT on the amount after it is added back in (not the recipient). Also, it's not a straight 7 years, there is a sliding scale, I can't recall the exact details but it reduces within the seven years too.

Also there are potentially exempt gifts for specific things, like a wedding. AND regular gifts from income that do not reduce the donor's standard of living are exempt from IHT and do not get added back into the estate on death, no matter when death occurs. Hence my mother giving each grandchild £200pm.

It's really complex and most people only ever pick up the headlines and don't look more deeply into the rest.

Please @JinglingHellsBells try to cut some slack and not see the absolute worst in a shitty situation or people. Every day is quite bloody hard here for reasons I’m not going to expand on but I suspect you’ve clocked. And there’s going to be harder to come....llThank you everyone for you kind thoughts and advice. 🙂

Too many awkward questions about how their fiances went tits up in 3 months and why her DH is not managing his role as an executor of the will better Well, you know DH has had bereavement counselling for a year and a DD with a extreme mental health crisis. His pay got slashed through Covid and we had a big mortgage. But you are right what a shit job he’s done sorting the paperwork. I’ll get on his case today 🙄

Sadinside I can only speak for myself but I think most people would totally empathise with anyone in your situation trying to deal with a very complicated financial situation as a result of bereavement and coronavirus. I hope things get better going forward.

@Sadinside No I'm still reading. I think the reason some people queried where you were is that a lot posters (me included, I admit) asked questions to give a better picture and it seemed there was more to it than met the eye.

The main point was that 3 months of slashed pay should not mean you had to sell up so fast because to sell so fast in this market (with only online viewings in the main) you must have had financial difficulties before March when people were furloughed. Or your DH may be self employed. so, it seemed as if you were blaming your MIL for holding onto the £40K perhaps without being honest?

It's hardly credible that 3 months of Covid meant you had to sell up your beloved home when building societies are being very generous.
I'm sorry you find yourselves in this fix and having had a bereavement myself not long ago I fully understand the emotions.

However, I doubt you can change your financial dilemma on the past 3 months.

You gave the money back over a year ago- or refused to take it- so why complain now?

If his DM is in a position to help to save your home he ought to ask- either he is too proud, there is a backstory and he knows she would say no, or some other reason. Why didn't he ask for a loan with no interest from his mother so you could stay in your house?

You must have been sailing close to the wind for ages.

I've read your other post about your DD and offered advice.