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.

It's normal tax planning to shift finances down a generation. If the will was written 20 years ago, that £40k would have seemed like a much greater amount to gift so presumably the dad was fine with that ..as he knew there was a lot more for his wife.
I bet op doesn't even know the pension of the mil. My dad's was 50k and reduced to 30k for my mum on his death. Both pleaded poverty in old age the whole time and lived off the reduced section aisle for food. They were on more than me! I'd been giving them money!!

I don’t want to sound awful but she’s 72 and has over 300k capital and a house worth 300k. No way is she going to burn through that in what time she has left. Sorry I know that sounds awful! She’s got 1 child living with her and 1 child losing his home through financial hardship. I think she sounds a bit selfish not helping both her kids out tbh. I know if I was in her position I wouldn’t want to see my kids suffer.

ConstantlySeekingHappiness

As a solicitor, would you have advised the legatees to sign away their inheritance before probate was completed?

Let it go. Personally I feel that the money should all belong to your MIL anyway and FIL shouldn’t have been trying to give away ‘his’ money when it actually belonged to both of them.
If she’s in good health she may need that money - your DH could be lucky enough to have his DM for another 20 years. And your DH will eventually inherit half of it all anyway won’t be?
If she decides to give you all some money early that’s up to her, but it’s not up to parents to fund their grown children.
People may disagree but As someone who has always earned their own money from the age of 18 and never had a hand out or financial help from any family member I’m always surprised at these kind of posts where adults are whining that they’re not being given money for nothing, or expect to inherit money as their due somehow.

Not at all the point of the thread, but can’t grasp the mentality that says having a 300k house (presumably totally paid off) and 320k in savings excluding any pensions isn’t wealthy.

For most in this country it’s totally unachievable.

And also - being angry AT her for being financially secure when she actually knows nothing of your woes is ridiculous. Maybe if your DH had talked to her at the start she’D have offered to loan or gift you money.

I always imagined on the death of one parent, everything just passed to the surviving parent. Is it normal that people write something in to randomly release money to children at this point?

@SchadenfreudePersonified

ConstantlySeekingHappiness

As a solicitor, would you have advised the legatees to sign away their inheritance before probate was completed?

Of course not, as a solicitor their inheritance wouldn’t even have been considered prior to settling other aspects of the estate - OPs DH has been a very poor executor as it sounds like all of this was done prior to involving a solicitor.

Although the circumstances of this haven’t been made clear. How exactly they went about doing this and what paperwork was signed. OP needs to clear that up.

It wasn’t just FILs money - it was both their money.

Assuming the money in question was in accounts in FIL's name only, in what legal sense was any of it MIL's money? Or did you just mean morally?

I believe a spouse has a right to be provided for, so I suppose they can challenge a will if they think too much has been given away. But aside from that, my understanding is that FIL can do whatever he likes with money that is in his name only, during his life and after his death.

(Please ignore the scenario where MIL handed over money to FIL to look after, that would be unusual, and there's no reason to think that that happened here. )

I am not a solicitor, but I believe that is quoted above would be wrong, if it were a legal opinion, so I want to check my understanding.

Just to throw another spanner in the works is the mum now liable for tax on the £80K or the part of it that is above the annual gift allowance?

bungaloid yes, to a large extent we have freedom in the UK to leave our assests to anyone we wish.

Make a will. Please. Everyone shoudk make a will. Don't leave it to chance..

Alot of people are also surprised that not everything goes automatically to a spouse if they die without a will. Intestacy law dictates how an estate is divided at this point (depending how much is in the 'pot').

Every single person should have a will.

*caveta abnove... freedom to a large extent. People can make challenges to a will if they are not left anything/not left enough but that is a whole other area of law.

*caveat. I can't spell

OP, does your Mil have a pension or other regular income? A similar thing happened to my parents . When my DM died last year she had bequeathed money to her DGC, there was no way my DF would have taken their intended inheritance. He is now in a care home with assets of around £310,000. His pension and other income pays about one half of his fees a year. He has sufficient for about another 8 years, we will deal with any shortfall nearer the time. I don't know how frugally/richly your Mil lives, but in my mind she has more than enough to see her through even if God forbid she ends up in a care home.

I'm sorry but this is entirely your own fault. People's wills are legal records of their wishes. You should have kept the money because that is what the person who died wanted. Whats the point of a will if you're just going to ignore it? its disrespectful to the person who died. It doesnt matter that the will was old- if it mattered so much to the deceased they would have changed it. Now youre in a right old mess and you kind of have noone else to blame. I'm afraid you have ended up in a situation of your own making and you'll have to just suck it up. You can ask her to share but if she wont then thats entirely up to her isnt it?

Covid only really hit in March. We’re not even in July yet, but you have already got to the point of being unable to pay your mortgage and have found a buyer for your house and somewhere new for your family to live. That is pretty fast going but, more importantly, it suggests that you had absolutely zero buffer for sudden financial difficulty. If your situation was that precarious then it was not wise to give away the 40k immediately. I’m not saying that it was wrong to think of MIL, it was a very nice thing to do, but the fact is that her having to sell her home for care was likely a lot further away than you having to sell yours when you ran out of money.

Your own lack of financial planning is really the big issue here. MIL likely would be amazed to know that you had so little cash if your own, given that you had just happily handed back 40k to her. So you can hardly blame her for not offering to hand it back when you haven’t told her.

OP I don’t understand why you’re silently seething about it but haven’t actually spoken to your MIL. Can’t you just explain your situation and say the £40k would really help right now. Give her a chance.

@fourquenelles

Just to throw another spanner in the works is the mum now liable for tax on the £80K or the part of it that is above the annual gift allowance?

There's no annual gift allowance where you have to pay tax on amounts above it. You can give away as much as you want whenever you want. You are probably thinking of the tax due after death? So if the op's dp died, any gifts made within 7 years of his (unlikely) death would count for iht as part of his estate.

I always imagined on the death of one parent, everything just passed to the surviving parent. Is it normal that people write something in to randomly release money to children at this point?

The intestacy laws, which say where money goes if there is no will, send some money to children, if the estate is above a certain size. So I don't think it's strange for a will to do it, even in the straightforward case that all children of the deceased are also the children of the surviving spouse.

I think under intestacy the spouse gets the first 250K, and half the remainder, the other half being shared by children. So if there had been no will in this case, and half a 300K house was alread MIL's, the estate might have been 120K + 200K + 150K = 470K, MIL would have got 250K + 50%*(470K-250K) = 360K, two children would each have got (470K - 360K) / 2 = 55K. So the will leaving them 40K actually reduced their inheritance, compared to FIL making no will at all.

Also, why did you not take a mortgage holiday instead of selling up your self made home straight away? Sure it’s not free money but 6 months is being offered by most lenders, surely that would have helped massively

Just seems to me you’ve jumped the gun on quite a few issues, no wonder you’re feeling put out. You’re taking it out on the wrong person though.

Ironically of course if the mum now gives them 40k each, in the event of her (more likely) death within 7 years then it would count as part of her estate. Currently, no iht to pay but that could change in the coming great recession.
Which is why it was stupid to give it to her formally.

@GreenMintTeaMug

bungaloid yes, to a large extent we have freedom in the UK to leave our assests to anyone we wish.

Make a will. Please. Everyone shoudk make a will. Don't leave it to chance..

Alot of people are also surprised that not everything goes automatically to a spouse if they die without a will. Intestacy law dictates how an estate is divided at this point (depending how much is in the 'pot').

Every single person should have a will.

Yeah we made one a few years ago after an unexpected death in the family gave us a kick up the arse. But I never contemplated writing special bits in on the event of one death. It is written such that everything passes to the surviving partner. Perhaps I trust my partner too much! I've just tried Googling it, but even if we have made wills, technically our children could challenge the fact that it passes to the surviving partner? That seems ridiculous to me.

Fucking hell she was pleading poverty? When my dad died my mum had a small house worth 100k and her pension. That was it. No savings. She's never pleaded poverty or gone without.

She sounds extremely mean to be honest. I'd never do that to my son, it would have been handed back straight away.

You were mad not to take it , her care needs would have been covered by the house proceeds when the time came and she sounds like she has a decent pension. Now if she needs long term care home all the money will be gone

I’d never considered the fact that the solicitor was negligent by accepting the refusal of inheritance so early on - and indeed it was very early on, maybe a couple of weeks after the will was read. About 3/4 weeks after that the solicitor got search results back having written to the main banks and the additional 200k was revealed. I can see now with benefit of hindsight it was daft not to have waited until search results were returned but no advice to do so was given and the situation for MIL savings-wise on the face of it looked bleak.
What’s done is done. She’s had a horrific year and loss. The nature of the death really hurt our older teenager who has sat on nhs mental health wait list since last November; so on top of house woes we are looking at funding private psychological support for him ☹️. Thanks for views everyone