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.

@JinglingHellsBells £40K in savings if that was all she had is peanuts - plus the state pension (maybe a private pension, maybe some of her DH's pension rights transferre) so are you seriously saying that anyone owning a house outright but without £40k in cash needs £80k in cash gifted to them immediately?

Gosh, you poor people. It all sounds harrowing. I’m not surprised you were so angry.

I think you did the (morally) right thing giving your MIL your inheritance. Yes, it was done too soon - should’ve waited until after probate was complete. But these things happen.

In an ideal world your DH and SIL would be able to discuss it with her now (if they both need the money now). She probably isn’t thinking clearly or practicality yet, nor joined the dots up in her head- if she has enough to live on, money maybe isn’t at the front of her mind just now. Get DH to explain that he and SIL only returned the inheritance because they thought she only had £40k.

Whatever happens, in the next several months she will also need proper financial advice (not from her family) as to where to put the £200k savings, and to write a Will herself. Probably all a bit too soon now, but she’ll need support with that as she’s not financially literate.

Dishingoutdone I didn't say immediately did I?

I think it's very clear what I said.

£40K for another 20 years of life as savings is not a lot.

We don't know how much pension she has. Irrelevant now so not sure why you pick me up on it.

Dishing maybe ask the OP that as it was HER decision not mine, LOL!

Get DH to explain that he and SIL only returned the inheritance because they thought she only had £40k

This ideally should have been raised when the additional 200k was discovered.

But I think DH has said enough tbh - he talked his sister into giving up her share too and his sister shortly thereafter lost her home. He was executor - I think there’s something incredibly inappropriate in that.

DH should just stop giving out financial advice and leave things be.

It’s interesting that they want to push for the money now when things have gone badly for them.... but when his own sister lost her home there wasn’t a discussion about it at that point.

Maybe with that 40k she wouldn’t be back living with her mother.

Does MIL only have the money left to her it the will? No pension either? I guess if she's young and might live another 20 years and has £320K then perhaps she will get through that quickly. If that's to supplement good pension income then she's either being really horribly tight or maybe is experiencing some memory issues and doesn't remember your OH giving the money back. Can he not just talk to her and ask for money?

To all the people talking about 'honouring the FIL's wishes' - it's highly unlikely that any of the assets - house, savings etc would be non-matrimonial assets - in other words they were jointly owned by the couple and FIL didn't have the right to bequeath some of them to the children whilst MIL was still alive. I'm baffled the solicitor didn't point this out. When you say that your DH encouraged MIl to 'quickly' gather bank statements etc., and the solicitor subsequently found another £200k, has probate actually been granted yet? I'm sorry OP but I think all you've done is 'give back' what was legally your MIL's money all along.

Fil should never had left money belonging to him and his wife to anyone, even his children.

Why not? My dad left me and my brother £50k each, my mum still has the £600k stupidly large house and £400k savings plus £3k pm income, so why should my dad not leave some money to us?

It could be another twenty years until the next inheritance. Though my mum is keen to give away as much as she can and is giving her grandchildren all a monthly income.

My Mum is the same age as OP mil. She has a state pension and a small private one. No mortgage to pay. Manages her household bills. The nest egg my Dad left her is virtually untouched. She never dealt with finances in her life but knows the cost of things and it doesn't take a genius to budget accordingly. I really don't get why some posters think £40k plus pensions is not enough. They could have invested a percentage to help their Mum in the future ,IF she needed it. Why did both DH AND sil have to forgo their inheritance? What is astonishing is that both were in a fragile financial state. This whole situation raises more questions.

I think the mil already knows the Op is upset with her and must know both children are suffering financial hardships, they shouldn't have to spell it out to her! Her silence (mil) is very telling.

@Lemonyfuckit

To all the people talking about 'honouring the FIL's wishes' - it's highly unlikely that any of the assets - house, savings etc would be non-matrimonial assets - in other words they were jointly owned by the couple and FIL didn't have the right to bequeath some of them to the children whilst MIL was still alive. I'm baffled the solicitor didn't point this out. When you say that your DH encouraged MIl to 'quickly' gather bank statements etc., and the solicitor subsequently found another £200k, has probate actually been granted yet? I'm sorry OP but I think all you've done is 'give back' what was legally your MIL's money all along.

Quite possibly this was his own inheritance from his parents - that's how my family organised their assets Either way, it is a small % of the total value, so well within 'his' half of a 600k estate

I am really sorry that you have had this happen to you on top of the bereavement, your son's mental health and your own financial problems, Sadinside.

Am I the only person wondering about the solicitor's advice? I don't think it was responsible to allow the £80k from the children's legacies to be returned before probate was completed and without discussion of the consequences for you all. Doesn't the £80k now count as a 'gift' on which tax might need to be paid? The person who ironically seems to have needed the money most was the SIL. She may be bad with money but clearly that sum would have helped her, as she has had to move back to her childhood home with MIL. This might be influencing the MIL's decision about selling. At the very least, the children should have been urged to talk to an IFA before giving the money back.

I disagree with the comments about the FIL being wrong to give a legacy to his children. I thought legators had to make sure their dependents were provided for. While it is usual to leave everything to the surviving spouse, it is not illegal in England to make legacies to others.

I feel bad for writing this sadinside but your husband does not come out of this very well in terms of financial acumen. The least he can do is to tell your MIL about your financial difficulties. She can then decide if she wants to do anything.

Agree with posters saying that the MIL is not badly off. She may have a private pension as well as her state pension so she is not necessarily going to be living off the value of the estate.

It's understandable that you're feeling resentful when you're stressed about your own family's finances
As you've had a solicitor involved I'm assuming that the will is legally valid. There's too little information about what the will actually said to reach any conclusion about your DH's inheritance or lack of it. There are more questions than answers. You don't say if any of the saving are in joint accounts. If they were, they pass automatically to your MIL and aren't part of your late FIL's estate. Equally, is their house in joint names?If yes, it passes automatically to the survivor and spouse (special rules apply even if the property isn't in joint names), your MIL & on an estate of @£620k she isn't liable to pay inheritance tax anyway even if it was all in your FIL's name. Your DH & SL would have to pay tax (at 40%) on their inheritances, unless there's provision for it to be paid by the estate or your FIL took out an insurance policy to meet it. If the estate paid the tax this would reduce your MIL inheritance by £32k, and if the beneficiaries paid each share would be £40k-£16k, ie £24k net of tax.
You don't say if any formal deed of variation has been entered into to alter the inheritance of your MIL, DH & SIL. If not the bequests are 'illegal' and can be challenged by any of the beneficiaries, all of whom are entitled to (and should) seek dependent legal advice to protect their interests, even if they come to the same decision. Whether it's morally right to insist on payment is something else, and tbh I'm with your DH on this. However, he could be seen to have exerted undue influence on your SIL to give up her share. Was he the only executor? if he wasn't, the other executor(s)should have filled in a renunciation form at the probate registry to allow him to act alone.
At this point you should be (a) asking your DH to make sure everything been done legally and above aboard and (b) when the time is right (but soon) gently encouraging your MIL to go back to her solicitor to obtain lasting powers of attorney (for her future health & welfare, and finances) and a new will. She also needs advice on the inheritance tax position going forward.

I really feel sorry for the MIL, after losing her DH her relationship with her son is in jeopardy and all over something that isn't even her fault.

Maybe I'm luckier than I thought coming from a poorer background, there's no money for any of us to fall out over.

OP, how about taking a step back, thinking about your MIL being widowed and all she's been through and be glad that she's financially comfortable and will have enough money to cover any care that she might need so that your DH and DSIL won't need to pay for that or care for her themselves if they don't want to.
You have the rest of your working life to sort yourself out and your DH will eventually inherit the money once your DMIL dies.

If you need financial help and you want her money then you should have your DH talk to his mum openly now.

Mil has a final salary pension plus state pension, she also receives a proportion of deceased FIL pension. She was worried after FIL died and we went through the pensions and worked out she’d get about two thirds of what she’d originally got.

Doesn't the £80k now count as a 'gift' on which tax might need to be paid?

No, there is no tax on gifts.

I thought legators had to make sure their dependents were provided for.

No, not in England (Scotland has a different law on this). And anyway, adult offspring are rarely dependants, unless they have some disability that makes them so.

I’d’ve thought that MIL would’ve inherited everything upon FIL’s death, & your H & SIL only inherit when MIL dies

Why would you think that? My parents had mirror wills that included a bequest to my son. Lots of people do that.

She was worried after FIL died and we went through the pensions and worked out she’d get about two thirds of what she’d originally got.

Two thirds of what they originally got. So there were two people gettng 100%, now there is one person getting 66%. Don't forget she now gets council tax reduction, her other bills will be lower, etc.

My mum is the same. Her personal state pension has gone up, she now also gets dad's SERPS added, and she gets two thirds of his final salary pension. So, as she is just one person, she is really far better off.

There is a lot of old rubbish on this thread re “matrimonial assets”. No such thing in respect of inheritance. FIL can leave his property to anyone he chooses whether married or not.

Mil has a final salary pension plus state pension, she also receives a proportion of deceased FIL pension. She was worried after FIL died and we went through the pensions and worked out she’d get about two thirds of what she’d originally got.

It's quite unusual that your MIL was supposedly so clueless about money for a woman of her generation- they were the women's libbers of the 1960s!

Given your FIL was ill for some time, didn't she did some maths before he died and work out her income? Did your DH who is so good at giving advice not help her?

Obviously without giving figures, no one can tell how much she has per annum. It seems a bit odd that on the one hand she worked and has a final salary pension so presumably had a professional career yet, didn't take any interest in money when he was alive. A FSP could be anything from £10Kpa up to £100K pa!

My widowed mum lives on £12K pa. She has less in savings than your MIL but is a lot older. However, help like gardeners, needing new boilers, ongoing house repairs, employing decorators instead of DIY, means her savings could disappear quite quickly.

I have told her that whatever she needs, I will fund as am able to do that and will take it out of my share of the inheritance when it comes.

So, your MIL has pensions, lump sum assets, a big house with no mortgage etc? I don't see how she won't manage if she's sensible.

I don't think your FIL's will was necessarily wrong in wanting to give his DC a gift of money whilst leaving his wife comfortable enough but he should have updated it, especially when he knew he was ill and had a serious conversation with his wife about his intentions. I suspect she understands more than she's letting on, especially if there was mirror wills. I don't think you (or rather your DH & SIL) needed to hand back their share straight away. The family and solicitor acted too hastily and the overall finances for her are not so bad. Could she or would she reverse this decision?

Maybe given time she will not want to be in 'the big old house' and seek to be in a more manageable place, your SIL may move out, your MIL might remarry...many variables. You either ask for some financial help from her, explaining your situation re the house sale (which is not quite the same as asking for the £40K back) or let sleeping dogs lie.

If one message comes over in this it's women start taking responsibility for finances and make sure you know the law re. wills.

Someone can leave their entire assets to Battersea Dogs' Home if they want even if they have a spouse. Yes, you may be able to go through a legal process and contest the will but it's a long and expensive process.

You need to work and plan how you would survive in old age long before your DH/DP dies.

Did your FIL expect the £200k to go out his widow and that is why your dh and SiL got the £40k each?

Has your MIL not asked why you are moving ?

'Mil has a final salary pension plus state pension, she also receives a proportion of deceased FIL pension. '

Then ASK her for help. Explain what has happened. Sitting there quietly resenting someone for being better off on you is absolutely pointless.
Get your DH to ask her for that original £40k for him and his DSIS.

Then leave the poor woman alone. It's fine for you to feel like it's all a bit sh%t for you at the moment, because it sounds like it is but to be glaring at her for staying in her house and being well off is out of order.

@VanGoghsDog

Doesn't the £80k now count as a 'gift' on which tax might need to be paid?

No, there is no tax on gifts.

I thought legators had to make sure their dependents were provided for.

No, not in England (Scotland has a different law on this). And anyway, adult offspring are rarely dependants, unless they have some disability that makes them so.

Thanks for info Vangoghsdog. I didn't know about gifts so thanks. The comment about legators was in reference to posters saying FIL should not have left everything to MIL but I did not realise that technically he did not need to bequeath anything to her.

Going back to the OP's situation, as the MIL has an occupational pension, I think it would not be unreasonable to hope she reverts to the original arrangement.

@WhatTheWay

In hindsight not a great move, from an inheritance tax perspective this is really bad financial planning as the whole estate is now being to be values for tax on MIL death at 40% for anything over the allowed threshold

If the MIL died tomorrow then I think inheritance tax would amount to about £50k. However, as she is only in her early 70's I don't think that is anything that the OP needs to worry about.

Can't see how there would be iht to pay if mil died tomorrow. My rudimentary understanding is that the fil's iht threshold is currently £325k, there is no iht between spouses, therefore his threshold will 'roll over' with the mil's threshold creating a £650k threshold when she dies, plus if the estate leaves a home to direct descendants there is an additional £100k. So the estate would need to be worth more than £750k for it to attract iht. And with house values possibly plummeting, cost of living and potential care home fees, I really wouldn't be worried about this aspect of things. If OP's husband and sil had taken their £80k, it would reduce the above threshold by this amount, but there would be £80k less left to leave.