Not to negotiate my inheritance

[Needafriend14]

I need a hand hold and some advice please.My DM passed away last July after a battle with cancer. Im still grieving there isn't a day goes by that I don't think about her. I miss her so much.she was my best friend, confident and gave me unconditional love.I was blessed. We were joined at the hip.I took her to luncheon clubs, art clubs ,GP hospital appointment, shopping etc

Rewind 5 years ago and she 'gifted' me and my family a deposit for a larger house so she could move in with us.I had an extension made like a flat to accommodate her.

She took ill last February and it was down hill after that.My 2 brothers (lets call them Bill and Ben) came into ours lives after only visiting once or twice a year..

They asked about a Will and had she had made one.She had I was given 40% both Biil and Benn 30% ( I know very distasteful at this time in her life) they knew about the gift and said it was Ok. However they had the Will revised (unbeknown to mum, she agreed in the end that Ben instead of Bill and myself was executors. I was still one of the executors.

Fast forward 5 months when she had passed away and Ben couldn't wait to send it to probate.He didn't organise anything else.

Anyway legalities went through and I don't think it was what they had been planning (I think the solicitor knew what they were up to). To their dismay the 'gift' was included in the final distributions.Ben rang me and said I hadn't disclosed it. I said I had and he asked the probate manger proof or this.When received proof he suggested that I get back to her and say that I borrowed it ( the gift)He then asked probate to revalue the Will because it wasn't fair and claimed that he me and DM had had a conversation about early inheritance !!

All over Christmas he was messaging me saying he has now hired a booking ledger to look at 7 year statements (I presume he thinks I have been dipping in her account) I haven't.

It has been horendous no compassion I have been in bits.

All through this he is saying (in a very polite professional way he is just doing what an executor does) and wants to distribute the money evenly. Because I had the gift and it should be equal.

This point I am not communicating with him. Bill gets on and suggests a mediator with legal qualifications. I state I don't need one there is nothing to discuss the probate manger has confirmed twice that everything is in place and that signatures are needed.

Any way Ben won't sign the final documents and has threaten me( in a nice way) with the 7 year statements.His last message was 'no stone will go unturned' We need a mediation!'

Sorry it's so long thanks for reading I just needed to get this off my chest to see what you all think AIBU? It is effecting my wellbeing and I can't put mum to rest.

To clarify - it's considered part of the estate for tax purposes only. It does not change how the remainder of the estate is distributed. So your gift is not part of the 40% specified in the will, it is separate to that.

I would add to your email that as the solicitor feels that the probate is ready to be signed any further "stone unturning" he needs to do will be at his expense and not at cost to the estate. That might shut him up if he's just being grubby as there will be a point where it costs him more than he will gain.

I'd also check with the probate manager that the estate doesn't have to cover his messing about, and also where the IHT comes in. I would assume it would be before divisions... so the tax would come off the estate not just your 'share'.

I haven’t got much to add except stay strong and don’t doubt yourself. It’s absolutely crushing when this happens, I had similar when my mother died. I expected us all to come together and be kind but my brother turned in to a money-grabbing paranoid monster, his behaviour and appalling accusatory emails made grieving for my mother extremely tricky. I feel for you but you are in the right and need to remember that, don’t let the bastards grind you down.

(The will) was changed 4 weeks before she passed away

How did this new will difffer from the one before, and since it sounds as if your mum was sadly very poorly, did she have the necessary capacity to sign the new one?

That sounds awful!
Sorry you have to deal with this on top of everything else.
He sounds like a money grabber who you should have nothing more to do with. Surely this is down to the original solicitor - what does he/she think about it?

Well done for standing your ground and standing up to the bullies. I'm sorry for your loss.

Tell him inheritance is after you’re dead, your mum could gift her money as she liked while she was alive!

If anything you could tell him you were financially dependent on your mum as she lived with you so presumably paid towards bills and food etc, so you need more money from the estate!

Your quote about the £325,000 is not right. What is says is

Any Inheritance Tax due on gifts is usually paid by the estate, unless you give away more than £325,000 in gifts in the 7 years before your death. Once you’ve given away more than £325,000, anyone who gets a gift from you in those 7 years will have to pay Inheritance Tax on their gift.

It does not say that If the gift was under £325,000 then it will be tax free anyway as you quote bur rather the tax is paid by the estate and not the receiver of the gift.

You can actually give away as much from your income as you want tax free but not from any capital. You need to keep careful documentation to proof this though.

Your mum could potentially leave up to £1 million free of IHT

If she was married to tour DF at his death (assuming he has passed first) and was left everything, then his residence nil rate band of £175K and basic nil rate band of £325K can be added to hers.

This assumes a lot of things, ie property being involved and gifts only to direct decendants. all the info is on the HMRC pages.

Now your gift, if it was significant (sounds like it was) and not over 7 years ago would be included in her estate for IHT purposes, your brother as executor is right to enquire after it if he is filling in an IHT400 form which is the final tax return sent in after death.

If your mums estate is what is called an excepted estate, that is one that falls within the nil rate band of £325K and has no tax to pay, then IHT400 is not required to be filled in.

If your brother is filling in IHT400 he does, I'm afraid have to give details of gifts - he will need the details, its part of the job of executor.

No, don't do any of this. The executors should be abiding by the strict terms of the will. If the brother won't sign documents, you'll need to apply to the court for him to be removed as executor.

Everyone gets 2 nil rate bands, the £325K tax free which applies to everything they own or gift and the residence nil rate band of £175K which applies only to property passed to direct decendents and is applied first.

To claim the second you have to complete a full accounting via form IHT 400, which is quite the epic form and micro analyses the deceased accounts

I wager the brother is doing IHT 400, which needs to be correct, and asks for info on gifts.

If the mother lived in the space and it was paid for with her money, then HMRC will view her as having a beneficial interest and it will be included in her estate and must be reported in form IHT 400

Just a word of caution to the OP, did she charge her mother rent AND declare it via self assessment.

If not the HMRC can view the mother had a beneficial interest in the daughters home, and in the absence of other figures consider a percentage 1/2 or 1/3 to be taxable to her estate for IHT.

The mums gifting of money, and living in the daughters home make it partly her home in the eyes of the tax man, called having a beneficial interest, and it counts as the deceaseds for IHT purposes.

Put simply, the gift has to be entered on IHT 400 and declared, and will be included in the tax calculation, that doesn't mean there is tax to pay, assuming transferable nil rates etc are in play.

It is so sad @Needafriend14 that you will never be able to look at your db the same way again.
I hope he chokes on his money.

Sorry this is happening to you OP. Very similar happened to my mum when her mum passed. Her brother started to question all sorts and ask for lots of information which strayed very very close to some hideous accusations (despite him doing virtually nothing for his mum for years). It was very unpleasant and distressing. My suggestion would be to disengage from him entirely. Perhaps state how distressing you are finding this, that you are satisfied that the will is legal, properly executed and was what your mum wished and that any further correspondence on the matter is to go through the executor or your solicitor. Greedy scum people who do this - money does awful things. Your lovely mum would be utterly horrified by their behaviour and would fully support you.

Just want to thank everyone who has supported me. I'm still grieving my DM But I am also (believe it or not) grieving my 2 brothers they have never been supportive but I have accepted this they had their own lives to live.However never in a million years did I think that they would value 40K each extra over me its heartbreaking.

He does need to include the gift in the Estate calculations because there may be inheritance tax to pay if she died within 7 years. That doesn't affect the value of the inheritance any of you gets now though, beyond any additional tax that may need to be deducted first.

Your post is a bit rambling, are you sure you've understood what he's trying to achieve? It is his duty as executor to identify any gifts that were distributed in her last 7 years.

I have often heard of parents leaving more to their daughters than their sons because they are more likely to bear primary responsibility for the children in the case of a breakup and statistically less likely to earn as much

Exactly this, the gift has to be declared, but is outside the scope of the will (if not referenced in it of course!)

So the percentages you receive can't change, but the gift may increase or create a tax charge, or indeed not.

The will has to be honoured unless it is legally changed, you can change, indeed completely re-write a will after death, its called a deed of variation, but you can only make such changes with the written consent of all the wills named beneficiaries.

Greyat agree post is a bit rambling I'm suffering from anxiety and grief. The gift was declared.I will be paying IHT.Nothing else has been given to me over the last seven years. I know what he is trying to achieve to make me feel guilty that I accepted a gift in the first place. The thing is they have always treated DM with what's yours is mine and what's mine is my own it's all horrible and disrespectful to my DM as stated above she would be mortified.

Your brother is awful. You took care of your mum and had her live with you whereas it seems like he hardly even visited. He should be grateful he got anything. If the probate officer and you are sure it was a gift and not a loan then 40% of the estate is yours on top of the loan. Obviously if the estate is liable for inheritance tax then part of that gift needs to be included in the estate as she died within 7 years and that tax needs paying before it is split between you and your brothers. He is obviously trying to wear you down.

If it's been declared that's that, end of - they cannot vary the will and have to abide by it.

It will be tough, but I would simply stand your ground.

Also make sure you don't pay more IHT than you need, make sure all reliefs are claimed, especially taper relief on the gift.

I'm so sorry about your loss.

I've mixed feelings about this type of situation. I'm the one caring for my Mum and I'm the one that lives furthest away too. My Mum and I get on brilliantly but she doesn't get on as well with my siblings. I think that the right thing to do is for my Mum to split her inheritance equally and it's what she has put in her will. The thought of being 'paid' to care for her would not sit well with me.

You've said that you are sad your brothers are valuing their relationship with you at £40 but surely you can see that they might be thinking that you've valued your relationship with them at that value.

What was the reason you got 40% of the will compared to your brothers 30%. Surely that was obviously going to make your brothers feel bad. Did your Mum explain why she was doing it. Wasn't she worried that your brothers would feel like they weren't as important as you to her. The fact they have money is irrelevant.

Your brother sounds like he is acting like a dick but I can see reasons why your brothers might feel aggrieved.

Point out to him your Mum made the gift to you in her lifetime. It was not a loan. If it had been a loan you and your Mum would have signed a loan agreement. He won't find one because there isn't one because it was a gift. The fact that your Mum left you more than her 2 sons proves she wanted you to have more. I don't understand how the will could be changed without her knowing though. How could she sign it? Who were the witnesses?

Worth reiterating that the gift's IHT will be subject to taper relief, it's not going to be the same level as any other aspects of the estate, so needs calculating on its own rather than just evenly sharing the bill!