Another inheritance/avoiding tax/MIL one…

[Bloodybrambles]

When I met now DH he pre-warned me that MIL was the ultimate honey fly trap. That she would offer me/us money, gifts, holidays etc and should always turn them down as they would always come with strings attached but they wouldn’t be clear until later.

The only thing I’ve gone to accept off MIL was that she wanted to buy the shoes for my wedding. As she begged, I accepted that the shoes I had my heart set on for years were around £60. Ah, she knew this, but actually thought I should wear heels not flat shoes.

Same with our wedding in general. We flat out refused a penny for our wedding as she had paid some a fraction compared to the other side… towards BILs and therefore thought she was in the position to dictate and organise the whole thing. It ended with BIL being given the ring back and being told ‘good luck to the next girl with dealing with your mother….’

We had organised a road trip across Europe for our honeymoon and MIL insisted on giving us a couple of grand for us to go on a proper honeymoon. She had kicked up such a fuss about not being involved/us not accepting money from them for the wedding we relented. Later on MIL told us to send us the link to the ‘package holiday’ and she would book it for us ‘to let us pick what resort we wanted to stay in’. Same thing again, absolutely disgusted that we were planning on road tripping in a camper van as honeymoons should be luxurious. It all then kicked off for us politely turning down her offer as we had already planned our honeymoon/didn’t want an all inclusive.

Fast forward to now.

PIL are insisting on buying us some large gifts. They’ve inherited from a family member who put in their wishes for us to benefit (we’re not named in the actual will apparently) but due to their tax/future inheritance tax it has to be actual gifts/cannot be a lump sum.

DH has flat out refused for weeks, asked for it to go to a charity, for our DC to benefit from our share, or for them just to enjoy it as it seems very much like it’s their money.

They’re arguing on a daily basis that said family member wanted DH to have this inheritance and DH is stubbing them to not accept. But again, cannot be a lump sum, has to be a physical gift(s) for their future inheritance tax reasons... Apparently it was listed that if PIL was not alive DH would have inherited the whole estate. Tells me that said family member didn’t think we were too terrible/irresponsible people.

I’ve never heard of anything like this.

Hypothetically if DH asked for his inheritance to be in the form of a classic car for the next four years, surely that’s just the same if PIL gave him the lump sum in the eyes of HMRC?

To me this seems like one of MIL honeypot schemes. There’s absolutely no way we could ask for a family car as it would always be used as ammo for a reminder who bought the car if I went to see my family on a Sunday afternoon instead of them.

PIL apparently don’t know how much ‘our share’ is right now, but they’ve estimated between 75-150k.

One hand it seems a shame to request it in the form of one million Cadbury crème eggs (not being totally serious) but how else could this really be above board?

Who is the executor? Has probate been granted yet? You can look up details of a Will / request a copy of it via a Government site. If you google you should find it. You may discover that your MIL is bullshitting you about the terms of the inheritance and you can then force her hand. Knowledge is power etc

Pretty sure that inheritance tax wise gift or cash makes no difference and only if they die in the next 7 years. Seems unnecessary complexity and that a lump sum would be totally fine

She’s talking utter shite. It will be taxed in the same way as a lump sum no matter what they buy you

So go armed. You can pay for a copy of the probate and will. I would do that, then you know what’s actually been said

They can do a deed of variation and just the money comes directly to you.

Bil's ex sounds sane. Your Pils are batshit.

Why have the named beneficiaries of the will not varied the will, so that the money goes directly to you instead of via your PIL? Then no inheritance tax implications on large gifts they're giving you

Assuming of course that what they're telling you has any truth to it

I assume they imagine that a sofa / holiday washing machine wouldn’t be picked up if looked at because it could have been for them. Whereas a transaction from their bank to yours is obvious.

Will their estate too £1m? The threshold for IHT is £1m for the estate of a married couple if their home is part of the estate,

Secondly they could sign a Deed of Variation diverting part of their share of the inheritance direct to you. Does this bypass IHT?

Thirdly, they can give gifts of any value without the gifts being including within the estate and subject to IHT if they live 7 years after the gift.

Hire a financial adviser.
(Then photograph MIL’s reaction and upload to MN. Please).

OP in your DH’s shoes I would get a copy of the actual will (I believe it can be obtained on line for a few quid) and then, depending upon what it says, seek the advice of a solicitor. Until then, grey rock MiL. As other PPs say, it makes bugger all difference what form the inheritance takes for the 7yr rule to apply, it’s the value of the gift at the time of gifting. If the will states that DH is meant to benefit, then it may not be subject to any of that anyway as it’s a direct bequest from the original family member? You need to see the will and work from there as I suspect this woman is bullshitting.

Sounds like they want to get rid of the money so it doesn’t form part of their own estate for IHT purposes. Not sure that can be done though as all assets and money would attract IHT if within 7 years unless it meets one of the exemptions (businesses, farms, heritage assets etc) They can gift up to £3k a year tax free and make other gifts out of income though

Can't you just pay the inheritance tax? It's you that will pay it, not her so just tell her you're very happy to follow the legal process and not screw over the tax system?

Seems very much how I had presumed (I always jump to the worst in PIL) so I just wanted to make sure my opinion of them wasn’t clouding my judgement. DH is pretty low contact with them (extremely long story, it was extremely traumatic for us all, I reckon they’re trying and failing to buy/worm themselves back in.

There’s very much a circle with MIL, she uses money to control/a vehicle to get exactly what she wants. If she doesn’t get exactly what she wants she can then cry how she’s just trying to be caring. She absolutely HATES we don’t take money/gifts from her. DH has has had to change his banking info to stop her randomly paying in to ‘pay’ for things. They’re the kind of people who arrange for tradesmen to go over to BIL house to do work/decorate and the first BIL will know when he’s told to stay in to let them in/out. MIL then acts like she’s superwoman and completely infantilises BIL. Oh, and that she 100% believes she owns BIL because of ‘everything she does’. They’re bonkers.

So yes, I think PP is correct, they’d want to buy washing machines, sofas, holidays, DC activities etc all under the premise that it’s what said family member wanted/what we’re owed. I’ve just looked up on Rightmove how much their house is worth and even with this whole inherited estate it’s way under 1million. Unless they’ve got a few hundred thousand tucked under their floorboards I doubt they’ll be getting near to IHT. We obviously wouldn’t mind paying IHT. If anything DH is whiter than white. He’ll use that as a valid argument to not accept off then going forward.

It’s not gone to probate but we will be ordering that will once it goes through. I did google and the letter of wishes isn’t a public document. That will be the slight stumbling block. PIL have been very fumblingly when discussing the will, they know we wouldn’t accept the money so apparently it’s wrote in the letter of wishes..

I’ll give DH the information. I doubt he’ll do anything with it as he’s too tired to fight his parents. But we’ll go back to not accepting any gifts as they’re obviously a Trojan horse.

It’s just a bizarre issue to have. Not many people would be complaining with their in-laws offering to buy 100k worth of gifts…