Inheritance

[Changedforcontroversialpost]

I know this will be controversial already. I also accept that there will be strong views.
I am struggling to understand my Dad’s mindset to be honest. So, my Dad has always said that you can’t take money with you, his parents said the same thing and were generous whenever they came into any money - gifting us a few hundred pounds as children when they sold their house for example (30+ years ago) He berated my Mother’s (divorced) choices about hoarding money and when she passed there was a significant amount of money that inheritance tax needed to be paid on. He has always said things like ‘why didn’t she just take you on holiday?’ ‘Why didn’t she gift you some money towards a car?’ Because essentially she then paid tax on her earnings, tax on her savings and then inheritance tax on those savings even though she worked all her life in manual, not-well paid jobs. However, he has just sold his house, he lives in a place where he is extremely unlikely to be removed from and he is 73. When I asked him if he had plans to holiday or travel the world he basically said that he plans to just save the money. Of course this is completely and utterly his right but I simply can’t get my head around it. He would be gutted to have to pay any inheritance tax and he would never want the money to go to anyone other than his children. It doesn’t make sense to me that he would hang onto it instead of sensibly gifting it (within the parameters of the law) and enjoying seeing it be put to use. He has implied all his life that he thinks it’s strange to sit on money when reaching old age but now he is doing just that.

AIBU to think it’s odd? That he had such strong views about it when my Mum did the same thing but now is following the same path? I’m not desperate for money that is a promise and I will never begrudge this, just curious if anyone has encountered someone similar.

But you have earnings, ie a way to replenish your funds.

My parents are a similar age, (one of them a bit older) and I worry about them having enough to sustain them in reasonable comfort till the end of their lives. And of course at that age you don't know how long that will be. I'm not thinking that they should be giving it to me. That's entirely different from giving your children money when you have it in your 50s.

You haven't even said he had any illness?
Given the information you've shared is entirely possible he could have many many years

Similar happened with my dad. He had all sorts of plans to spend money when he retired, half the year in Spain, golfing etc

He literally retired and stopped doing anything, he goes to asda in the winter for a free cup of soup in the cafe (OAP special).

He obviously worries about his money decreasing. He's 73 now also, he's smoked 40 tabs a day since he was 14 so I really don't think he will make it past 80, it's sad but what can you do!

Why are you so certain?

I agree with those saying he may want to ensure he has enough to last him for the rest of his life.
I am fortunate enough to have some money put away from inheritance when my husband died; and later when I downsized my home. I have given a substantial amount to both my adult children to enable them to buy their own homes. The funds I have left are not currently needed for day to day expenses but I am not in good health and would like some choice in the support I can pay for when I need it in future.

It's about security.

The money he has has to last him for the rest of his life. That's a thought worth contemplating. Elderly people can't just go out and start earning again. And elderly people are still overall, part of the poorest sector of society.

How can you possibly know,that? If he's not ill, you can't predict how long he'll live.

I agree with others. 73 is no age these days. Three of my grandparents lived to their mid 90s. My 96 year old aunt is still going strong, and still living in her own home.

Having said that, in your father’s shoes I would be giving money away if I was confident that I had enough for my needs. As it is, I am younger than your father (though my husband is slightly older) and we have already given our children substantial sums of money to enable them to buy their first flats.

This is it in a nutshell! It is quite sad for him! People just seem to assume I want his money but it’s also sad to watch them penny pinch when they don’t need to. I don’t know why people are so obsessed with his health conditions. Like you, I know how unlikely living another 20 years is!

It’s a nice feeling to help them with a new car or a deposit for a house or a holiday and I can’t understand why he doesn’t want to do that or at least enjoy the money himself to be honest.

Oh come on, I shouldn’t have to share his inside leg measurement for you to believe he isn’t terminally ill and that he doesn’t have 20 years to live ffs.

I hear ya, my dad needs to be studied if he lived another 20 years!

Yes mine too.

We have talked about the way she lives, encouraging her to spend, to treat her self to trips or nicer clothes.

We have guided her to buy things/services that will make life easier, saying surely this is what you have worked hard for.

She says she is frightened to go back to her younger days when she had very little.

My DC’s are young adults. I could gift them money and do as appropriate (birthday/Christmas) but in the bigger sense I believe they should earn what they need.
Work hard, save, appreciate their own hard work. I don't want them to sit back and live off other peoples hard work.

He enjoyed slagging your mum off.

Now he "lives somewhere he won't be easily removed from". Did he by chance spaff his money looking generous and end up in council accommodation whereas you mum worked and saved?

So really he is just insecure that your mum provided for herself and her family in a different and less showy way?

Anyway, it won't be him who is paying the IHT, it will be those inheriting the estate. Won't be his problem by then.

Mil pays 10k per month for care. She is going to need every penny she has saved. And if your dad is in less than robust health, he must be able to foresee that he might need care. In which case giving it away, would be seen as deliberate deprivation of assets.
If he was going to give it away, he should have long since done so.

"Because essentially she then paid tax on her earnings, tax on her savings and then inheritance tax on those savings even though she worked all her life in manual, not-well paid jobs"

Did she inherit a lot herself OP? If not she must have lived extremely frugally to accumulate the sort of wealth that attracts a substantial IHT liability.

After FIL died we went to a meeting with MIL to see their financial adviser. He was asking about how she wanted investments managed and what she wanted long term. She stated, quite categorically that she didn't care as long as she didn't have to pay any tax. In that case, he said spend it or give it away.

She did neither and her estate ended up paying a huge tax bill.

C'est la vie!

No, but we are all saying you never know how long someone is going to live, or what their needs in the last couple of years if their life might be. Live in carers or care homes are all £1k per week, minimum, nursing homes much more. It is entirely possible if he has funds, he will burn through tens of thousands in his last couple of years.

@TonTonMacoute Same. You can only lead a horse etc. DM had a house she said she would rent out, never did, although it was otherwise occupied, long story. So no income. When she came to sell, she lost 60K in capital gains. The house she had bought as an investment, actually ended up.costing her money.

He shouldn't have bad-mouthed your mother for wanting the security of her savings. That's the problem here, imo, rather than him being a hypocrite.

In a better world, the government wouldn't take, take, and take again, and people would be able to pass all their money along according to their wishes without worrying about being robbed by the taxman one final time after death.

My mum went nearly 7 years with a terminal lung cancer diagnosis and not expected to make 6 months. Im glad she did though. You cannot predict his longevity.

Are you sure his assets will attract IHT ?

this couldn’t be further from the truth to be honest. But it will be too outing to explain his specific circumstances. He is very wealthy from scrimping and saving and where he lives isn’t council owned.

You can use the word gift as a verb Polly.

Maybe, who knows your thoughts when you are 73.

It’s like when people in their 40’s and 50’s who say I’ll go into a care home when I’m older, I don’t want to be a burden to my DC etc. Having worked with hundreds if not it a thousand elderly people not one has ever said they want to go into a home and give up their house. Some of them must have said they would when they were 20/30 years younger.

Something must happen to our mindset as we got older.