To say no thank you to someone paying off the mortgage?

[yourewrongthenyoureright]

FIL has always been a very controlling and tricky man. Not cruel. But controlling and manipulative. I’ve kept my distance where I can. DH helps him administrate his life/speaks to him everyday /visits him (4hrs away) monthly. Husband and I have stood on our own two feet and not asked for or accepted (when occ offered) from his (not insubstantial/not crazy wealthy) pockets.

My SIL/husband have been very happy to accept help / have asked for help (FIL contributes significantly towards: kids at private school/v nice holidays/new cars - we haven’t had those things. They earn v similarly to us, I think). We can’t have those things on our earnings and so we’ve not had them. We feel he then exerts control over them and they seem less able to maintain boundaries with him as a result. SiL does less for him than DH, ironically, but there is a v different relationship which I find really one sided (he isn’t nice to her because he has power, I think. The power to take away)

Anyway. He talking about significantly downsizing and is saying this would free up enough money* to pay off both mortgages (ours and SiL’s). It would obviously be life changing in as much as we have yearsandyears of mortgage left.

But can you ever accept a gift like this without being beholden?

*Obviously I appreciate IHT situation etc.

Looking at the responses here most seem to say take the cash. However, we had a similar situation in our family and I’m afraid it’s a cautionary tale.

A significant sum of money was gifted from DH’s parents to DH’s brother for school fees and mortgage. DH didn’t mind as he had done well and our family was comfortable enough. It was done with a legal process and with clearly thought out conditions.

However, relations between the givers and receivers soon soured. It wasn’t the money that started it, but the money rapidly became a major part of it. Nobody expected it as relations had previously been good.

Life throws up so many things we don’t expect. What if FIL suddenly needed money after he had given it to you, perhaps a health issue, and you couldn’t return it without remortgaging? If he changed his mind (and had a reason) would you be able to give it back? You may be reasonable but it sounds like he may be difficult.

You already have evidence he has a complicated relationship with SIL due to the money he has given their family. And you’re relieved you’re independent of that, as you say he’s demanding enough. Are you comfortable with the relationship potentially changing so he has more sway over you?

Maybe continuing to support yourselves and standing on your own feet is a price worth paying for your peace of mind and sanity. And he might always leave you an inheritance.

Not if there were no remaining assets.

Accept it for your family’s benefit. He’s 83 and won’t be around forever and it sounds like DH is able to end phone calls when he is being awful so even if he does the “I paid off your mortgage so I can say shit” approach, if DH can continue to say no to him that sounds good.

You are still seeing him so he is going to be obnoxious anyway. I would just take the money and still put in your boundaries. When once he has given the money don’t let him bring it up again.
My mother always used to try and control people with money and fortunately it wasn’t very much so we didn’t accept it.
My FIL on the other hand was completely different. He once gave my husband a significant amount and said he didn’t want it mentioned again. He was a lovely man.

Who is liable for IHT?
One of the historical issues around this problem is that a large amount of IHT has to be paid before a Grant of Probate or Letters of Administration (if there is no will), is issued by the Court. If there are no liquid funds in the estate, for example just property and no cash, HMRC will expect the Executors/Administrator’s to obtain a bridging loan to pay the initial amount so that the Grant can be issued and the property in the estate sold. If this is not possible in exceptional cases HMRC will issue what is called a Grant on Credit. This is very technical and something which one would need to take specific legal advice on. The IHT owed is then repaid as soon as the property in the estate is sold.
However, there can be a trap with the payment of IHT, whereby you will be personally liable for the tax, of which many people are unaware. If the deceased made lots of gifts during the seven years prior to their death and these exceed the deceased nil rate band of £325,000, then the recipient of the gift is liable to pay the IHT. This can catch people out who have received gifts in the years previous to death and all the money has been spent. It can be difficult to then find 40% of the value of a gift which would be due to HMRC at that stage.
What is a gift for IHT purposes? This can be cash, investments, property, cars, jewellery, art, furniture and the list goes on. Anything which has value and has the effect of reducing the value of the estate of the person making the gift is a gift for IHT purposes
https://www.mayowynnebaxter.co.uk/latest-news/who-pays-tax-on-inheritance/

In addition to potential issues with IHT, there could also be issue with care funding if he’s given away his assets.

Why always a Labour dig? All Chancellors take IHT, not just this one. Pointless posturing. Also the money goes into the Exchequer, it's our money.

Just FYI everybody, Rachel Reeves doesn't personally have your IHT! We all do in healthcare and schools etc.

Anyway I'd take it if you can be strong enough not to let him overstep your boundaries. He can't actually take the money away if it's a gift. If you're not strong enough, don't, but it's a lot of money to turn down and arguably having strong boundaries is a good thing to practice anyway?

But how likely is that to happen in reality? He's downsizing so will still own a property. He may have other assets, savings, investments etc. They will all be available to pay IHT before they would look to recoup from gifted money.

I know MN likes to pull the 'all his money will go on care costs' card, but in reality, the chances of a wealthy person being run down to very little by care costs is tiny. If this is a concern, they could talk to him to make sure he's keeping back sufficient assets to pay IHT and several years care costs.

The issue doesn’t seem to be boundaries, it’s controlling and manipulative behaviour. It’s unpleasant to be on the receiving end of that, however firm these boundaries are.

It’ll be “I did that for you, now do this for me”. The famous MN “That doesn’t work for us”, won’t stop him keeping on.

I wouldn’t take the money, there are potential legal implications as he is 83 and may need care etc but mostly because it does give him power even if you have strong boundaries.

My DH & I made mistakes in the past accepting “gifts” from his parents. One gift turned out to really be a loan (after a few years they asked when we intended to pay it back), another gift (which they gave us because they really wanted to give his brother something but felt they had to give us something too) came with so many strings it was impossible, another (similar to the one above) caused a bank investigation. After 30 years we still get “remember when we bought you X” and every time I want to scream “you didn’t buy it, it was a f loan” and they take credit for sorts of things we achieved “if we hadn’t bought you X you wouldn’t have been able too…”.

There are many ways this can be held over you,

You need to mentally reframe it as him not giving you the money to control you, he's simply giving DH his inheritance early. So, no strings attached. DH needs to make it clear the money does not give him a say in your life, and if that's his intention, you won't accept it.

Either way, definitely insist on a solicitor drawing up a binding contract that states he is gifting the money with no expectation of repayment in his lifetime.

I would have been worried about taking it for soemtiing like school fees as he can always threaten to take it away if you don’t do what he says.

The house though I’d accept because what can he do once you have the money 🤷‍♀️

Agreed. I suppose it's a calculation about how much unpleasantness you will 'pay' to be financially secure. You are also somewhat in control of how much you allow the unpleasantness to affect you so that should enter the equation.

He's offering to pay. You aren't asking. That's the difference. You owe him nothing because he's doing it of his own volition.
Your life will be so much easier! You can invest more on your children and so much more.
It's a generous offer and I'm sure you'll be able show your gratitude without feeling that you have to be beholden to him.

Hmmm. If it were me I'd make sure the gift plan was legally watertight and he had no comeback on the money in a formal sense. Then I'd have a conversation with him along the lines of - dad, this is amazingly generous, it will make a huge difference to our lives. But you can't use this money as a hold over us, I will still need to say no to things sometimes and the money won't buy you power over us, but rather our gratitude. If you're ok with gifting us the money on those terms we will gratefully accept.

Then hold firm on your boundaries if he starts being difficult with you, and remind him of the conversation.

I would take it, it will make a massive difference to you all, and TBH any pressure or guilt you'd feel to drop your boundaries is all in your head, so you can work on that.

I would accept graciously tbh. He sounds decent enough if he would offer to do that! I wouldnt be able to even dream of help like that. I would just maintain your boundaries but I think I would accept a bit of annoying behaviour if it meant giving myself and kids a massive leg up in life! He wont be around forever either. I would just suck it up 🙈

Take it and enjoy it , think of it as something nice he can do for the whole family.

He can ask to move in as he gets older and more frail. Or for more help and daily care. Those are the possibilities I'd be concerned about.

I can't imagine not accepting that level of help. I really can't. It would improve my life so bloody much if I ever had that sort of help.

Can't you accept it and then put down some boundaries, as pps before me have said?

the 7 year rule applies to IHT but not for deprivation of assets. Councils can look back as far as they want nowadays if they think someone has deliberately given away funds so they can avoid paying for their own care/care home fees etc. If OPs FIL still has a smaller house to sell to fund his own care home (if needed) or to pay for daily carers then that might be ok though?

He can ask what he wants but he won't have any control over the answer.

It's different with ongoing payments for private school etc, as he can threaten to stop those.

If you think he might hold it over you or keep casting it up/use it to manipulate you then no I wouldn’t.

Personally I wouldn't, being beholden to someone, especially if they are tricky is not fun.
I would also beware people who say it's better than it going in inheritance tax- the problem is if your FIL does not survive more than 7 years the tax man will look at all large disposals in the last 7 years- so they could ask you for it (or some of it), especially if his council has had to fund his care because of those disposals.
There are currently ways around inheritance tax , but unless you have millions they are not usually practical, also the law can change.

Take it. It's v different paying off a mortgage to dangling money all the time... school fees leave you beholden. If he doesn't give you the mortgage money, no change; if he does, wonderful.