Family feud and inheritance

[MellowPinkBee]

I adore my brother. Approximately 33 years ago he married an incredibly insecure woman who came from an incredibly disfunctional family. Appalling manners, absolutely no idea how to behave and offended not only our family members but also our parents friends. We were continuously making excuses for her even though she was always such an embarrassment. Family gatherings were always tense to say the least but my parents and I always took the higher ground when she had her continuous digs to make herself feel better about herself. She was insanely jealous of my brothers relationship with our mother and she hurt my mother on so many occasions but my mother said nothing. About 26 years ago we had a family Christmas and she deliberately excluded my son who was about 3 at the time from a Christmas Eve occasion leaving cookies & milk for Santa. After new year, I let my brother know exactly how I felt about her and I was speaking for my parents too, particularly my mother. As a result my brother has not spoken a word to me until in 2023 my father died and my mother followed in 2024. My father’s Will split his estate 50/50 between my brother and I. I divorced my ex husband in 2022 and had to buy my ex out of his equity in the house. due to my age, late 50’s I was limited in the amount I could borrow so my father gave me the shortfall, £89,000. Now my brother is suggesting that I go against the Will and give him half of what my father gave me as that was my father’s intention. Please let me know what you think I should do

That would only apply if the fathers estate (including the gift) was more than £500,000.

And even then, the recipient of a gift does not pay IHT on the gift unless the gift (or all gifts if there have been multiple) are more than £325,000.

Otherwise, the £89k gift will reduce the £325k tax free amount of the father's estate meaning that there is more IHT to pay on the rest of the estate

So a man who hasn’t spoken to you in 26 years has contacted you and demanded £45,000 out of the blue.

No. End of conversation.

This.

That is crystal clear then - you do not split the money you received beforehand. Your father sounds extraordinarily sane - he didn’t want to disinherit his child but he recognised a substantial difference between the relationship and behaviour of his two kids in a different way.

Well, you'll have to pay 40% tax on that OP due to your DF dying within 0-3 years of making the gift. You should pay that out of your share of the inheritance, not out of the estate before payout, as that wouldn't be fair to your brother (even though he sounds like a delightful individual).

Always stick to the will, it’s not for anyone to change the wishes of the deceased.

You do nothing, do not engage

Hmm tricky one. Your parents gave you a substantial amount of money. Did they even it up with your brother? has your brother received big gifts/loans in the same way?

I can see his point but I can also see how it feels a bit money- grubbing from your pov. Can you give him £45k to even it up?

I agree with others that say morally you should give him an equal amount. Your justification that he married a woman you don’t like is irrelevant, however technically the money wasn’t mentioned in the will so you don’t have to give him anything.

How much was the inheritance overall ? If the £89k was a good chunk of it, I can see why your DB might be salty about it.

That’s quite the drip feed. You already have your answer.

I don't think this is a given.

He may well have been perfectly aware that a gift one year before makes it part of his estate for tax purposes and he willed his estate to be split 50/50.

Unless there was a specific reference to the nearly £90k by him then I would split the estate 50/50.

I suspect if your brother consulted a lawyer this might even be his legal right. (AI says not.)

He hasn’t spoken to her because she hates his wife and told him ‘exactly what I thought about her’ and that she spoke for her parents too.

The things the op has said about her brother’s wife in the opening post, when she isn’t angry about some biscuits are appalling. I can’t imagine what she said to him at the time.

Why would the brother want a relationship with the OP after that?

Or maybe he does want a relationship with the OP but he’s been spending the twenty six years teaching his wife some table manners so she’s not an embarrassment and it’s taking a while because of just how bad they are.

You haven't spoken to your brother in 26 years. Who cares of he doesn't speak to you ever? Your dad stipulated 50:50 in his will. He could have said minus the money he gave you prior but he didn't. I wouldn't be giving him anything and would block his number and have all communication through lawyers.

Drip drip

Did your brother also not speak to your parents ever again after you told him what you thought of his wife?

I had a colleague who had a similar dispute about a will. It went on for years and in the end all of the inheritance went in legal fees. If you think your brother will try to fight this legally id try to reach an agreement or you could lose it all.

One extra consideration might be to look at your mother's Will.
Did your mother leave assets for your DF to utilize but that were in trust for her two children, equally, after his death?
Only seeking legal opinion will give you an accurate answer to your question.

How did DB ever know about the financial gift to you if you have no contact? Was he an executor of your DM's Will or something?
Is there nothing much left now to share?

The background has nothing to do with this. You follow the will and abide by your father’s wishes. If he wanted things to be different, he would have changed his will.

Your father could have left you less in his will. He didnt. So his intentions were clear and you follow his wishes. What happened to your mother's estate - also 50/50?

Rightly or wrongly, your brother chose to cut you out for many years. He will now pay for the consequences of that choice - I would give him nothing.
Very poor of your DF to treat his children differently.

That's assuming that the father's estate is worth more than £500k anyway. Otherwise this whole discussion of IHT is irrelevant.

"Well, you'll have to pay 40% tax on that OP"

You are mistaken about this. That would only be the case if the gift (or total of multiple gifts) was greater than £325,000. IHT would then be payable on the excess above £325k.

"You should pay that out of your share of the inheritance, not out of the estate before payout, as that wouldn't be fair to your brother"

Fair or not, the beneficiary of a gift under £325,000 is not required to pay anything.

In addition, the executors of the estate cannot force a beneficiary of a gift under £325k to pay anything.

While the gift is counted by HMRC as being still part of the estate for IHT purposes, it is not part of the actual estate itself. As a result the executors have a reduced nil-rate band available to the estate and have to pay any IHT due based on that reduced band.

It is possible to follow the will, take the inheritance, restore a relationship with your brother and give him a gift of your own £45k

"He may well have been perfectly aware that a gift one year before makes it part of his estate for tax purposes and he willed his estate to be split 50/50." [emphasis added]

Exactly, for tax purposes only. A gift made before death means that the gift is no longer part of the estate.

The executors cannot touch the gift in this situation or take it into account when following the instructions in the will (unless the will says otherwise - but in that case those instructions would be in the will).

It doesn’t matter if the estate was under the threshold.

So @MellowPinkBee- ignore the background. Your dad made that will after giving you the gift. He clearly wanted to be fair and split his estate 50/50 but didn’t see the need to match the gift to your brother in his lifetime.

Your brother hasn’t been part of your life for quarter of a century, and your long OP makes it clear you hate his wife and his life choices, so I’m assuming you aren’t all that keen to rebuild a relationship with him.

Just stick to no, dad made that will after giving me the money, these are his wishes and we’ll stick to it. (The only issue I could see is the tax might need to be paid from you, not from the estate)