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

Your second point is factually incorrect. If the gift brings the estate in excess of the IHT threshold, the estate will be liable to IHT. OP is liable for nothing unless IHT on the estate is due, potentially reducing hers and brothers £89k pay-out.

This.

Sorry for your loss, @MellowPinkBee

If the 89k is a gift won't you have to pay IHT as the gift giver didn't survive 7 years after the money was given to you?? When you apply for probate you need to declare this money and will probably have to pay the 40% inheritance tax.
Obviously you have not said if it was a gift or a loan or what was specified in the will written 10 days before he died.

So your father had every possibility of adjusting his will to account for the gift. And chose not to. Not that he forgot or that he didnt have time. He chose not to.

So honour ypur father's wishes and his will as written. He wrote it before his death and it was what he wanted

No. For a start each individual can make an annual exempt gift of £3,000. So assuming no other gifts, the amount being assessed should be £86,000.

If the estate, plus the gift exceeds the relevant IHT threshold, the estate will be liable to IHT on the excess.

So, there is no direct liability on the recipient of the gift.

What could happen, is that the gift, when added to the other assets, totals an amount in excess of the threshold, the estate will be liable to IHT, and therefore the size of the estate to be distributed to the beneficiaries will be lower.

But no, IHT will not affect the gift, but the estate to be shared 50/50.

You owe your brother absolutely nothing and you have witnessed that this was your father’s exact intent.

You’re already not talking so do what you like!

IHT only becomes relevant if the father's estate plus this gift is over £500,000. If this is not the case then the entire discussion around IHT is irrelevant.

"When you apply for probate you need to declare this money and will probably have to pay the 40% inheritance tax."

It appears that the OP may be the executor of the will (she said "my brother is suggesting that I go against the Will").

As executor, the OP will need to declare the gift to HMRC.

However, as beneficiary of the gift, the OP will not have to pay any inheritance tax.

Instead, the value of the gift reduces the amount of the nil-rate band (currently £325,000) available to the estate.

This will mean that there is more IHT to pay by the estate before it can be distributed to the children according to the will.

So, practically speaking, the OP as beneficiary does not pay any IHT on the gift.

If the estate is already over £500k (after the gift) then the previous gift of £89k will have the effect of increasing the amount of IHT payable by £35,600.

Assuming that the will divides the assets equally, this means that each child will receive £17,800 less from the estate.

Christ, you really do have a bee in your bonnet. Are you a staff member at HMRC?

Lots of people still refer to HMRC as “the tax man”.

I don't see any problem.
Let the Solicitors/Executors handle the distribution of the will as the will is intended to be distributed..

You do not need to get into your brother's "what he intended" argument any more then he can possibly know what your father intended.

Your father's will is what your Father intended.

No, I just get exasperated by ignorance

That must be taxing.

😂

If there’s inheritance tax due, I’d say you should pay more to take account of the extra gift.

The OP has no legal or moral obligation to give in to her brother's demands. There IS a legal and moral obligation for the executors to discharge the will exactly as written.

The history of SIL upsetting anyone or trying to second guess father's intent is irrelevant, at this point the 89k isn't part of the father's estate, it belongs to the OP and her brother is demanding a large gift, I'd decline.

It sounds like the father died in 2024. To be able to distribute to the beneficiaries of the will, any IHT liability will need to have been paid prior to any payment.

I don't know why you think OP should pay anything. If the gift reduced the IHT threshold and IHT was payable, it was payable by the estate, not any recipient of gifts while the father was alive. But that was all done and dusted, and the estate distributed in accordance with the will. Job done, no do-overs.

The moral case for giving brother anything is equally weak. The father decided in his lifetime to make an outright gift to OP, presumably off his own back while he was of sound mind. His will then left money to each of them. Why does the brother have an entitlement to an equal gift? If that is what he wanted, he'd have done it. In any case, the gift was to help OP out of a sticky situation resulting from divorce, not to enhance her wealth or go to Disneyland.