Can my late father's will be declared invalid

[Willadviceplease33]

Hi, I've changed my username for this one and would very much appreciate some legal thoughts on this.

Dad died with hepatitis C and liver damage. He was a haemophiliac and a contaminated blood victim. He died about 20 years ago. His will was a mirror will and left everything to mum. Mum is now very elderly and in a care home with severe dementia. She hasn't got long to live.

If his well-overdue compensation goes to mum and even if she passes away a week after it will be entirely subjected to inheritance tax. I think this is dreadfully wrong, for the government to immediately snatch 40% back.

There is no way he anticipated this ever happening I.e. the government finally admitting fault. He never expected compensation to ever be paid.

Can my family (my siblings and I) somehow get his will invalidated so that it reverts to Intestacy? This would mean a lower iht bill. My logic is that he did not know the value of his estate when he wrote the will as this compensation massively outweighs his original modest estate, that is, he did not have testamentary capacity.

Please be kind. This scandal devastated our family.

Many thanks.

I dont see on what grounds this makes the will invalid?

You'd need actual legal advice, not MN, but I really doubt it. There is a Will and just wanting to avoid inheritance tax isn't a reason to say there isn't a Will.

If it helps to think about it like this, the people who made the decisions will all be long gone. It isn't the same government taxing the money as was in existence when your dad was treated so poorly. And taxes pay for lots of things. I know people don't like IHT but it is one of the least problematic ways to tax. Income tax and tax on goods affect whether people can pay their rent. IHT isn't that.

I don't think you can challenge the Will as it was not invalid, but maybe you can somehow change who receives the compensation. It seems odd to me that they would pay the compensation to the estate of somebody that died so long ago. Talk to a solicitor as soon as possible.

Just to add, you could also ask about a Deed of Variation. I am not a lawyer, and this is not really my field of expertise (I work with trusts) but I believe that compensation is not liable to IHT, but I doubt this would apply once it was in your mother's account.

It may be possible to vary the estate. A Deed of Variation or Family Arrangement is only effective for IHT if completed within 2 years, but if the compensation is not taxable, presumably it can be done at any time. Your issue with this is your mother's capacity so it may hinge on whether you have full Power of Attorney for her.

As I said, this is not my field, but these are the avenues I would explore.

You should speak to a lawyer, not mumsnet, but please do remember spousal exemption! If your parents were married, there’s is no inheritance tax on assets inherited by your mum from your dad, and unless he made gifts in the last 7 years of his life, if she inherited the whole of his estate she will also inherit his nil rate band amounts - amounts that can be passed on on her death inheritance tax free (up to £500k, made up of £325k plus £175 connected to the value of a residence if passed on to descendants on your mums death).

It can be complex so get advice but your mum inheriting and then you inheriting on her subsequent death is not tax inefficient and there is no different / better tax consequence if you’d inherited the compensation from your dad direct (because of your mum inheriting his nil rate band if she’s inherited the estate from him). No inheritance tax from husband to wife and vice versa, and then up to £1 million inheritance tax free (your dads and your mums nil rate band amounts) with only amounts over £1 million taxed when you inherit at 40% is the same as the vast majority of the country and is pretty fair.

huge hugs. I’m sorry your mum is ill. Get proper advice (very important - spend a couple of hundred quid on an hour with a local lawyer!) but this should no worse / different in terms of tax than if you inherited the compensation money from him at the time xx

There is no IHT between your married parents, and your Mum accumulates his share of tax free threshold, thus doubling the value of her estate that she can pass on tax free.

Is it because your Dad is not now passing on a property to you?

I am really sorry about what happened to your Dad, and agree that it would be unjust if his family are further disadvantaged by delays etc. Talk to a solicitor.

Thanks all. Who receives the first compensation payment does make a difference as it is initially entirely exempt from iht. Regulation has been passed on that. It is only if it passes through someone first (like my elderly mum) that it then becomes fair game to the government.

Some odious government officials who were around then are still around now. E.g. Ken Clarke who wad particularly disrespectful to the victims during the enquiry. Watch the YouTube excerpts..he hadn't even bothered to understand how Factor VIII was given to the patients.

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Can your mum sign any paperwork to say that she wants the compensation to go directly to the children? Then it will bypass her.

Presumably you can't vary your dad's will but your mother as inheritor could in theory vary the will.

If she has dementia does she have capacity though?

I suspect this is a no go..I would speak to an estate solicitor to check but it seems unlikely unless this situation is covered by the compensation rules.

Get legal advice, but I can’t see how you can argue your dad’s will was invalid just because he didn’t know the future situation when he wrote it.

Sorry, I should have clarified my logic. In order to have testamentary capacity you apparently need to understand the value of your estate when you write your will. Dad had no idea his compensation would come along. It dwarves his original modest estate; his working life was limited due to his illness and he died young.

You need proper legal advice on the will. Not a lawyer but also suspect you can't vary it as I think that needs to be within 2 years.

Are there any other options within the compensation scheme? So can payment be awarded to your generation and not your parents' given the current situation? Or could the amount be grossed up for IHT that in policy term ought not to be payable?

Being cynical, given the lack of urgency in making payments, you may not have a problem as your mother may also have died by the time they get around to making the award. I hope not, though.

Is it even about his will, I assume compensation is paid to the next of kin in situations like this (unless stipulated otherwise) and then what the usual rules are for her estate apply or the rules under the scheme apply. If your mum hasn't got capacity about how to manage that money is there anything that can be done there, have you got power of attorney for finances for your mum.

OP, I'm very sorry for the loss of your Dad and what he and the rest of the family must have gone through and sorry that your Mum is ill.
You, your sibling and your Mum will, quite rightly, be able to get compensation in your own right so, whilst I completely understand why it's extremely extremely frustrating that your Dads compensation will be subject to IHT I suspect there won't be a way around it.
The compensation scheme are planning to set up a financial advisory service for the people who are going to receive the compensation so maybe they will be able to help.
Anyway, you need proper legal/tax advice not Mumsnet thoughts.
I hope you manage to find a way around it though.

Do you have a solicitor dealing with the compensation claim? Ask them about a personal injury trust.

I'm not sure whether it would work in these circumstances, it is a specialist area, and they probably won't know straight away, but they should be able to refer you to someone suitable.

The difficulty is likely to be your Mother's capacity. Do you have PoA?

I deal with a lot of deceased estates, I cannot see any way you can do this - too longer period has passed for a deed of variation (that has to be within 2 years) and if the will was valid at the time, which if probate granted it was considered as being, then it cannot be challenged now.

Bear in mind that IHT will only come in after nil rate band thresholds have been exceeded. If a residence forms part of your mothers estate passing to you an additional Residence Nil Rate Band applies, and you fathers Nil Rate Bands can be claimed.

This means worst case you have £650K before IHT (assuming your dads estate went to your mum) and best case £1M if there is a property in the mix. anything over that amount is taxed at 40%

If your mother has capacity she can gift you his compensation, however it will still be counted for IHT, but every year she lives it can be subjected to taper relief meaning the tax %age reduces, finally to nil after 7 years.

But a challenge to the will, I would say not.

Irwin Mitchell are representing a number of infected blood victims and are looking into this.

It is sadly unlikely that your mother will actually receive any compensation - it appears to be being ramped up incredibly slowly while they wait for more people to die.

I know there has been some discussion on this but I think your concern is only an issue if your mum is still alive - if not the payment is made to the estate and then is subject to inheritance tax when you pass it on.

Even if you're invited to apply, it may be worth postponing any application until your mum has passed away. Applications have to be made by 2031. You may want to raise this with the haemophilia society.

Unlikely as it is a statutory scheme. There is supposed to be legal advice offered, but that is included in legislation which won't take effect until 31st March (probably).

Yes one of my siblings has poa. If that helps.

I can't get my head around this one. If mum or dad had received this compensation in the 1980s or 1990s when it should have been paid they would absolutely have planned for inheritance. To apply the same rules to my elderly mums estate on a payment from the government for wrongs they've done just cannot be right.

Are you involved or linked to this situation too?

I'm wondering about your idea to delay the application for dad's estate. So potentially our own claims and mum's claim could be put forward, but if mum is still alive we could delay dad's estate claim until she's not with us? This sounds the best idea .

BTW if mum had her full mental capacity she would be cheering us on. She was very financially astute.

Surely it's your Mum's estate/will that you need to be getting advice on, not your Dad who passed away so long ago?

Wills don't work on 'well it can't be right' they work on what is legal or not

As pp say - speak to a solicitor and preferably one who has already been involved in representing the victims. They should also be familiar with any special rules created for these payments. You cannot be the only person in this situation considering the insane length of time its taken.

There is no basis on the face if it for varying or overturning the will. Having PoA does not mean the holder can change the will in the DC favour - it has to be exercised in the best interest of your mother which would probably be maximising her resources for care.

These compensation payments are exempt from tax and care home fees. This is in legislation.

But themother is not the beneficiary - her DH was.

This is why you need a lawyer - the specific exemptions for government compensation payments tend to be tied to the beneficiary of the payment and not passed on.

This is not something that even law practicing MNers can help with due to the complexities of the circumstances