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Original poster

Unwanted inheritance

55 replies

didsnbump · 14/05/2013 21:14

Hi my grandfathers brother-in-law has just passed away and he is due to inherit what he had in savings. My grandfather is 92 and doesn't want the money as it will only get taken to pay for his care.
Does anyone know how we get round this so that we can share it between the rest of the family as my grandfather wants?

OP posts:
cluelessnchaos · 28/05/2013 07:40

The ops grandfather most likely feels guilty that his bils legacy is being used to fund his care. That is understandable.

MoreBeta · 28/05/2013 08:06

A deed of variation is definitley the way to go. In fact, from an estate planning point of view, most lawyers would strongly recommend this for a man of his age to avoid inheritance tax and indeed might strongly recommend passing it straight to grandchildren or even great grandchildren.

If it is a large sum of money I would recommend you find a STEP lawyer who will specialise in dealing with this kind of issue.

MadeOfStarDust · 29/05/2013 11:46

If care payments are involved a deed of variation will be deemed null and void - we have been through this as a family - the deed of variation was made and 6 months later gran had to go into care - the undistributed assets (house waiting to be sold) were reclaimed! As care is already being provided I'm guessing the deed of variation would be refused on those grounds.

Mendi · 29/05/2013 12:20

MadeofStardust I wonder if the position might be different here because the assets in question are savings which can be realised more quickly than a house waiting to be sold?

In any event, how is whatever benefits department deals with care provision going to know about a deed of variation?

WeAllHaveWings · 29/05/2013 21:41

In any event, how is whatever benefits department deals with care provision going to know about a deed of variation?

I think that is suggesting the op commits benefit fraud Hmm

MadeOfStarDust · 30/05/2013 09:14

Mendi - if there is an inheritance it has to be declared and contrary to popular belief Government departments do speak to each other, as do the banks speak to government departments when a sum of money above £5K is deposited.

If it is found that a deed of variation has been made - courts speak to government departments too.... then it will in this case be stopped/refused/deemed null and void as it is being used to prevent the money being used for care costs - whether intentionally or not.

(If the savings get distributed without a deed of variation people can end up in deep doodoo - conspiracy to defraud, theft (depending on mental state of inheritor), and having to pay back money they have already spent... etc..etc...)

TheSecondComing · 30/05/2013 09:21

This reply has been deleted

Message withdrawn at poster's request.

6monthson · 30/05/2013 10:51

It's no more 'graspy' of the OP that the tens of thousands of people who deliberately spend every penny they have on sky tv, gel nails and spray tans so that they never actually manage to save a penny so that they never actually go over the savings threshold when their benefits might start getting affected.

Gross over-simplification I know, but it's how it seems to me these days.

TheSecondComing · 30/05/2013 13:01

This reply has been deleted

Message withdrawn at poster's request.

ParsingFancy · 30/05/2013 13:14

Shock You'd be going some to save up £6K out of means-tested benefits, which IIUC is the threshold for deductions.

Most people affected by this have surely saved whilst working, and then had a dip in income?

SoupDragon · 30/05/2013 13:18

How is the OP "graspy" given this is her grandfather's wish?

SoupDragon · 30/05/2013 13:21

What should have happened is that the BIL changed his will earlier, leaving everything to the other family members. This is, in effect, correcting that error.

allinatizz · 30/05/2013 13:41

The OP hasn't said anywhere that her grandfather is recieving state funded care.

He may be well off anyway, and just not want to take on this money at his stage in life, preferring instead to see the benefit go to other family members more in need of the money.

I agree with HugeLaurie - your grandfather should speak to the solicitor dealing with the probate and explain the situation.

TheSecondComing · 30/05/2013 14:15

This reply has been deleted

Message withdrawn at poster's request.

AgentProvocateur · 30/05/2013 14:42

allinatizz

"My grandfather is 92 and doesn't want the money as it will only get taken to pay for his care."

The OP makes it quite clear that the only reason for redistributing the money is so that the grandfather doesn't have to use it to pay for his care, so that the state will pay instead.

allinatizz · 30/05/2013 17:57

The OP didn't make that "quite clear" at all. Although it may be the truth we won't know until she comes back and tells us.

I read it as if he would prefer to let other family members have the money, as all his own money is going on care.

My own grandmother is in a similar situation (without the inheritance). She has to pay for her own care as she is not eligible for state care. She has enough money to cover her (probably) for the rest of her life as she is in her late 90s. This is perfectly fine, and none of the rest of the family begrudge it at all - every penny should be used to give her the best quality of life possible and there are no expectations that she will ever get any state care.

However, if she were to come into a large sum of money, she wouldn't want it - she is lucky enough to be "comfortable" and doesn't need any more money. I know for a fact she would prefer to see it given away to other family members, rather than have it included in her estate, spent on care, or inheritance tax in due course. The reason I know this is that she does the lottery every week - not so she can be a millionaire, but so that if she won, she would give the ticket to her grandchildren to claim our fortune! Grin

She, as could well be the case with the OP's grandfather, would do a deed of family variation so that the money could be better enjoyed elsewhere, rather than sitting in a pot until after she dies.

allinatizz · 30/05/2013 17:59

And there is a difference between "tax avoidance" and "tax evasion".
IHT is the trickiest of tricksters... you pay tax on everything you buy and everything you earn throughout your entire life, then you have to pay tax on all that again for having the temerity to die.

lougle · 30/05/2013 18:19

"My grandfather is 92 and doesn't want the money as it will only get taken to pay for his care."

How can this sentence be read in any other way than 'tax evasion'? Confused

The grandfather is aware that if he has money he will need to give it to the state to pay a contribution/all of his care. He doesn't want the money to be used in that way, so he wants to give it away before the State is aware of it.

It's tax evasion. Avoidance is legal, evasion is not. This would be evasion.

Whether you agree with the current laws on inheritance and care bills or not, the rules are the rules.

TheRealFellatio · 30/05/2013 18:32

It's not tax evasion because it is not earnings and he doesn't have a tax bill. Even after he has inherited the money it will be net of inheritance tax if there is any payable, or he will get all of money gross but then receive a tax bill for the tax liable (presumably but not sure how these things work) so it is certainly not tax evasion. The executor and the probate solicitor will make sure of that.

All it is is evading the possibility that it may be taken to pay for his care by giving it away - which may be unethical in the eyes of some, but it is not illegal as far as I know.

TheRealFellatio · 30/05/2013 18:33

Can you not opt to give cash lump sums a gifts every few years, so long as they don't go over 50k? Not sure how much money we are talking about and how many people he wishes to divide it between.

TheRealFellatio · 30/05/2013 18:36

Can you not opt to give cash lump sums a gifts every few years, so long as they don't go over 50k? Not sure how much money we are talking about and how many people he wishes to divide it between.

allinatizz · 30/05/2013 18:55

If you give cash gifts of more than £250 at a time, you have to survive for 7 years or they will be taxable. At the age of the gentleman in question, it's not a wise thing to rely on.

The OP didn't mention IHT, anyway. Although a financial adviser or solicitor would be able to give advice on that.

I still don't think the OP was necessarily implying what AgentProv is saying.

TheRealFellatio · 30/05/2013 19:05

Oh ok, good point. Although even if they put the tax amount by, or invested it in something safe, it's still worth a punt, and cheaper than a bank loan!

MadeOfStarDust · 30/05/2013 19:17

If there are state care bills to be paid - you are not allowed to give away money to avoid paying them - even gifts! The care bills come first. They will fight tooth and nail to take away EVERY penny above the savings threshold - every single penny - we have been there....

Moxiegirl · 30/05/2013 19:18

Tax rules are not the same as guidance for care charges. It's deprivation of capital for the purposes of a financial assessment.

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