Death. Avoidance of a Will & Tax avoidance etc

[Kibbles01]

Is it legal to sign over house deeds, bank accounts etc to one child and give a lump sum to another without the need to make a Will or declaring it?

Last year my mother died from cancer. She was diagnosed in March 2016 and died in November 2016. She was of sound mind until the end.

There was a Will which we were told had been changed (around 8 years ago) but since her death no-one has mentioned anything about that Will and nor has anyone found it or brought it up but from conversations had, it is obvious that things were signed over before her recent death which benefitted two of her children and excluded two other children.

We don't believe she was mainpulated in to doing this but since her death things have come to light and want to know if it is legal to sign everything over like this and what about inheritance tax issues etc. None have been paid.

There is a sizable property involved along with other things and two of her children will not see any of this because of these actions and is causing great distress and has caused a fallout with the sibblings.

Can anyone please advise.
Many thanks

With regard to probate, if everything was already signed over to someone else then is probate still going to happen as the new person now owns the property and monies not the dead person. Hope this doesn't sound dumb but it's very new to us.

YES - probate MUST happen because her estate includes anything handed over within previous 7 years. So even though a new person (unless her DH) now owns the property/money, the value of it is included in probate/IHT calcs as it was handed over within previous 7yrs.

If this didn't happen, everyone would hand their money and property to kids or friends if knew they were dying!!!!

Unless your mum also left substantial money, it is likely the house will have to be sold to release cash for the IHT bill.

Check the deeds at Land Registry - it'll hold the date of title transfer so you can prove whether IHT is due on the estate/property.

I suspect the house wasn't signed over at all - that it went to the husband (iht free) and he has sold the property and gifted the money to his daughter to buy the flat. With an estate that large it would not be sensible to do what you think has happened and the effect is the same if husband 2 inherited. If he survives 7 years the gift is tax free.

When was the house sold? Before or after your mother's death.

I'm a probate solicitor and would suggest that, if you and your siblings are unhappy with having received nothing from the estate, you should take legal advice as you may be able to bring a claim against the estate.

It sounds unlikely that your mother would actually have directly gifted assets worth £650k to a child when she had a spouse. This would not have been advisable from a tax perspective (I am not doubting what you say but wonder if there is a more complex arrangement here eg with a trust). Again, if you would like to get to the bottom of it then a solicitor could assist, but if you don't want to bring a claim against the estate then you may wish to just let things be, rather than pay a solicitor's fees.

If there was indeed a direct gift of over the available tax free allowance (up to £650k if your mother's first husband died before her), there may be a tax liability payable by the recipient of the gift, but if the gift was not to you then the tax is not your problem, if you see what I mean.

Sorry to hear that this has caused problems in the family.

To clarify, it is possible that the gifted assets could be brought back into the estate for the purposes of any claim. You will obviously need to take advice on this if you decide to go down this route.