Middle-aged Daughter Problem

[anny1942]

I have an only 52-year old daughter who is married to a rather controlling man. My husband (who is her step-father) invested a large amount in this man's business which was eventually lost. Consequently my son-in-law became aggressive and unreasonable, and engineered a rift between my daughter and I which lasted a year, during which we received regular abusive texts and emails from her. My daughter's father, who she was previously close to, was also ostracised after he was physically attacked by her husband and has had no contact with her, or his 14 yr old granddaughter for 2 years, despite his efforts. My daughter eventually started speaking to me again last year, possibly because she needed me to pay her daughter's school fees which they could no longer afford. This I did for 3 terms until they sold their house and were able to resume. Over the last year, my daughter and I have met regularly for coffee (we live in the same town) and have got on very well. I occasionally take my granddaughter out shopping etc. Any mention of her husband is avoided and I cannot visit her home. She sometimes comes to our house, but my husband won't allow my son-in-law here, because of the dreadful way he treated him with threats and blackmail.
Now, however we are having to sell our holiday home where my daughter and her family have enjoyed 13 years of free holidays, as we can no longer afford it. We originally put it in my daughter's and my stepdaughter's names, with an agreement signed by them both that should we need the money, we could sell and they would return the money.
My daughter now will not speak to me again and said she thought the property was hers and we should sell our own home if we needed the money.
I am very afraid this will escalate again and we shall have to resort to law to get our money back which is the last thing I want to do. This is not at all like my daughter and I fear my son-in-law is controlling her again, although she is quite strong-minded herself.
Should we do as she wants and sell our own house, do you think? I am at my wit's end.
Annie

Hi Annie
I didn't want to read and run, but my thoughts are that you need to stick to your guns and continue with selling the holiday home. You should not have to sell your actual home in order to keep your daughter ( and SIL) happy! Presumably the document that was signed is legally watertight? What does your stepdaughter think? She's part of the equation too!

Sounds like yr daughter is being manipulated by her husband. You need to meet up and explain the situation before it goes bad.

I hope a wiser MNetter can offer better advice. You poor thing.

"We originally put it in my daughter's and my stepdaughter's names"

Why?

If it's in their names I'm not sure it's yours to sell.

I'll answer my own question in the absence of the OP.

Someone who has a daughter aged 52 is probably in their seventies, at least. Transferring assets into children's names is a popular, and shit, way to "avoid inheritance tax". Unfortunately, if you transfer a large asset out of your potential estate to others while retaining some sort of hold on it (such as an agreement to have it back on demand) then it's a "gift with reservations", and may fall back into your estate upon your death.

The scheme, I suspect, was that the agreement would be conveniently forgotten upon the OP's death, so that the holiday home would pass to the children outside the estate and therefore outside IHT (which, thirteen years ago, was more onerous than it now is).

But the reason people are advised against these scheme is that, aside from potentially being ineffective, they are a nightmare if circumstances change. MSE's forums are full of, for example, people who transfer their house to their child with an agreement the donor can live there rent free (itself a "gift with reservation", of course). The child then gets divorced and the donor's house is then part of the marital assets.

This scheme was doomed. The holiday home is part of the daughter's estate, so if one of the children pre-deceased the parents, the agreement would lapse and could not possibly bind the deceased's executors or heirs. It isn't an effective IHT shield. And, worst, if the recipients refuse to abide by the agreement, there is a very, very messy legal action involved in fixing it.

The OP needs professional legal advice, pronto.

Others thinking of engaging in schemes like this need professional legal advice and their bumps feeling, pronto.