Probate

[philip52]

Hi

just after some advice

 

in 2017 my mother died and my sister was the executor

 

it has just come to light that she withheld information from the beneficiaries that within 7 years before my mother died she had paid off my sisters ex husband in a divorce so she could keep the property.

 

I understand that this should have been declared in the accounts

 

what rights do the beneficiaries have now to reclaim this payment .

 

this only came to light through the death of another family member who knew what had happened ,

 

do we have any rights to challenge this after all this time

[Haunter]

Most of the payment will go to IHT.

 

Depending when the gift was made, it will be subject to the taper rules.

 

What was the value of your late mother's estate at the time of her death?

 

What is the value of the gift she paid to the ex husband?

 

If the gift was given/paid to the ex husband and your late mother did not benefit from it, then it might be the case that you and other beneficiaries and the IHT are owed nothing.

 

Was your sister's home jointly owned with her ex husband?

 

Questions, questions. It all depends on the circumstances, but based on what you have said so far, it appears your late mother made a gift to the ex husband and not your sister.

 

What are you trying to achieve? Does your sister have children under the age of 18 living at home with her?

 

Haunter

[honeybee13]

Hello there. I'm sorry to hear of your problems.

 

Was your sister the only executor and was there a solicitor involved please?

 

Depending on how much money your mother left, the amount she gave to your sister would be part of the inheritance tax calculations. I hope she declared that to HMRC.

 

We have a lot of threads about executors not acting correctly, it's worth having a read around the General Legal forum

 

HB

[Haunter]

The gift was made to the ex husband and not to the op's sister.

 

 

When was the gift given to the ex husband, before or after the divorce?

 

 

Haunter

[philip52]

Hi Thanks for your reply I am sure that she did not contactHMRC and it went to probate and she was the only executor.

 

I have no idea who received the payment but it was part of the divorce settlement as she kept the property and he was paid off as it was in joint names

[Haunter]

If the ex husband is not a beneficiary under the Will, then the gift has been made to a third party and not to a beneficiary under the Will and therefore is not included in your late mother's estate.

 

 

If the value of the estate at the time of death was under the IHT threshold, then no IHT is due.

 

 

Haunter

[philip52]

before

[Haunter]

The gift was still given to a third party and not a beneficiary under the Will.

 

Do you know if any IHT was even due from the estate?

 

Your sister's property has no bearing on your late mother's estate, your sister was the owner (joint) of the property and not your late mother.

 

Have you got a personal beef with your sister?

 

Haunter

[BazzaS]

The only relevance is if there are inheritance tax implications.

 

Consider the value of the (non-exempt) gifts in the 7 years preceeding the death, added to the value of the estate. If this sum is less than £325k, there are no inheritance tax implications.

 

The fact that the deceased gave a sum (to assist a family member) prior to their death doesn’t affect the will. If they had wanted to change their will they could have added a codicil to the will or created a new will. If they hadn’t done so, and had had plenty of time to do so between giving the gift and their death : you’d be hard pushed to claim it wasn’t a deliberate choice.

[mariner51]

Mother made a cash gift to dau to facilitate dau's buy-out from dau's husband.

The amount should have been included in Mother's Estate (if paid with in 7 years of death) by the Executor for calc of IHT threshold.

How much did Mother give to her dau?

What was the Probate assessed value of her Estate?

[Ethel Street]

philip52,

 

I am not clear what you are trying to achieve.

If it is to increase the amount received by other beneficiaries you won't achieve that.

 

Your mother was entitled to give a gift to whoever she chose

(assuming she had mental capacity and didn't gift it under undue duress or coercion).

Therefore the money she had given away was not in the Gross value of her Estate at date of death.

 

There is no basis for the beneficiaries recovering it, not from what you have said.

It might be the case that that the gift should have been included in the Probate IHT calculation

but that doesn't mean the amount of the gift physically comes back into the Estate.

 

It just means that HMRC would ask for additional IHT

and would base the IHT calculation on the gross value of the Estate at death + the value of gifts in previous 7 years

(on a taper scale, the longer ago it was gifted the less of it is taken into account).

 

But as the cash to pay IHT has to come out of the Estate it would mean beneficiaries receiving less.

 

You say

"I understand that this should have been declared in the accounts".

You mean the accounts the Executor should give to the residuary beneficiaries showing how the Estate was distributed?

 

The value of pre-death gifts would not be shown in the accounts.

No reason to show it because the value of the pre-death gift was not, by definition, included in the gross value of the Estate at death.

The place it would have to be shown is in the Probate application form.

 

You say

"she withheld information from the beneficiaries " about the pre-death gift.

She didn't have any obligation to tell you so it's not accurate to say she withheld it.

She just didn't tell because she didn't have to tell you.

[philip52]

Hi

In reply I was a beneficiary along with the grandchildren and my sister where .

 

One of my nieces asked me for advise as my mother had given my sister a sum of money to pay off debits and pay her ex husband his share of the property and it was with in 7 years of her death

 

as I was working abroad my sister was executor

 

now I am retired living back in the UK I have been asked this question .

 

I do believe that all gifts have to be declared given within 7 years and this was not .

[BazzaS]

I do believe that all gifts have to be declared given within 7 years and this was not .

 

Declared to who?. HMRC? The beneficiaries??

 

Declared to beneficiaries: not unless there is IHT to pay by the beneficiaries , when the beneficiaries need to know how much to pay & why.

If the estate pays the IHT or there is no IHT due : no need for it to be declared to the beneficiaries.

[Ethel Street]

 

It just means that HMRC would ask for additional IHT

and would base the IHT calculation on the gross value of the Estate at death + the value of gifts in previous 7 years

(on a taper scale, the longer ago it was gifted the less of it is taken into account).

 

But as the cash to pay IHT has to come out of the Estate it would mean beneficiaries receiving less.

 

 

My comment oversimplified what's potentially very complex situation. The point I'm making is that bringing pre-death gifts into the IHT calculation doesn't mean the pre-death gift comes back into the Estate for the benefit of residual beneficiaries, which appears to be what philip52 wants to happen (unless I read it wrong). Who actually has to pay the IHT on the pre-tax gift depends on several things - it could be the person who received the gift.

[mariner51]

Pre death gifts can have different limits, depending on reason, in addition to the person's annual allowance.

Can't see why one of your nieces is interested is stirring it, unless she feels slighted.

Gifts within a family can be contentious.

Maybe the mother took advice from an IHT Panning Consultant. The only person likely to benefit is the Tax Man, at the risk of tearing the family apart.

 

 

You still have not said how much your mother gave your sister?