Any help gratefully received

Apologies in advance for the long post, but this is worrying me sick and it's a long time til my solicitor's appointment next friday.

Our father recently died. He was married twice so I have a full sister and 2 half sisters. The older half sisters I'll call 1 + 2, I'm 3, my full (younger) sister is 4.

1+2 are older, established, live 200 miles away. 1 had a good but infrequent relationship with dad, 2 is practically estranged - (a big fall out years ago, never repaired).

In 2014 dad gave the house that he + 3 + 4 live in to 3+4. It was owned outright, approx value £140k. 1 knew she wasn't getting a share of the house (she and dad spoke about it a few years ago, she was told it's 3+4's. 2 had no idea. At the reading of the will (will reiterated that the house is 3+4's, plus a bank account containing a few thousand that is to be split between the four of us after funeral expenses have been paid) we all discovered that 3+4 are the executrices, but everyone was very polite at the reading, nothing was said about the house not going four ways. We all go to the house for a cuppa etc.

1+2 are now not happy that they won't get a share of the house. 4 agrees that it should go four ways as that's fairer (as 1 2 +4 see it). I argue that had dad wanted that he would have put it in his will but chose not to. Arguments ensue. Lots of tears. (1+2 want paying because dad abandoned them when they were fairly small children), 1+2 say they should each get a quarter because we're all sisters and 4 agrees. 3 disagrees. More arguments and tears. Lots of unpleasantness. Then it gets mentioned that a court case could be brought to force the sale of the house, and the proceeds split four ways. 3 disagrees vehemently! 3 wants to live in the house and will buy 4 out as she wants to move out anyway so that makes sense. 1+2 very unhappy. 1+2 drive home.

3+4 at odds. 3 won't pay for dad's abandonment of 1+2, 4 worrying herself to bits because she feels stuck in the middle as the other executrice.

3 gets legal advice. The house is safe, was transfered a few years ago so nothing dodgy, and is not part of the estate. Estate is bank account only (which is a joint account with 3 so nothing tricky there). Dad was in full control of his faculties and just wanted to make sure 3+4 always had a roof over there heads, 1+2 are both sorted. The cash/cheques he gave to 1 3+4 were just generosity. Dad had good pensions and lived a simple life so he was making sure we were ok too. Nothing suspicious, not deliberately getting rid of his wealth for tax avoidance or whatever, just spare cash that was no use to him. He was never a lover of money, enough is plenty so give the rest to someone else if they need it type mindset. (3 definitely needed it, she gave up a good job to be dad's carer a few years ago, and carer's allowance is pitiful! 4 does not have a high paying job, so she needed it too.)

That was a very full story for a few questions but you never know what info people will want/need :)

Questions -
Do the cash/cheques have to be declared to HMRC because they exceed the £3k pa limit? Or do they come under the estate which is nowhere near the £325k limit?
What's the limit for giving money to children if it's from your own income and doesn't affect your lifestyle?
What happens if some want to declare and some don't?

Thanks everyone who read to the end, and thanks in advance for your help.
The last private resident of 10 Downing Street was a Mr Chicken.
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Comments

  • Yorkshireman99
    Yorkshireman99 Posts: 5,470 Forumite
    edited 19 November 2017 at 3:12AM
    Who are the executors? Gifts within the seven years before death have to be declared. They are exempt for up to £250 per individual. Also larger amount if it is upon marriage of child. Other wise total of other gifts over £3,000 get added to the estate value. A quick Google will,tell you the details. Gifts paid out of income that do not affect the donor’s lifestyle are exempt but those would have to proved. Donees have no say in what is declared. Even if the estate is well below the IHT threshold they still have to be declared. Challenging the will is going to be expensive and uncertain. Unless anyone can claim financial dependency then the will likely fail and have a big bill. Also much of the estate could be swallowed up by the costs.
  • Linton
    Linton Posts: 17,061
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    Yorkshireman has given a good and succinct summary of the position regarding inheritance tax. To emphasise one point, the declaration of assets to HMRC is solely the responsibility of the executor, it’s not open to a vote of the beneficiaries. The executor has two main legal responsibilities: to provide an accurate statement of the assets at time of death and to ensure that the assets are disposed of according to the deceased’s will. Both tasks are based on facts. There are no choices to be made, fairness is irrelevant.

    Even if they get somewhere, which would seem to be very unlikely, challenging the will would appear to be of little benefit to 1 and 2. It can’t make any difference to gifts made prior to death, only what happens to the estate after death.
  • Linton wrote: »
    Yorkshireman has given a good and succinct summary of the position regarding inheritance tax. To emphasise one point, the declaration of assets to HMRC is solely the responsibility of the executor, it’s not open to a vote of the beneficiaries. The executor has two main legal responsibilities: to provide an accurate statement of the assets at time of death and to ensure that the assets are disposed of according to the deceased’s will. Both tasks are based on facts. There are no choices to be made, fairness is irrelevant.

    Even if they get somewhere, which would seem to be very unlikely, challenging the will would appear to be of little benefit to 1 and 2. It can’t make any difference to gifts made prior to death, only what happens to the estate after death.
    Sound advice. I would also add that the executor needs to be strong willed and not allow themselves to be bullied by the dissenters. Also being scrupulously fair and open with the beneficiaries will make things easier. Come back here if you have any queries. Good luck.
  • jackyann
    jackyann Posts: 3,433 Forumite
    I agree with Linton and Yorkshireman.
    However unfair it seems to 1 & 2, if your father had full capacity as you say, then what he did with his money in his lifetime, and his will reflect exactly what he wished.
    This is what I suggest:
    Do everything by the book and in the open. Inform 1 & 2 at each stage. If they say they are getting legal advice, say something like 'good, it will help get this sorted'.
    They will probably not tell you what legal advice they have been given, as it will almost certainly be as Linton & Yorkshireman have told you.

    I suspect that your father was aware that 1 & 2 would get upset, but thought you should weather it because you & 4 need the house. However, I doubt he realised it would cause a rift between you & 4.
    My suggestion is to be kind to her and give her time. without knowing you and her, it is likely that she feels rather guilty about the way this is panning out (doesn't matter that she has no reason to!) and wants to be the peacemaker. You perhaps feel differently, having given up a job to be dad's carer, your situation is perhaps a bit clearer emotionally.

    Legally (though I wouldn't suggest this to her!) there is nothing to stop 4 giving some of her share to 1 & 2. But this I think, would not satisfy them emotionally (they want to be seen as equal sisters). 4's wish to peacemake disadvantages you and I wonder if she realises this - emotionally I mean - I wonder if she takes you rather for granted!

    It would seem, in the scenario you have outlined, that the legal position is clear; however, a little time could make a lot of difference emotionally.You could say to your sister 'let's not talk about it for awhile, let's both just think about it'.

    As long as you don't take forever to sort out probate, and as long as you keep careful records, there is no rush. You can tell 1 & 2 that you are still sorting out the exact final details. I suggest this as I think 4 may feel differently as her grief becomes more manageable. At some point you could gently remind her that the executors' job is to administer dad's final wishes, not get caught up in other tangles.

    I also wonder if there is another relative, or family friend who knew your dad well that she could talk to about this?

    God luck
  • getmore4less
    getmore4less Posts: 46,882
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    Challenges to the will won't change anything the house is not an asset of the estate.

    Challenges to a gift in 2014, good luck with that one.


    There is a potential complication on probate as there is a gift with reservation as it seems the father still lives there.

    Chances are with the values given it is just a paper exercise.
  • Thanks for your advice guys, it puts my mind at rest :)

    3+4 are the executors, 3 is next of kin if that has any bearing.
    Sorry for such a basic question, but exactly what should I put into Google?
    The money was just gifts, no marriages or anything else.
    Is there a time limit on the dispersal of the money? I told 1+2 I'm waiting on a new chequebook but could do bacs if they liked, the reply was "things to discuss, see you wednesday". Am I legally obligated to do it within a certain time frame? (I say 'I' because even though 4 is also executor, the bank account was in my and dad's name but now just mine so I'll be writing their cheques/bacs transfers.)
    It was suggested that 4 could pay 1+2 out of her share, and she agreed. When 1+2 had left I quietly pointed out the realities of that. She could just about afford to I think but that would leave her with practically nothing, and under no circumstances will I feel compelled to do the same. Dad may have done wrong by 1+2, but that's not for me or 4 to compensate for and certainly not at the expense of our family home. 4 was a bit shocked, hopefully waking up a bit. 4 does have close friends and a couple of relatives that she's talking to, she's adamant she wants to be "morally fair" though. ("Morally fair" is 1+2's phrase that 4 has adopted.)
    I suggested she get herself some legal advice. I told her I've been to our family solicitor (who read out the will) and he gave me some advice but suggested I see a specialist, which I'm doing on Friday. She has her own appointment with him, and another with a different specialist. I just don't want 4 to be railroaded by 1+2 and end up paying dearly for it.

    All our communications now between me and 1+2 are through a group text. I'm telling them what me and 4 doing and how things are moving (death certificates dished out, bank sorted etc), the replies are now mono-syllabic and infrequent. 1+2 are in constant contact with 4 through calls and texts. 1+2 are coming back up on Wednesday to "see how we are".
    The last private resident of 10 Downing Street was a Mr Chicken.
  • Has the bank been told of the death? It must be ASAP like tomorrow. No monies should be paid until probate is granted. Even then the two executors have no discretion whatsoever. They must distribute the estate exactly as per the will with no exceptions.Even if some beneficiaries want to pay others money that is their concern and not for the executors to get involved. I see no reason to spend money seeing more solicitors.
  • Yes the bank has been told, 3+4 went in on Thursday morning.
    They have a copy of the death certificate. They took dad's name off the account (it's a joint account) so now just mine is on it. I'm waiting for a new chequebook but I do have a debit card on that account in my name so I can distribute the money.

    Do we have to go through probate? I thought the will was plain enough and the estate small enough that we wouldn't have to..?
    The last private resident of 10 Downing Street was a Mr Chicken.
  • getmore4less
    getmore4less Posts: 46,882
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    Was the joint account funded solely by dad?
  • I'm no expert, but I think you would be wise to initiate probate - whilst the house is indeed outside the estate as far as the will goes, it still forms part of your father's estate for IHT purposes as it was a "gift with reservation" (he still lived there after giving it to you). It would need to be declared. Applying for probate also means that you are seen clearly to be doing things exactly by the book. Have the funeral expenses been paid out of the estate?
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