Probate

Daveckj

Hi

wondering if anyone can advise here as we have had differing advice from different solicitors?

The short version of this is that we are trying to establish the extent of my father in laws estate as his cash funds and investments have been left to his children and my children. 18 months prior to his death my mother in law had her name added to his bank account in order to pay for household expenses etc (basically help him with his finances apparently).

The money in this account was all his and she has never contributed to the account in any way. She maintains that solicitors have informed her she only needs to declare 50% of the balance at my father in laws death as the rest is hers. My solicitor has told me that as she has never contributed to the account all the money in it is my father in laws and would constitute a gift given to her at the point at which she was added to the account (minus anything that was spent for the direct benefit of my father in law.) We would like to know the balance at the stage she was added because we believe (as my father in law was an avid saver) she moved a large sum of his savings into her own personal account.

Which amount should be declared?

Many thanks

DJ

Mojisola

Was it a joint account or did she just have authority to use the account?

getmore4less

Is the purpose for tax or distribution or both?

How big is the estate?

Who is the executor?

I asume these people FIL/MIL were married.

madbadrob

As a married couple she would be entitled to a share of his worldly goods as she would if they ever divorced. If she moved the money whilst he was still alive and was compus mentis then she has done nothing wrong. I personally believe and it may be an incorrect belief that they have both gotten it wrong.

As an example after my marriage ended my now ex wife ran up a large credit card bill ( I had not cancelled it) and because that was in my name I had to pay it. When we finally divorced and shared what little we had I tried to make a claim for the CC bill to be accounted for and in court was told that because I knew she had access and a right to use the card I had no claim. I would think the same applies here also

Rob

getmore4less

madbadrob wrote: »

As a married couple she would be entitled to a share of his worldly goods as she would if they ever divorced. If she moved the money whilst he was still alive and was compus mentis then she has done nothing wrong. I personally believe and it may be an incorrect belief that they have both gotten it wrong.

As an example after my marriage ended my now ex wife ran up a large credit card bill ( I had not cancelled it) and because that was in my name I had to pay it. When we finally divorced and shared what little we had I tried to make a claim for the CC bill to be accounted for and in court was told that because I knew she had access and a right to use the card I had no claim. I would think the same applies here also

Rob

I think they are potentialy very different.

The CC you are 100% responsible for the debt even if you have other cardholders, as it accured after the marriage ended this is not a marrital asset/debt.

In the case of joint accounts(allthough that has not been clarified it was joint) then you would need to establish that there was something other than joint legal and benifitial ownership allthough debts would be joint(unlike the cc), and if it is joint the full contents may become the property of the second account holder through survorship.

If they were married this would have no IHT implications if not then the account would need to be included in the etstate value for IHT purposesas the change was within 7 years so any gift of 1/2 would still be include.

All a bit speculative without further details.

Daveckj

getmore4less wrote: »

I think they are potentialy very different.

The CC you are 100% responsible for the debt even if you have other cardholders, as it accured after the marriage ended this is not a marrital asset/debt.

In the case of joint accounts(allthough that has not been clarified it was joint) then you would need to establish that there was something other than joint legal and benifitial ownership allthough debts would be joint(unlike the cc), and if it is joint the full contents may become the property of the second account holder through survorship.

If they were married this would have no IHT implications if not then the account would need to be included in the etstate value for IHT purposesas the change was within 7 years so any gift of 1/2 would still be include.

All a bit speculative without further details.

Sorry been at the funeral today. To try and answer some of the questions. She was added to the account as a joint account holder. They were married and therefore we agree there would be no IHT implication but we wanted to know whether the opening balance at her addition should be declared for purposes of my father in laws estate (additionally we would then know what his savings were at this point).

The point regarding why she was added has now become a little muddy. At the time my mother in law originally claimed my father in law was no longer capable, due to his dementia,of conducting his affairs and that she needed access to this money to pay for household expenditure etc. She never had a medical note to say he was demented to the point of being incapable rather she marched him to the bank and effectively bullied him into signing her onto his account (as well as making him close his savings account and transfering that money into the newly established joint account). However, she is now claiming that he voluntarily signed her up to the account and was happy to do so.

I am getting the impression she has outflanked us here.

DJ

Torry_Quine

As it's a joint account then the money becomes hers. Sorry if that's not what you want to hear.

RAS

Daveckj wrote: »

The point regarding why she was added has now become a little muddy. At the time my mother in law originally claimed my father in law was no longer capable, due to his dementia,of conducting his affairs and that she needed access to this money to pay for household expenditure etc. She never had a medical note to say he was demented to the point of being incapable rather she marched him to the bank and effectively bullied him into signing her onto his account (as well as making him close his savings account and transfering that money into the newly established joint account). However, she is now claiming that he voluntarily signed her up to the account and was happy to do so.

I am getting the impression she has outflanked us here.

DJ

If this was the case (bold) then what she did was wrong. If someone is no longer capable, then she needed to get his mental state proeprly assesweed under the Mental Capacity Act and gain a power of attorney http://www.justice.gov.uk/about/opg.

However as his spouse if he did not make adequate provision for her in his will, she could claim support from the estate.

Is MIL the mother of the children to whom money was left (your OH included).

getmore4less

The problem is that she has probably been advised that the action would have been illegal if he was not capable she would have needed a LPA she would have had to go to the public guardian to get it.

Estabishing the account details going back will be straightforward for the executor they just ask for the statements so they can look through for any gifts that need to be included on the IHT forms.

Once you have the numbers and can establish the cash flow you can then decide if you want to chase down any assets that appear to have been sidelined.

I suspect as it is a joint account with a spouse may not be that easy you probably need to do this through the executor/solicitor.

Is she claiming what's left through survivorship, it would appear not if her solicitor is letting you have 1/2, she might be able to keep the lot.

There are 2 distinct sets of values one for tax and one for distribution these are often different.

I can't remember the details of the IHT forms but there is probably somewhere on the forms to show the gift(if thats what it becomes) even though it becomes exempt as it is a spouse.

securityguy

RAS wrote: »

If this was the case (bold) then what she did was wrong. If someone is no longer capable, then she needed to get his mental state proeprly assesweed under the Mental Capacity Act and gain a power of attorney

That's right in principle.

But I suspect that the number of people who are having their finances managed under a power of attorney while their spouse is still alive is small. In almost every case, particularly today when most couples have most of their assets in joint names, it's just not necessary. The usual scenario for a PoA is in favour of an elderly person's children in case they're unable to cope, and I doubt many people have registered a PoA for their father while their father's spouse is still alive. It would be interesting to know for sure how common this is, and how it works out. It would also be interesting to know how many elderly couples have PoAs drafted in favour of each other, rather than their children.

The argument that "if your spouse becomes incompetent, you should not use joint assets jointly, but rather should get a PoA from the court of protection" doesn't seem to match lived experience. Are there _really_ cases of wives managing their husband's affairs under a full CoP PoA? Is the CoP set up to do this?

(Obviously, by "spouse" I mean "co-resident, compos mentis, etc")

ETA: of course, there will be cases when "bad" spouses ransack the joint assets while their spouse lives on bread and water in the attic. I'm not sure a PoA is much protection against this. I would imagine there would be rather more cases of a spouse using the joint assets to provide for their partner, while children anxious for inheritances tut at the extravagance. A PoA would help then, but not in a good way.

getmore4less

securityguy wrote: »

That's right in principle.

But I suspect that the number of people who are having their finances managed under a power of attorney while their spouse is still alive is small. In almost every case, particular today when most couples have most of their assets in joint names, it's just not necessary.

I can see where you are coming from but I think joint assets are usable without POA the intention is there(they are joint) that the assets are shared and survivorship there is no question of the final recipient(unless there is a clear indication benifitial interest lies elsewhere)

The problem arises when they both become incapable, LPA with spouse and kids as back proably does the job

The issue here is the joint status was established at questionable time particularly as the MIL has changed her story.