Spouses claim on estate?

NordicNoir

WYSPECIAL wrote: »

....if he gave it to his wife it is hers and now belongs to the sole beneficiary,. It is up to the beneficiary to decide what to do.

Yes, but by the fact that FIL is now saying that it is his, he is suggesting that he never gave it to his wife, she was merely looking after it for him.

So... if the FIL feels that he is owed money by his wife, he can make a claim against the estate. The estate then needs to see if his claim is valid. It really is that simple!

I agree totally with you that the only one who can make the decision is the sole beneficiary (as per my previous posts).

NordicNoir

Yorkshireman99 wrote: »

You cannot give a gift with reservation

It really would be quite useful if you could point us to a link to the law that states this?

It is rather odd as HMRC have very specific rules about the effects of "gifts with reservation" and inheritance tax. Rather strange that HMRC have it so wrong too?

Yorkshireman99

I mean in respect of money given in the way stated. HMR&C GWRs are where the donor continues to enjoy the benefit of the property gifted. In the case under discussion there is no such benefit reserved.

NordicNoir

Yorkshireman99 wrote: »

I mean in respect of money given in the way stated. HMR&C GWRs are where the donor continues to enjoy the benefit of the property gifted. In the case under discussion there is no such benefit reserved.

Other than the fact that the FIL expects to have the principal returned to him?

Keep_pedalling

I think we really need a bit more background here. Although I don't see how a challenge based on the fact that he believes this is really his money could work, but the fact that a husband is entirely left out of a will could lead to a challenge on the validity of the will. For example if a couple were separated and waiting on a divorce and therefore the legal splitting of assets had not occurred and the deceased had gifted assets that the survivor would likely to have received in a divorce then there would likely to be grounds for a legal challenge.

If the OPs wife feels that her father has not been treated fairly, or she does not want to risk a expensive legal challenge (however remote) then she could simplify matters by gifting the money to him or you go down the route of drawing up a deed of variation, which achieves the same thing but avoids that sum of money ever being part of her estate if IHT is an issue.

Bearing in mind that getting things wrong as an executor can lead to serious consequences, so if in any doubt take legal advice.

SeniorSam

An executor has a legal responsibility to act according to the Will. If a beneficiary of that Will wishes to then gift money to another person it is up to them. Be careful in not making this gift yourself as to could be held fully responsible for that sum by other beneficiaries.

Sam

Yorkshireman99

MichelleUK wrote: »

Other than the fact that the FIL expects to have the principal returned to him?

That cannot happen as it would contravene the ISA rules. What ever the donor may have intended it had no legal effect. The money was a gift pure and simple. The donor cannot now circumvent the rules. If he goes to court on this point he wil inevitably fail and end up paying all the costs. Perhaps if the OP makes him aware of the reality he may see sense.

securityguy

"That cannot happen as it would contravene the ISA rules."

In which case, there might potentially be income tax payable on the interest as the ISA status of the money would be invalid. That does not mean that the beneficial ownership is affected by the contravention.

It is true to say that if A gets B to open an ISA on A's behalf in order to evade income tax that would otherwise be payable, the ISA is invalid and income tax is payable on interest. It is technically true, although in practice no prosecution would ever ensue, that A and B have potentially committed an offence. What hasn't happened is that the money hasn't become B's.

AHWBeverley

Apologies for not being around to clarify things whilst this discussion continued.


MiL's will left everything to my wife.
FiL is not in any financial need, there were a couple of joint accounts and joint life policies which obviously paid directly to FiL
FiL has a decent pension and other savings
I do believe FiL when he says the principal sum was his from his retirement
My wife does not want to deal with most of this at the moment which is why MiL appointed me as sole Executor


I will wait until I have collected all monies and have all information to hand before acting on this but obviously I do need to have the conversation with OH


Thanks for your inputs so far, I do appreciate it as I have never done this sort of thing before and needed a sense check more than anything else.

macca1974

personally, I would get the estate sorted as per the will and then once everything had been dealt with pay over the ISA money to the FIL on the basis that it was his money and I wouldn't want to start any resentment in the family. It seems to me that you wife has no legal obligation to do this because unless there was some documentation / loan agreement in place (which you wouldn't expect between husband and wife), then it should go to your wife. However, i'd personally feel really uncomfortable taking the money in that situation and it would more than likely cause some major aggravations with the family at what must be a really difficult time for everyone.

This assumes that you don't have any personal issues re benefits / bankruptcy etc where doing this could be seen as a deprivation of assets.