Inheritance Tax Blues

Markedup

My mother is joint executor of her brother in law's will together with her niece and as such they share joint and several liability, on behalf of the estate. Her niece inherited a valuable property which gave rise to a substantial IHT debt Unfortunately, my mother's entire life savings were seized by HMRC this year and a charging order placed on her property for the balance of the debt, because her unemployed niece has moved into the bequeathed property and refuses to sell it and pay HMRC. Does my elderly mother have recourse to claim her savings back from the estate?
She was not a beneficiary and has lost an awful lot of money, she really needs her savings now to help pay for her care.

Many thanks

Working_Mum

This sounds complicated!! You may want to either post or ask a Moderator to move this post to here

https://forums.moneysavingexpert.com/forumdisplay.php?f=217

Hopefully you'll get some replies

pphillips

I'm not sure why HMRC have decided to go after your mother's property (who is an executor) rather than the estate property.
My guess is that the reason for this is because the executors did not realise they had to pay HMRC before distributing the estate to the beneficiaries.
The executors become personally liable if they distribute an estate without paying off the debts.
I think that your mother would be able to claim a contribution or an indemnity from the other executor under the civil liability (contribution) act 1978.
It might be helpful for her to instruct a solicitor to deal with this for her.

Comms69

Markedup wrote: »

My mother is joint executor of her brother in law's will together with her niece and as such they share joint and several liability, on behalf of the estate. - indeed. Her niece inherited a valuable property which gave rise to a substantial IHT debt - IHT is based upon the total value of the estate, not a single inheritance. Unfortunately, my mother's entire life savings were seized by HMRC this year and a charging order placed on her property for the balance of the debt, because her unemployed niece has moved into the bequeathed property and refuses to sell it and pay HMRC. - But why has she not taken legal action? Does my elderly mother have recourse to claim her savings back from the estate? - yes.
She was not a beneficiary and has lost an awful lot of money, she really needs her savings now to help pay for her care.

Many thanks

Really she needs to take legal action now. What happened to the rest of the estate?


And as a lesson - make sure executors are not beneficiaries

unholyangel

As above, I'd move it to the death, funerals & probate board as the regulars there are generally very good with their advice and very knowledgeable.

They'll likely want to know what the value of the estate was, what the value of the property is, whether there were any liabilities (debts) of the estate (other than IHT) and who was listed as a beneficiary and what they were a beneficiary of amongst other things.

Given it sounds like there are large sums involved here for your mother personally, it may be more prudent to obtain paid for professional advice.

TrickyDicky101

Comms69 wrote: »

And as a lesson - make sure executors are not beneficiaries

I disagree. In this particular instance the executor (mother) has failed to execute her duties (for whatever reason) and potential personal liability is the consequence. The lesson to draw is that people should think carefully whether or not to be an executor.

Keep_pedalling

This must have been going on for some considerable time for it to reach this state. Your mother need professional help to deal with both her idiot niece and HMRC, so a solisitor and tax specialist probably required. Start with an appointment with a solicitor. Go with her and if she does not have a lasting poert of attorney in place get the solicitor to draw up an ordinary power of attorney so if nessasary you can step in for her.

Your mothers losses and legal costs should be recoverable from the estate but this is likely to drag on for a considerable time.

getmore4less

Comms69 wrote: »

Really she needs to take legal action now. What happened to the rest of the estate?


And as a lesson - make sure executors are not beneficiaries

Making residual or the substantial beneficiary the executor can be a sensible option as the costs come from their share.

The estate must have been mishandled substantial to have this situation arise..

A time line to get to where we are now may help identify where it went wrong.

With substantial IHT liabilities a grant should not have been available yet and the assets(house) should still belong to the estate.

Markedup

Thank you everyone for your responses, yes this is a complicated case, my mother did not get the legal advice she needed and the whole matter deteriorated and dragged on because her niece made empty promises that she would do the right thing. I'll refer this to a solicitor and refer my query to the death and probate board.
Many thanks

Dizzy_Ditzy

Hi. I will move this thread to the Death and Probate board where hopefully you will get some more, in depth response. Thanks to all for their assistance so far

Keep_pedalling

What is the current situation with probate application?