Inheritance Issue

xylophone

I wondered whether you might write to each of your nephews along  the following lines?

Dear John

As you know, your Great Aunt Mary died in January - Uncle Tom and I are executors of her will.
Had your mother  survived our aunt, she would have been entitled to a one third share of the estate.
As it is, the bequest failed.

However, Tom and I (as the  remaining beneficiaries), are agreed that we would like you and your brother Michael  to benefit from the will, particularly as Mary was so fond of  your mother. 

We have therefore executed a Deed of Variation of the will.

I enclose a copy of the Deed and a cheque for £20,000.

It sets out the legal position and should silence the (unjustified) carping?

Keep_pedalling

Velena said:

Thank you all very much for taking the time to reply, it's most reassuring that all your replies are in agreement.  My nephews are not minors, and the estate is not huge (around 120k in total so my sister's share would have been 40k which we plan to share equally between them).  If the money were to be split equally between my brother and I, for us then to pass on to our nephews as a gift, that could cause complications as I am tax resident in Spain and that would mean the recipient of any money from me would be liable for Spanish gift tax, so I would rather it was paid direct to them from the estate.  If my brother in law or nephews want to get really nasty about it, my brother and I may well tell them that in view of their attitude we have changed our minds and will act in accordance with the law, but I hope it won't come to that.  I shall also be telling them that if they plan to start taking an interest in what will happen to my money when I die (I have no children to leave it to) they should not waste their time!

I would not punish them because of their father’s attitude. If they are happy to accept your kind offer then fine, if they think they deserve more then they get nothing.

Keep_pedalling

maman said:

Keep_pedalling said:

maman said:

In view of what others have added, I'd not complicate things. Split the estate between you and your brother and then give (what will be) your own money to your nephews. If they are under 18, you might want to wait until they are of age before you give it to them. 

That could have IHT implications, if the OP wants the children to receive an inheritance then they should go down the DoV route. 

You could be right but it will depend on the size of the estate. I was assuming (possibly wrongly) that it wasn't huge. 

The tax issue with gifts is not the size of the the deceased estate but the size of the OPs estate as any gift from that stays there for 7 years. 

maman

Of course, so many things to consider. I should stop making assumptions of relative ages etc. 

TBagpuss

Yes, in those circumstances, and given that your nephews are adults, a deed of variation is the way to go. 

It's odd that your sister's husband thinks he would have any involvement at all, as as his wife died before your aunt, nothing would have gone to her estate or to him in any event, so it was always going to be either going to you and your other sibling, or to the adult children.

The payments of £400 *might* have meant that your sister might have been able to make an Inheritance Act claim on her aunt's estate had the aunt died first, if she was financially dependent and could show that the aunt failed to make reasonable provision for her, but clearly she wasn't financially dependent when your aunt died, and it doesn't sound as though he is claiming that he was a dependent. 

Velena

TBagpuss said:

Yes, in those circumstances, and given that your nephews are adults, a deed of variation is the way to go. 

It's odd that your sister's husband thinks he would have any involvement at all, as as his wife died before your aunt, nothing would have gone to her estate or to him in any event, so it was always going to be either going to you and your other sibling, or to the adult children.

The payments of £400 *might* have meant that your sister might have been able to make an Inheritance Act claim on her aunt's estate had the aunt died first, if she was financially dependent and could show that the aunt failed to make reasonable provision for her, but clearly she wasn't financially dependent when your aunt died, and it doesn't sound as though he is claiming that he was a dependent. 

Oh, my sister's husband is a real piece of work.  He had a go at me  about them being entitled to a larger share of my aunt's estate not 48 hours after my sister had been knocked down and killed whilst they were on holiday abroad and I had flown there to try to help him and their sons deal with getting her body repatriated (they had travelled without insurance), at their request and no little expense to myself.   My aunt was still alive, of course, at that stage and I found it extremely distasteful that he should be so focussed about money in those circumstances, and told him I didn't know the terms of my aunt's Will (which I didn't at that time) and had no intention of asking her about it.  He also had a go at my brother about it after he got home from that trip, whilst my brother was trying to help with arranging the funeral.  I think he has instilled in my nephews the belief that they have an absolute entitlement to a share of the estate, so it is likely to come as something of a shock to them that they do not.  I doubt whether we will be given any credit for giving them their mother's share of the estate and can see it leading to complete estrangement from that branch of the family, which is a shame but so be it.  When he raised the subject with me I told him (in the presence of my nephews) that years ago both my sister and my aunt had told me that my aunt had given my sister a quite substantial amount of money to put into a bank account in my sister's name, as my aunt was worried it would affect her entitlement to Pension Credit.  He lied to my face and said no such account had ever existed, but amongst my aunt's papers my brother found a bank statement relating to an account in my sister's name (but with my aunt's name written on it in my sister's handwriting) with a balance of 18k in it.  We have no idea what happened to that money.  He is also likely to flatly deny my sister ever received that 400 pounds a month from my aunt, but my aunt told my brother after my sister's death that that had been the arrangement and tried to carry it on with my brother, but he refused to take the money.  We have her bank statements showing that immediately after my sister's death my aunt's monthly spending changed from at least 800 pounds a month to no more than 300 pounds a month, she never left her house for at least 5 years before her death at the age of 95 and spent practically nothing except on food and household bills which were small.

Velena

Well, the fun has started just as I thought it would.  My brother (the executor) transferred the money we are gifting them to our nephews yesterday, and today is already being bombarded with text messages from the elder nephew complaining and demanding a breakdown of how much the estate amounted to and what expenditure there has been (which of course they are not entitled to as they were not named as beneficiaries in the Will).  I had drafted a letter which I thought should be sent to them when the money was transferred, setting out their legal position and the facts relating to the money their mother had already received from our aunt prior to her death, but my brother didn't think it was a good idea to send it as he thought it would be too harsh and wanted to do things more "informally".  I think he's realising now that the more formal route is going to have to be taken.

Velena

I feel rather guilty as I stepped down as an executor because I live abroad and it would have been more difficult for me to do it from here, and my sister who was named as the other executor had of course died, so my brother agreed to step in.  I don''t want him to be catching all the flak now.

xylophone

I think he's realising now that the more formal route is going to have to be taken.

I would have thought that a letter and cheque to each would have been wise in the circumstances.

I don't think that the regular gifts to their mother before your aunt died are relevant to her will.

As the money has now been transferred to your nephews,  perhaps  your brother might write along the lines of

Dear John,

I am pleased to hear that the money has arrived in your account.  I would like to explain the legal position regarding Aunt Mary's will.  As your mother died before our aunt, the bequest to her in our aunt's will failed.

However,  Velena and I (as the  surviving beneficiaries), agreed that we would like you and your brother Michael  to benefit from what would have been your mother's share.

We  have executed a Deed of Variation of the will - I enclose a copy for your records.

And just as a point of information, only the residuary beneficiaries of a will are entitled to a copy of the accounts.

Kindest regards
Tom.

maman

I think the letter is good, although I might say' 'we'd like to gift you what had been your mother's share' (rather than benefit from). Then if they want to look the gift horses in the mouth, so to speak, they can. 😉