Delicate will and inheritance issue.

xylophone

and it is absolutely confirmed that I am a one third share owner of the property.

Then your legal position is perfectly clear.

 I would cease personal communication with the  brothers.

 After you have dealt with the formalities of reopening the estate and paying the IHT, if you are still minded to follow your most generous impulse of returning the property to your late partner's family, you might wish to  consider  instructing your solicitor to write to the brothers offering to transfer the share against their agreement to cover any CGT due and to pay an amount representing the IHT that would be due on your estate should you die within seven years of making the gift?

Not_a_clue

I would be very wary of signing ownership over to either of the brothers.  If you really feel that you cannot keep the property gifted to you in your late wifes will then sign it back to the father, possibly with a charge against the property to cover the cost of your legal expenses and any IHT/CGT due, assuming that the father/brothers have no spare cash to pay this up front.  That way you should get that money back when the father/his estate sells the properry.

The danger of you signing it over to the brothers is if the father goes into a care home and the council comes after you for payment of care home fees/recovery of assets due to deliberate deprivation of assets.  That way you lose all around.

Malthusian

Not_a_clue said:

The danger of you signing it over to the brothers is if the father goes into a care home and the council comes after you for payment of care home fees/recovery of assets due to deliberate deprivation of assets.  That way you lose all around.

Not questioning the advice, but can liability to care fees under deliberate deprivation really be transferred to the beneficiary of a deceased?

If the OP's partner was still alive, and the father had gone into care and the council viewed the transfer of the property as deliberate deprivation, then the OP's partner certainly would have been liable for his fees up to the value of her share.

However, I'm not sure that liability carries over to the OP just because the share of the house did. "Debts die with the person" would seem to apply here. Her estate had no liability to the council at the time it was distributed because he wasn't in care.

RAS

I'd also suggest you check the CGT implications of transferring/ selling the property as it's not your home.

Manxman_in_exile

RAS said:

I'd also suggest you check the CGT implications of transferring/ selling the property as it's not your home.

If I were the OP I wouldn't worry about that.  I'd just point out it was another potential cost that the "in-laws" need to consider if they want the property back!

Not_a_clue

Malthusian - you may well be right, I'm no legal expert.  I was suggesting caution just in case but probably did not make that clear.  I have a vague memory of seeing something whereby an issue arose when somebody sold on a property within the period in which councils can seek to recover assets and they sought to recover from the new owner, but that is a different issue.

There is quite a good general article here, but not specific to the details of this case

https://www.aprilking.co.uk/blog/deprivation-of-assets-guide/

"However, any gift can be set aside with no time limits (without bankruptcy) under the Insolvency Act if the Court believes that the transfer was made for the purpose of putting assets beyond the reach of a potential creditor or otherwise prejudicing the creditor’s interests."

I've no idea if this could be done against the estate of the late wife, maybe not.

On the subject of it taking six/seven years for the father to raise the issue I wonder if it was to do with confusion in respect of the general 6 year debt recovery rule, or the 7 year exemption from inheritance tax rules.

xylophone

On the subject of it taking six/seven years for the father to raise the issue I wonder if it was to do with confusion in respect of the general 6 year debt recovery rule, or the 7 year exemption from inheritance tax rules.

OP states

Some 6 or 7 years ago, my partner’s father signed his property over to the ownership of his three children, those bring my partner and her two brothers. This was done to avoid the house potentially being sold for care home fees and to avoid inheritance tax. 

Now,though, on ‘tidying his affairs’ her father has realised that I now owned a third of the house and as he sees it, that ‘was not the plan’.

stephenbalmer

xylophone said:

On the subject of it taking six/seven years for the father to raise the issue I wonder if it was to do with confusion in respect of the general 6 year debt recovery rule, or the 7 year exemption from inheritance tax rules.

OP states

Some 6 or 7 years ago, my partner’s father signed his property over to the ownership of his three children, those bring my partner and her two brothers. This was done to avoid the house potentially being sold for care home fees and to avoid inheritance tax. 

Now,though, on ‘tidying his affairs’ her father has realised that I now owned a third of the house and as he sees it, that ‘was not the plan’.

Yes, thanks Xylophone, as you correctly outline, this has not been a 6/7 year delay in notification but rather was a 2 year delay between her dying and the family letting me know about the dad's house arrangement.

Let me update the situation a little also as more details have become clear on my solicitor looking into this matter.

The actual transfer of ownership was in 2010, so 10 years ago, not the 6/7 as i was initially informed.

The mentioned delay which took place was that of telling me about this arrangement - my partner passed in March 2018 and in the ensuing month or so after that date, I legally wound up her estate; a relatively easy task as i was executor and beneficiary and she had created a detailed inventory of her assets.

However, I guess she completely forgot about the IHT/Care cost avoidance strategy which her father/and his solicitor had created in 2010 by this 'gifting' of his home to his three children in equal one third shares of the property, and because of this, I did not include it in the handling of her estate in June 2018.

Then, in July 2020, I got an 'out of the blue' phone call from one brother saying that dad was 'finalising his affairs' and there was a wee issue with the house and would I be ok if it stayed in their family. That was all the information i was told and that was as formally as it was put to me, and whilst wondering why they would even ask, clearly i replied that i had no issue at all with that. I suspect they were attempting to use that as a tactic to re-claim this third share, but obviously in order to make that formally happen, they had to engage a solicitor who was duty bound to at least lay out more fully the detail of their request and the ramifications, which clearly changed the complexion of the request.

So there we are, thanks to all of you for your help. I know a lot more now about a topic i never wanted, needed nor played any part in creating, but the upshot is that it is going to end up in a bad place no matter what, the lure of hard cash will always over relegate relatinships, friendships and even pleasantries into second place. I have lost my partner and now I have lost her family and our Godson, of which she would be extremely sad.

xylophone

 the lure of hard cash will always over relegate relatinships, friendships and even pleasantries into second place. I have lost my partner and now I have lost her family and our Godson, of which she would be extremely sad.

It seems to me that this still might be  brought to a happier conclusion (since you are willing to be generous) by having your solicitor offer a transfer back to the family provided that your costs are covered as previously discussed?

And incidentally, is the father still living in the property and not paying a market rent?

stephenbalmer

It seems to me that this still might be  brought to a happier conclusion (since you are willing to be generous) by having your solicitor offer a transfer back to the family provided that your costs are covered as previously discussed?

That is likely where it will end up, but even that will be to the destruction of any relations - the feeling will be, ‘how dare I charge an old, frail man to get his own house back’.

And incidentally, is the father still living in the property and not paying a market rent?

No, he does not and never has paid rent, leaving this whole scam open to ‘Gift with Reservation’ claim should council care have been needed, and he very much just considers it ‘his house’.

The foundation of issue here seems to be a very simplistic and one-sided perspective of the situation - from their side, this was always the ‘Family home’ and the transfer thing was ‘just a wee trick’ to beat the taxman, it is still really still his house and I should give it back.’ It has even been said that my involving solicitors is ‘going to stress an old man to his grave’ and ‘this was not what he wants and it’s his house’. It is an awful situation and I am destroyed.