Delicate will and inheritance issue.

Savvy_Sue

stephenbalmer said:

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.

I am so sorry you find yourself in this situation. 

However, I wonder whether 'the old man' needs to be involved in this situation at all, and I would perhaps make that point to his sons. 

The legal situation is that he handed his house over. Unless they are planning to transfer ownership back to him (which sounds unlikely) then it is only the sons who need to be involved, and if THEY wish to avoid giving him any stress then they could just reassure him that you are willing to resolve the situation, and that they are taking care of it. 

And I would as far as possible deal with them at arms' length, ie through a solicitor, and if not through a solicitor then at least along the lines of 'my solicitor has advised ...' 

xylophone

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.

How extremely sad.

But I am afraid that the simple fact is that it ceased to be his house the moment that he signed it over to his children.

I am at a loss to understand how his solicitor failed to explain  either the gift with reservation rules in terms of the plan to avoid IHT or the situation in respect of deliberate deprivation of assets (in view of his declared intention of avoiding care home fees should such care ever be needed).

The next simple fact is that if his daughter had a beneficial interest in the property (as appears to be the case), then this was an asset of her estate - if her will simply left "all the assets of which I die possessed to my partner Stephen Balmer" then you have legally inherited that beneficial interest.

You are not seeking to make any money out of the transfer back to the  brothers ( or even to your godson in trust?)  just to have your legal expenses / CGT / any IHT that might arise if you die within seven years covered by them.

This is perfectly legitimate and I would hope that your solicitor would stress your generosity in making this offer.

Best wishes - I hope it will work out better than you fear in the end.

warby68

I really feel for you.
Their scheme has backfired in a tragic way and you have been unfairly dragged into it and somehow made the villain.
If asked outright would they actually consider it fair and just that you pay the inheritance tax and legal costs of sorting it out on top of being perfectly willing to give it back?  Are you considered wealthy enough to stand the cost of their mess? They seem very blinkered or perhaps the bluster is to avoid the need for someone to admit they made a big mistake.
Obviously only you know the family dynamics but often the offspring (and potential beneficiaries) have different agendas from their parent. Is it worth you having a chat with him alone to see if he actually understands the significant financial implications for you and how much you have been disadvantaged by their 'wee trick'. It really isn't as simple as just giving it back. 
I sincerely hope at least the dad can find a more reasonable viewpoint. I'm tempted to suggest an old-fashioned letter if you are still open to reconciliation.

Manxman_in_exile

Savvy_Sue said:

stephenbalmer said:

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.

...
However, I wonder whether 'the old man' needs to be involved in this situation at all, and I would perhaps make that point to his sons. 

The legal situation is that he handed his house over. Unless they are planning to transfer ownership back to him (which sounds unlikely) then it is only the sons who need to be involved, and if THEY wish to avoid giving him any stress then they could just reassure him that you are willing to resolve the situation, and that they are taking care of it. 

And I would as far as possible deal with them at arms' length, ie through a solicitor, and if not through a solicitor then at least along the lines of 'my solicitor has advised ...' 

That would be my view.  If you aren't in direct contact with the father then it's his sons who are upsetting him, not you.

xylophone said:

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.

...

I am at a loss to understand how his solicitor failed to explain  either the gift with reservation rules in terms of the plan to avoid IHT or the situation in respect of deliberate deprivation of assets (in view of his declared intention of avoiding care home fees should such care ever be needed).

...

I'd advise the father and his two sons to sue his solicitor who suggested this idea without ensuring safeguards were in place.

Good for you for wanting to do the right thing.  A great pity that the people who would benefit are too greedy and stupid to appreciate it.

Keep_pedalling

I doubt whether the solicitor came up with this scheme. If they were simply payed to do a bit of conveyancing then they have done nothing wrong.  

getmore4less

Although not relevant to the legal situation is there some other thinking going on here by the brother/father

The house share take the estate into IHT, on the assumption this is a single allowance and no transferable from a predeceased spouse that's a £325k threshold 

I don't recall the split or the size of the IHT bill being mentioned but is there an element that the  inheritance(pre house value) was potentially "family" and more than enough to cover the IHT and costs?

Malthusian

stephenbalmer said:

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.

My initial reaction was "how do you forget that your dad gave you a third of a house?" but on second thoughts, it is understandable that she didn't really understand what her dad was doing. Bearing in mind he didn't either.

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.

Lulz. As legal strategies go, he might as well have rung you up and said "thepersonwhoagreestogiveushisshareofmydadshouseforfreesayswhat?"

brewthebear

So they dont want you to be part of the family anymore since your wife passed. I take it they were ok you being part of the family prior. Your still family now so there behavior is shocking. Greed rears its ugly head...

Keep_pedalling

brewthebear said:

So they dont want you to be part of the family anymore since your wife passed. I take it they were ok you being part of the family prior. Your still family now so there behavior is shocking. Greed rears its ugly head...

The OP was not married. If he had been there would be no IHT issues.

stephenbalmer

Hi again all. Sorry to raise this thread again, but i wanted to do a few things after the previous activity on this thread and matter.

Firstly i wanted to thank each and every one of you who provided insight, guidance and comments on this very difficult situation in which i have found myself, through no fault or doing of my own. I really do appreciate your input to a subject which I previously knew very little indeed.

Secondly, I wanted to update that the process continues, and after literally tens of hour of my time in calls, letters, e-mails, document searches, etc. in pulling everything together once again, including having formal valuations of every item of her estate undertaken, at my cost, I am almost ready to submit the completed documentation to the Sheriff Court for Confirmation. Hopefully this will closes the matter with HMRC once again and this time including the one third share of a house i did not know about previously. Whatever is due will be paid, i did not previously and am not now attempting to avoid any due payments.

Finally though, I would like to ask your input once more in this matter; once the estate is confirmed by the court, i will be in at least legal position to ‘give the share of the house’ back to the father and his sons, as is his request. As i explained previously though, it is still not seen as a request, but rather is considered as being just what i should do as it is their family house and any consideration that i keep my share of the house does not come into their thinking.

If i do hand over the share of the house, i would like to make them sign a letter or document, where they are made to acknowledge that i am NOT duty bound to be doing so as they think I am, and that it is with extreme generosity that I do. I also want to include in this document that the costs that i have bourne to re-address this estate settlement including IHT are covered by them also. How should I do this, and what else might i include to ram home that they are very, very lucky that I put more weight on my heart than my wallet, where they appear to be more concerned with just maximising their inheritance.

Thanks once again.