Joint accounts and IHT

LittleAlfie

Apologies if this has been asked before! I have been lumbered with doing the IHT and Probate forms  for my late mother-in-law and an argument has arisen over the treatment of a substantial deposit account set up about 20 years ago in the joint names of my wife, her sister and their mother (who provided the capital). My wife and her sister are executors and sole beneficiaries under the Will. When showed mother-in-law's death cert. the bank simply removed her name from the account and told the sisters that it was all theirs now and would not need to be mentioned for IHT. I argue that one-third was hers at death and should be declared. It's probably going to be academic (estate less than £325K) anyway but I don't want my wife to be making a false declaration if they insist on my omitting it from the form. Am I right? 

getmore4less

The key here is what was the intent when the account was set up.

If the money was supplied and the understanding was the full amount was for the MIL use and the joint was for convenience.
then the full amount shouldbe declared .

if the acount was set up and the intention was the kids were getting gifted  then 1/3rd can be put down.
If it had been within 7 years the other 2/3 would have been a PET.