Help desperately needed

buckbeak1

Hi, my friend is an elderly lady~ her daughter (whom is an accountant) was in charge of all her finances 20 years ago. Her daughter moved £210,000 out of my friends account and split it into 3. She Put £70,000 in her account, her sisters account and her brothers account! This was done approximately 24 years ago to avoid inheritance  tax. Now, my friend remembers her daughter putting it into an ISA because it wasn’t doing so well in the account it was in, then said to her that the best thing to do is split it between the children and if there’s ever anything my friend needs or wants or any house repairs then they’ll take it out the money that was split between them! 

Ok, so when my friend dies her house is worth £350,000 and told the daughter (that is in charge of all her finances) that she wants to leave some money to her grandchildren when she passes away. 

The daughter was furious, said she “wouldn’t do anything for her anymore”.

Last year, My friend needed house repairs~ the daughter said there’s none left to pay for it, when my friend said “how is there none left???” She said she’d been charging her £200 to take her to and from hospital in the past, charged her for making her soup and lunch!!! HER OWN MOTHER. 

She had a KA car and a new kitchen! But nothing that adds up to £210,000.

But now, she’s turned around and said my friend gave them the money!!! My friend has never signed anything. My friend doesn’t even know what bank account it was put into. 

She’s so mad because her children have said it was a trust fund from her dead husband now, and he wanted them to have all that money!! 

The money was left all to his wife only! Solicitors have proof of this. 

This has made her extremely mad because they’re using her dead husband as an excuse! All her children have said my friend agreed for them to receive £70,000 each but £10,000 each was put into a pot to help support my friend (even though it was all her money!!) and they are saying the £30,000 is all gone (£10,000 from 3 children) .

2 years ago my friend  went to hospital having a life threatening operation and the children were too busy to take her to hospital ~ because they were playing golf!!! It’s almost like they’ve had a load of money and because they wasn’t getting the money from the house, they don’t want to know her! The two daughter didn’t send her a Mother’s Day card this year, she’s 85 years old, has stopped her daughter accessing her bank account but is furious because they’ve said the money was from a trust fund left by her dead husband (her husband died in 96 and I think it was 98 that the “trust fund” was created. I think the money was just moved from my friends account into the children’s. What are my friends options? She’s thinking of calling the police but how far back does bank statements go? My friend has never signed anything~ she just trusted her daughter with her money!

The daughter has houses in Spain, America and England, but says she’s got a spreadsheet to show where the £30,000 has gone but says their £60,000 is theirs not hers anymore! Without evidence what can she do? Sorry for going on, but really need some advice! 

LateStarter

I'm terribly sorry to hear this, it sounds horrible. And maybe this isn't the right forum for , but I'll give you some non-financial advice. Your friend can't win this one - if her children aren't willing to pay her expenses or return her money, the only recourse is probably the courts, which will be messy, and with no guarantee of winning. On top of that (and I apologise if I'm being indelicate), even if she wins, is that really how your friend wants to spend whatever time she has left?  Somehow she has to let this go. 

Financially, I can think of one option, which is equity release (you might know it as a reverse mortgage). If done properly, it would provide the cash your friend requires, and whatever is left can be given to the grandchildren. More knowledgeable people could probably help you along that road. 

Best Wishes
LS

Reaper

I admit to being rather confused. You say she gave each child £70,000 and they allocated £10,000 to give back to her. That is not allowed and would fail to protect it from inheritance tax (unless kept secret).

You say the daughter claims "their £60,000 is theirs not hers anymore". That is completely true. She gifted it away and can't suddenly change her mind and demand it back now. It's not her money any more.

Is the problem that your friend has now run out of money and the £10k each child allocated to look after her has run out? I can't comment on the daughter getting through it by charging her mum expenses. It sounds very odd and certainly can't be applied retrospectively. She would have to know in advance it was going to happen for it to be valid. However I suspect there must be 2 sides to that story.

If the mother has run out of money (and certainly £70 + £20k over 24 years could well have been exhausted by now) is there an option to downsize the house and release some funds?

buckbeak1

thank you for the replies... 
no it wasn’t ever “gifted” ...the daughter moved the money and told my friend it was to avoid inheritance tax because obviously £210,000 add 350,000 from the house plus her other savings account money exceeds the limit. 

They are saying she gifted £70,000 each child (3 of them) but they “voluntarily” took £10,000 out of their 70,000 (to leave them 60,000) but her £30,000 is now gone, no statements or receipts! They’ve cut her off completely! She’s got her own money now~ well enough to tide her over  But she is furious that her daughter took £210,000 from her account and is now saying she can’t have it, when it wasn’t even her daughters or her siblings to start with!  My friend was told her daughter was looking after all the money, and whenever she needed anything or wanted anything, she would sort it, but now they’re not talking ~ she won’t help! 

Basically, the daughter was in charge of all her banking, moved the money and split the inheritance before she even died and my friend was told something completely different to what the daughter is now saying! But it is her word against hers I suppose! 

As the daughter is saying it was a trust fund from her dead step father~IF there is a trust fund it must of been made by the daughter as the husband was dead two years before! And there’s witnesses to say it wasn’t, and his will is available saying it was all left to his wife~we have that document! 

xylophone

It seems to me unlikely that your  friend can prove  wrongdoing - the transaction has all the appearance of gifts to her children.

She can make a new will if she wishes and leave her property to her grandchildren.
 She should see her own solicitor concerning this matter.

DairyQueen

Your friend thought she was participating in an IHT avoidance scheme. Her children thought she was gifting them cash. 'She said/they said' now applies. This is a very sad situation and perhaps warns others why they should not handover their cash/property to anyone on whatever pretext, and especially not on the pretext of tax avoidance. 

If your friend was the only beneficiary of her late husband's will then she will have inherited his IHT allowance (£325k) plus, since 2017, the main residence nil rate band (now £175k). Your friend could therefore leave an estate of potentially £1,000,000 without incurring IHT.

I agree with others that, after 24 years and without supporting documentation, it will be very hard to prove that this was anything but a gift.

Billy_B_North

If it wasn’t a gift then it was a loan, and would not avoid inheritance tax.
If it was to avoid inheritance tax, then it had to be an outright gift, given without the right to try to reclaim it either.
If she claimed that it was a gift, but intended for it to actually be a loan then she has attempted a major tax fraud but it’s bitten her on the bottom.

[Deleted User]

Well, isn't this a case that could bite the perpetrators back?
Much as one would hate to see legatees deprived of their inheritance in normal circumstances, there are so many deserving charities these days..

DireEmblem

This is a difficult one, the fact it happened so long ago, it is difficult to prove either way, and it is their own family, I would take the high ground and draw the line where it is.

100% at a minimum update the will, to say that a sum of 210k was gifted x years ago, and that should come out of the three children's split taking into account inflation based on a global equity tracker return(if they get any at all - S&P return would be about 500% - https://www.officialdata.org/us/stocks/s-p-500/1998 ).  The reason I say that, is the money could have been invested and drawn down upon when needed and that's what it could have been worth.

I would also say that all or any remaining funds from the estate in their will should sit in a trust for the children, until a time where it is required to help with a house deposit in their name if possible.  That way you know the money would be put to a good use for the youngest generation of the family when the time comes.

A solicitor is your best bet.

Malthusian

ZingPowZing said:

Well, isn't this a case that could bite the perpetrators back?
Much as one would hate to see legatees deprived of their inheritance in normal circumstances, there are so many deserving charities these days..

If they got £70k each 24 years ago and have forfeited an inheritance of £116k today (possibly less if care costs etc reduce the estate), that's not really a bad deal, when you consider the present value of that £70k after 24 years of growth / inflation.

Of course, they might have got both the £70k and the £116k, but the mother also wants to leave money to the grandchildren, and a bird in the hand and all that.

In itself there is nothing wrong with receiving a gift, spending it and then refusing to hand it back 24 years later. If you think there is then you don't understand what the word "gift" means.

As this all happened 24 years ago there's a lot of "he said, she said" about it.

Making up rubbish about the money coming from a non-existent trust fund or being spent on expenses is reprehensible, but it doesn't turn the original gift into a loan.

Hi, my friend is an elderly lady~ her daughter (whom is an accountant) was in charge of all her finances 20 years ago. Her daughter moved £210,000 out of my friends account and split it into 3. She Put £70,000 in her account, her sisters account and her brothers account! This was done approximately 24 years ago to avoid inheritance  tax.

no it wasn’t ever “gifted” ...the daughter moved the money and told my friend it was to avoid inheritance tax because obviously £210,000 add 350,000 from the house plus her other savings account money exceeds the limit.

In the first paragraph you are saying that the gift of the £210,000 was 4 years before the daughter took over her financial affairs but in the second you are saying that the daughter moved the money?

Attorneys cannot make gifts. However if the donor is still compos mentis there's nothing wrong with them agreeing to a gift of £70,000 to each child and their attorney moving the money on their instruction - even if their attorney is one of the recipients. (Though sensible people would make sure it was clear that it was in fact the donor's own instruction.)

Your posts suggest that your friend is still compos mentis. She can't really argue that the £210k was moved without her consent 24 years after it happened, when she was fully aware the entire time. So the fact that the daughter moved the money isn't really relevant.

The best advice you can give your friend is:

• she needs to forget about the £210k she gave away 24 years ago (unless there's some evidence it was a loan, which seems very unlikely, as that would have been pointless for IHT purposes)
• she needs to see an SRA-regulated solicitor to update her Will, and also appoint new Attorneys since she has fallen out with her current ones (the second part can be DIYed, the first shouldn't)
  
• if she is short of income (including for house repairs, taxi rides to hospital, etc) then it may be time to consider downsizing or, failing that, equity release.