Intestacy Rules

onetogo

Thanks for your input, that was my conclusion as well. My SIL did gift some money to her daughter when the Will was settled in 2018 and my wife, as executor of her late mothers Will, distributed the £10,000 to each of the grandchildren on the sale of the property, as per my late MIL wishes.

msb1234

Having read through this again, it’s quite confusing. 

If the property was left as TIC to 2 beneficiaries, until the partner died, where did the money come from to pay the granddaughter when her father died? The estate could not have been settled until the partner died under the terms of the will, so I’m guessing that an approximate value of the property at the time your BIL died was used and cash was given to his daughter. But the house wasn’t sold. 

So, once the house was sold, any increase in value is possibly subject to CGT calculated from the date of your MILs death up to the date the house was sold, possible CGT should have been paid when BIL died on his share of the property if it had increased in value, and then again by SIL from the time she inherited her husband’s share up to when he died.
The 50% share of the property  at the point of sale should be used to calculate how much money the SIL and her daughter receive, not the value of the property at the time they inherited it.

JGB1955

msb1234 said:

If the property was left as TIC to 2 beneficiaries, until the partner died, where did the money come from to pay the granddaughter when her father died?  From his other assets?

The estate could not have been settled until the partner died under the terms of the will, so I’m guessing that an approximate value of the property at the time your BIL died was used and cash was given to his daughter. But the house wasn’t sold. The house would have been valued at BIL's death and that sum used for the administration of his estate.

So, once the house was sold, any increase in value is possibly subject to CGT calculated from the date of your MILs death up to the date the house was sold  Yes, possible CGT should have been paid when BIL died on his share of the property if it had increased in value, No - BILs liability to pay CGT died with him and then again by SIL from the time she inherited her husband’s share up to when he died. the house was sold.

The 50% share of the property  at the point of sale should be used to calculate how much money the SIL and her daughter receive, not the value of the property at the time they inherited it.  I disagree - BILs estate was dealt with in full in 2018.

My interpretation of events shown in bold.

Twixty3

The estates were settled both times . When the mother died  the ownership became joint with the posters wife her brother and mother in laws partner remained there until he died.  The property was left to brother and sister with a request that her partner lived there providing f he paid the bills and maintained the property.  This sounds like it was not an instruction  but a request and they could have turfed him out if he didn’t pay the bills etc. 

Her will would have been worded differently if they were not to own it until after he died surely ?  She left it to her son and daughter NOT to partner.  

The brother in law’s wife is now the legal joint owner ( tenants in common) after he died so the share belongs to her and she benefits from any increase as it no longer belongs to the brother in law and cannot now form part of his estate. 

It seems pretty clear cut to me unless I’m missing something.  

msb1234

So the daughter was bought out when her father died based on the value of the house at the time of his death? 
I believe a solicitor could argue the case for her share increasing in line with sold price of the house. I think if this had been my daughter I would have given her an additional sum based on the sold price. 

Keep_pedalling

msb1234 said:

So the daughter was bought out when her father died based on the value of the house at the time of his death? 
I believe a solicitor could argue the case for her share increasing in line with sold price of the house. 

Nonsense, the daughter received her share of the estate when it was wound up. The house went to two other beneficiaries and ceased to be part of the estate, she has no second bite at the cherry she could easily have spent her share as part of a deposit on her own house or invested it, are the other beneficiaries entitled to the gain she made on those? 

theoretica

Legally, I expect the daughter had her entitlement when her father died. Morally, one might confirm why her share was not a portion of the house - she might well have preferred cash at the time to an investment for later and if she did not already own property, keeping her first time buyer status could have been valuable.

msb1234

Keep_pedalling said:

msb1234 said:

So the daughter was bought out when her father died based on the value of the house at the time of his death? 
I believe a solicitor could argue the case for her share increasing in line with sold price of the house. 

Nonsense, the daughter received her share of the estate when it was wound up. The house went to two other beneficiaries and ceased to be part of the estate, she has no second bite at the cherry she could easily have spent her share as part of a deposit on her own house or invested it, are the other beneficiaries entitled to the gain she made on those? 

Surely the estate was only wound up completely when the original owner’s partner died, enabling the house to be sold, though? The daughter’s father inherited a share in a property not a fixed amount. When he died, his estate still owned a % of a property, again not a fixed sum. If there had not been any cash in the estate, she would not have been able to be paid any money until such point as the house was eventually sold.

theoretica

msb1234 said:

Keep_pedalling said:

msb1234 said:

So the daughter was bought out when her father died based on the value of the house at the time of his death? 
I believe a solicitor could argue the case for her share increasing in line with sold price of the house. 

Nonsense, the daughter received her share of the estate when it was wound up. The house went to two other beneficiaries and ceased to be part of the estate, she has no second bite at the cherry she could easily have spent her share as part of a deposit on her own house or invested it, are the other beneficiaries entitled to the gain she made on those? 

Surely the estate was only wound up completely when the original owner’s partner died, enabling the house to be sold, though? The daughter’s father inherited a share in a property not a fixed amount. When he died, his estate still owned a % of a property, again not a fixed sum. If there had not been any cash in the estate, she would not have been able to be paid any money until such point as the house was eventually sold.

It is completely standard for estates to be wound up and finalised with some items passing as goods or land rather than money - every heirloom or ancestral home that has been in the family for generations...  It would have been more complicated if the house had been legally in a trust - rather than the owners voluntarily letting the original owner's  partner live there, but it apparently it wasn't in trust, so it is the relatively simple case of an owned asset, later sold.