Sister pressuring for money

Kitchen_Gardener

My sister and I are both executors of mum's will. She has left a house (approximately worth 800k) and £14 000 savings to be split 3 ways. My sister is happy for me to sort probate etc. So I informed mum's banks and they have transferred her savings to my bank account. We will need this money for inheritance tax.

Unfortunately my sister is terrible with money and is in debt and is now pressuring me to give her some of mum's money promising to write an IOU. My sister rarely pays back money she is lent.  

What do I do? 😕

JGB1955

You do nothing.  The estate has no money to distribute until the house is sold.  End of conversation.

Keep_pedalling

Was your mother a widow? If she was there are transferable exemptions that probably mean there is no IHT to pay.

if she was single / divorced then you are will have an IHT liability of around £124,000 and you will need to opt to pay by instalments which means you don’t even have enough to meet the first instalment.

Just explain to her there is simply not enough cash in the estate to make any interim payments. Even if there is no IHT you still have to meet estate expenses such as funeral costs, house insurance ect.  

VKE

Kitchen_Gardener said:

My sister and I are both executors of mum's will. She has left a house (approximately worth 800k) and £14 000 savings to be split 3 ways. My sister is happy for me to sort probate etc. So I informed mum's banks and they have transferred her savings to my bank account. We will need this money for inheritance tax.

Unfortunately my sister is terrible with money and is in debt and is now pressuring me to give her some of mum's money promising to write an IOU. My sister rarely pays back money she is lent.  

What do I do? 😕

To keep things as simple as possible where money is concerned one of the 1st things I'd suggest is you open a new account to keep money that's been transferred from your mum's bank to you; don't have estate funds mixing with you own personal funds ~ it keeps things much cleaner, clearer and stops things getting 'muddy'.

When I was execuator I just opened a 2nd account with one of my banks and everything that was paid in/out connected to my relative's estate went through this account, it helped me track things and sat alongside an excel tracker I put together. I found both helped me keep on top of thing's; as a 'control freak' having to wait for things to be done that were out of my control it helped me keep calm and just in case anyone reared their 'ugly' side I knew everything was clear, tracked and visible if and when things may have been challenged.

You may want to print off some info on the responsibilities of an execuator and give a copy to your siblings so that everyone is clear on the responsibilities in the hope that it stops any unnecessary issues arising causing additional upset.

Marcon

Kitchen_Gardener said:

My sister and I are both executors of mum's will. She has left a house (approximately worth 800k) and £14 000 savings to be split 3 ways. My sister is happy for me to sort probate etc. So I informed mum's banks and they have transferred her savings to my bank account. We will need this money for inheritance tax.

Unfortunately my sister is terrible with money and is in debt and is now pressuring me to give her some of mum's money promising to write an IOU. My sister rarely pays back money she is lent.  

What do I do? 😕

Where does an IOU need to come into things? If she's going to be entitled to a third of the £14K, it's an advance not a loan, so worrying about whether she will 'pay it back' is needless.

Even so, paying out cash before the house has been sold sounds a bad idea, given there are expenses to meet.

Kitchen_Gardener

I've set up a separate account for mum's money to go into. It's just a savings account, maybe I should have opened a current account? It's just in my name, not my sister's. Much as I love her I don't trust her when it comes to money.

How much is the initial IHC installment likely to be ? (My mum was divorced and single, her estate to be split three ways between children and grandchild)

Spendless

The only problem my parents found in putting an inheritance into a savings account is that they were then transferring it to their current account in order to pay bills/inheritance shares out but they are very much traditional 'write out a cheque' people. If they'd been more confident in how to do bank transfers it'd have been less of an issue. They got an advantage that the savings account did accrue interest that was also shared accordingly with the beneficaries. 

doodling

Hi,

I would tell your sister that, as the estate is currently in debt to the tune of around £124k inheritance tax, then it would be much better if she could find some money and you will write her an IOU.

That should hopefully stop her making further requests until the house is sold.

Keep_pedalling

Kitchen_Gardener said:

I've set up a separate account for mum's money to go into. It's just a savings account, maybe I should have opened a current account? It's just in my name, not my sister's. Much as I love her I don't trust her when it comes to money.

How much is the initial IHC installment likely to be ? (My mum was divorced and single, her estate to be split three ways between children and grandchild)

You will need to find 10% of the total bill to pay the first instalment, you can then clear the remainder once the house is sold as long as it sells within one year of that payment otherwise you will have another instalment to make. Interest is charged on the outstanding amount (currently 6.75%). 

Pass this information on to your sister, I am sure she will understand that any interim payments are impossible until the house is sold and she will blame HMRC rather than you.

If you are in a position to fund any shortfall in the IHT payment and estate expenses then that is the best way to go and claim back these expenses from the estate. The alternative is an executor loan but  these are like bridging loans and carry high interest rates.

Keep_pedalling

The only real danger in holding estate assets in your own account is if something happens to you while administering the estate. The best thing normally would be to have a joint account with your sister to hold estate assets in but you would need to be able to trust her not to spend it.

DietIrnBru

They can go whistle. Not to make light of the loss of a parent - an individual does not take on debt because they think an elderly relative is going to leave them a sum of money on passing. The sister sounds like my own - a black hole that is never sated regardless of how much money they get. favour given and bailing out - its not what have you done for me, it's what have you done lately. They can deal with their own debts - if they want to use their inheritence after the estate is settled - that you dont need to worry about.

This is why I don't concern myself with family politics and finances - life is way too short.

Only other bit of advice I would give - do not give her a penny of your own share.