Gifting nightmare

nyck

My father in law recently passed so everything will go to the mother in law .

So she’ll have the house £320K and his Money £100k and her own money £80k.

Once she passes it will be split 3 ways my wife , her sister and brother

My mother in law wants to gift £40-80k to 4 of the 6 grandchildren in the next few months.

It would be Mine/wifes 2 kids , sisters 2 kids but not the bothers 2 kids

As the total estate is under the IHT thresholds for a couple I’m thinking the gift would be exempt from the 7 year rule ??

Leading to my second question will this £40-80k get highlighted when the mother in law eventually passes away , when the solicitors go through the bank accounts etc. or will only the executor / solicitor know ??

We hoping to change her mind due to the rift it could cause .

thanks

Keep_pedalling

It will still be subject to the 7 year rule however as the estate is well under her available IHT exemptions with or without the gift it still results in no IHT to pay.

As her current net worth is well below £650k no IHT return will be required, but if she dies within 7 years of the gifts being made they will need to be added to the total value of her estate that needs to be declared on the probate application.

Has she got a will in place? If not that should be a priority and there is no need to appoint solicitors as her executors, this is a simple estate which anyone can deal with, so it is better to appoint family members. 

So overall not a nightmare.

Voyager2002

Keep_pedalling said:

It will still be subject to the 7 year rule however as the estate is well under her available IHT exemptions with or without the gift it still results in no IHT to pay.

As her current net worth is well below £650k no IHT return will be required, but if she dies within 7 years of the gifts being made they will need to be added to the total value of her estate that needs to be declared on the probate application.

Has she got a will in place? If not that should be a priority and there is no need to appoint solicitors as her executors, this is a simple estate which anyone can deal with, so it is better to appoint family members. 

So overall not a nightmare.

I think the 'nightmare' is the probable emotional fallout after some, but not all, of her grandchildren receive such generous gifts. Perhaps the poster is hoping to be told that these gifts would cause problems with tax or whatever, and so could give the lady a good reason not to do what she is planning.

Savvy_Sue

Voyager2002 said:

Keep_pedalling said:

It will still be subject to the 7 year rule however as the estate is well under her available IHT exemptions with or without the gift it still results in no IHT to pay.

As her current net worth is well below £650k no IHT return will be required, but if she dies within 7 years of the gifts being made they will need to be added to the total value of her estate that needs to be declared on the probate application.

Has she got a will in place? If not that should be a priority and there is no need to appoint solicitors as her executors, this is a simple estate which anyone can deal with, so it is better to appoint family members. 

So overall not a nightmare.

I think the 'nightmare' is the probable emotional fallout after some, but not all, of her grandchildren receive such generous gifts. Perhaps the poster is hoping to be told that these gifts would cause problems with tax or whatever, and so could give the lady a good reason not to do what she is planning.

Well, one good reason is that giving away chunks of money at such an early stage means she won't have that money should she need it in the near or more distant future, and the lack of it might be noticed rather sooner than after her death. 

That's especially if she needs help with care needs, or just around the home. 

Flugelhorn

oh dear - treating 2 out of 6 grandchildren differently. guess there may be a reason but likely to be some fallout 

Keep_pedalling

Savvy_Sue said:

Voyager2002 said:

Keep_pedalling said:

It will still be subject to the 7 year rule however as the estate is well under her available IHT exemptions with or without the gift it still results in no IHT to pay.

As her current net worth is well below £650k no IHT return will be required, but if she dies within 7 years of the gifts being made they will need to be added to the total value of her estate that needs to be declared on the probate application.

Has she got a will in place? If not that should be a priority and there is no need to appoint solicitors as her executors, this is a simple estate which anyone can deal with, so it is better to appoint family members. 

So overall not a nightmare.

I think the 'nightmare' is the probable emotional fallout after some, but not all, of her grandchildren receive such generous gifts. Perhaps the poster is hoping to be told that these gifts would cause problems with tax or whatever, and so could give the lady a good reason not to do what she is planning.

Well, one good reason is that giving away chunks of money at such an early stage means she won't have that money should she need it in the near or more distant future, and the lack of it might be noticed rather sooner than after her death. 

That's especially if she needs help with care needs, or just around the home. 

She is still leaving her self with £100k in cash and has a £320k home so deprivation of assets is not going to be an issue, and neither is funding home help if needed.

Keep_pedalling

Voyager2002 said:

Keep_pedalling said:

It will still be subject to the 7 year rule however as the estate is well under her available IHT exemptions with or without the gift it still results in no IHT to pay.

As her current net worth is well below £650k no IHT return will be required, but if she dies within 7 years of the gifts being made they will need to be added to the total value of her estate that needs to be declared on the probate application.

Has she got a will in place? If not that should be a priority and there is no need to appoint solicitors as her executors, this is a simple estate which anyone can deal with, so it is better to appoint family members. 

So overall not a nightmare.

I think the 'nightmare' is the probable emotional fallout after some, but not all, of her grandchildren receive such generous gifts. Perhaps the poster is hoping to be told that these gifts would cause problems with tax or whatever, and so could give the lady a good reason not to do what she is planning.

Sorry, for some reason I missed that last line in the opening post, but unfortunately there is no financial reason that comes to the rescue here. 

How old are the grand children? Does her will also cut out her son’s grand children? If it does then no gifts now just kick the rift down the road although if the grand children are all adults at the time of her death a deed of variation could override the disinheritance if the other beneficiaries agree. 

nyck

Keep_pedalling said:

Voyager2002 said:

Keep_pedalling said:

It will still be subject to the 7 year rule however as the estate is well under her available IHT exemptions with or without the gift it still results in no IHT to pay.

As her current net worth is well below £650k no IHT return will be required, but if she dies within 7 years of the gifts being made they will need to be added to the total value of her estate that needs to be declared on the probate application.

Has she got a will in place? If not that should be a priority and there is no need to appoint solicitors as her executors, this is a simple estate which anyone can deal with, so it is better to appoint family members. 

So overall not a nightmare.

I think the 'nightmare' is the probable emotional fallout after some, but not all, of her grandchildren receive such generous gifts. Perhaps the poster is hoping to be told that these gifts would cause problems with tax or whatever, and so could give the lady a good reason not to do what she is planning.

Sorry, for some reason I missed that last line in the opening post, but unfortunately there is no financial reason that comes to the rescue here. 

How old are the grand children? Does her will also cut out her son’s grand children? If it does then no gifts now just kick the rift down the road although if the grand children are all adults at the time of her death a deed of variation could override the disinheritance if the other beneficiaries agree. 

Thanks everyone for the info so far

The Grand children are all adults

As I understand In the will everything will be split 3 ways my wife,sister, brother, then if any of them die the grandchildren are next in line including the brothers 2 children .

I cant discuss the reasons the mother in law only wants 4 of the 6 grandchildren benefiting from her personnel money.

Obviously if it goes into the will , its there for everyone to see .... Big Fallout

The Sister is the executor and will be dealing with the paper work etc 

If the mother in law ploughs ahead and gifts her money and she dies in the next 7 years, will it only be the Executor(sister)  that can see that money has been gifted .ie the brother will be none the wiser and cant access the paper work/accounts etc or can anyone access this information ??

Flugelhorn

nyck said:

If the mother in law ploughs ahead and gifts her money and she dies in the next 7 years, will it only be the Executor(sister)  that can see that money has been gifted .ie the brother will be none the wiser and cant access the paper work/accounts etc or can anyone access this information ??

It may well become clear in the accounts which the brother as a residuary beneficiary would be  entitled to see.  Main problem really is that someone is bound to say something at some point, they always do

Keep_pedalling

Her executor will need to apply for probate, so her will becomes a public document once that is obtained, but the gifts won’t show up as an IHT return won’t be required. 

If at the time you all feel that two of the GC are being treated unfairly you can make a deed of variation to distribute the estate equally. 

Keep_pedalling

She really should make a codicil to appoint your spouse at a joint or back up executor. If anything happens to your SIL so she can’t act as executor either of her other children could take on the role, including the disinherited son.