Gifting transferring money before death probate etc

apples24

So 

member of family had to reduce savings so transfered 40k into a joint bank account of daughters a couple years back 

questions on chats today were what to do when god bless her she goes with the cash 

best way naturally is to tell probate solicitor about it and send it across as part of the estate 

I presume they will anyway see it if they go through back records that detailed? 

We all know probate can take ages hence this question has arised 


its easy to say gifted it to daughters but the 7 year rule would apply anyway? 

The estate will not be of massive value maybe £280000

 this isn’t to deceive hmrc or do any remember of family out of potential inheritance 

but it was a question that popped up today in chats so I thought I’d ask on here 

Thankyou 

sheramber

member of family had to reduce savings so transfered 40k into a joint bank account of daughters a couple years back 

can you explain what ‘joint account of daughter’ is?

Who are the joint owners of the account?

Marcon

apples24 said:

So 

member of family had to reduce savings so transfered 40k into a joint bank account of daughters a couple years back 

questions on chats today were what to do when god bless her she goes with the cash 

best way naturally is to tell probate solicitor about it and send it across as part of the estate 

I presume they will anyway see it if they go through back records that detailed? 

We all know probate can take ages hence this question has arised 


its easy to say gifted it to daughters but the 7 year rule would apply anyway? 

The estate will not be of massive value maybe £280000

 this isn’t to deceive hmrc or do any remember of family out of potential inheritance 

but it was a question that popped up today in chats so I thought I’d ask on here 

Thankyou 

If the estate is around £280K + this £40K it's still below the IHT threshold of £325K, so no issue in relation to that. 

Not sure why you need a probate solicitor unless there are some real complications in this modest estate?

I've asked for this to be moved to a more suitable board: https://forums.moneysavingexpert.com/categories/deaths-funerals-probate

BikingBud

One might ask what the need to transfer the money was and how far back is a couple of years?

Could it be construed as a gift or was it hiding capital?

What if daughters decide to keep it?

Were any benefits involved?

Are DWP likely to investigate? 

questions on chats today were what to do when god bless her she goes with the cash 

Where is she going with the cash?

apples24

No I think it was pension related or savings related and she’s also getting paranoid now saying new rules from Labour 

the two daughters have it in there name joint account

there are others to share it with it’s not a deceiving thing 

legally is where they want to know how they stand 

they don’t want to get in trouble however far in the future when it becomes a solicitor and probate thing 


I told them my idea is to tell the solicitor they have the cash and she sent it to them and see what he says he’s only going to say yes it’s fine leave it or no send it back to the estate for probate 

Savvy_Sue

I'm really sorry, but I can't see any reason to put 'my' savings into someone else's name, unless I want to make it look as if I have less than I actually have in order to claim benefits / pay less tax / apply for pension credit. 

And if there are others to share it with, then I can't see any reason not to get on with sharing it. 

For what other reason does anyone HAVE to reduce savings? 

Sea_Shell

apples24 said:

No I think it was pension related or savings related and she’s also getting paranoid now saying new rules from Labour 

the two daughters have it in there name joint account

there are others to share it with it’s not a deceiving thing 

legally is where they want to know how they stand 

they don’t want to get in trouble however far in the future when it becomes a solicitor and probate thing 


I told them my idea is to tell the solicitor they have the cash and she sent it to them and see what he says he’s only going to say yes it’s fine leave it or no send it back to the estate for probate 

A few things at play here.

If the money has been GIFTED and not LOANED and been documented as a loan, the money is now theirs, and will not form part of the estate.    If gifted, legally, they do not HAVE to return it.   *

It appears that IHT will not be a factor, so the 7 year rule won't come into play.   Even with the nominal (not the actual cash) amount added back to the estate, it won't take them over IHT thresholds.   


HOWEVER, they may find themselves in deep trouble if they are investigated as to what savings they have if HMRC or the DWP come sniffing around, and it can be shown that they have Deliberately Deprived themselves of assets to fall into a lower bracket (interest/savings/income etc) and then CLAIM (or continue to claim) anything they wouldn't be entitled to if they still had their £40k.

Intent is key here....WHY?    


* ETA - if its been deposited into a JOINT account in both daughters names, then legally, one of them could access and spend it ALL, and not breach anything other than their siblings trust.   

madbadrob

Ighnoring the one question you have been asked many times and have decided not to answer the estate is not going to fall into the IHT threshold and therefore can be ignored in that matter.  I am assuming all the siblings who would inherit know about this transfer and are happy with it.  However as I think as been mentioned if the money was paid into one siblings account as a gift then they could if they wanted to say stuff you im having it.  If it is paid into a joint account then the sibnling would become the owner of said money on death of parent and again could say the above.  If it was a loan (which I suspect from what you said it wasnt) then the sibling wouild be required to repay that to the estate or with agreement of the other sibnlings just the amount over which is an equal share.  

Now with regards to the reduction of the parents etstate and for what reasons.  If the gift was to reduce the savings to below that of say the pension credit threshold then DWP would require any over payments returned to them and this could wipe out the estate.

Asa for the comments regarding labour.  They have not made any changes to the IHT threshold for non farmers nor anything else to do with inheritance so I am not sure why she is worrying about this. 

Rob 

Sea_Shell

I've just remembered...

Maybe they are worried about the planned change to include unspent pension pots into the IHT calculations?!?

silvercar

The clear advantage is that the recipients have the money immediately without having to wait for probate, even though the money will be included in the estate.

apples24

Sea_Shell said:

I've just remembered...

Maybe they are worried about the planned change to include unspent pension pots into the IHT calculations?!?

Pretty much yes mate 


so if it’s proven to be a gift, question how is it proven? 

The moneys been sat there a couple years now