Posthumous inheritance and subsequent IHT

wrenlegs

Pls can I ask a question. This isn’t for me but for a friend and I couldn’t find the answer online so hope you can help. If they didn’t use all of the £650k on their last parent’s death and then posthumously that parent inherited a property and assets which then came to them (following that parent’s will), would they now be able to use the remainder of that inheritance tax allowance for this new inheritance? I hope my q makes sense!

Flugelhorn

I am not sure it goes through the parents estate - what did the will  (the one that left the recent assets ) say?

wrenlegs

FWIK the parent’s sibling has left a house and money to them - specifically named in the will. They were alive when their sibling passed away but never updated their will. So as it stands it all now passes to the deceased parent. Will the inheritance now follow the parents’s will? If so it all goes to their child. But the child wasn’t sure if this means they can use the remainder of the inheritance tax allowance they had from their parent. I’ve had a Quick Look at some comments on this board and wonder if it is linked to how long ago the parent passed away?

Keep_pedalling

I am not sure what you mean by posthumously inheriting, as you can’t actually do that. If your parent died first the inheritance would never have been part of their estate. If they dies second but did not live long enough to recieve their inheritance then it still should have been included as part of their estate. Which was it?

PS. This has nothing to do with pensions so I have asked for this to be moved to a more appropriate board/. 

Marcon

This isn't  a pension question so I've asked for it to be moved to a more appropriate board: https://forums.moneysavingexpert.com/categories/deaths-funerals-probate

You might think about rewording your question - it's quite muddled, in particular the various relationships.
Maybe get the friend to post for themself?

wrenlegs

Oh sorry - I hadn’t realise this is not a IH board! I guess what youre saying is that this late inheritance (received by the parent posthumously) essentially doesn’t form part of their estate. If so, will it be be passed on to the people identified in their will or will it get divided up to next of kin (I.e. won’t follow the will left by the parent)?

Marcon

wrenlegs said:

Oh sorry - I hadn’t realise this is not a IH board! I guess what youre saying is that this late inheritance (received by the parent posthumously) essentially doesn’t form part of their estate. If so, will it be be passed on to the people identified in their will or will it get divided up to next of kin (I.e. won’t follow the will left by the parent)?

Much depends on the wording of the will, so it's unlikely you will get a definitive answer here, I'm afraid.

Marcon

Keep_pedalling said:

I am not sure what you mean by posthumously inheriting, as you can’t actually do that. If your parent died first the inheritance would never have been part of their estate. If they dies second but did not live long enough to recieve their inheritance then it still should have been included as part of their estate. Which was it?

PS. This has nothing to do with pensions so I have asked for this to be moved to a more appropriate board/. 

But the parent was alive when the sibling died - so it wasn't a case of inheriting posthumously - just a bit of semantic muddle. The house/property could well have passed to them unless there is some sort of survivorship clause in the (dead) sibling's will and the parent died before living long enough to comply with that. 

Keep_pedalling

wrenlegs said:

Oh sorry - I hadn’t realise this is not a IH board! I guess what youre saying is that this late inheritance (received by the parent posthumously) essentially doesn’t form part of their estate. If so, will it be be passed on to the people identified in their will or will it get divided up to next of kin (I.e. won’t follow the will left by the parent)?

Can you give us a breakdown of who died and in what order.

DRS1

wrenlegs said:

FWIK the parent’s sibling has left a house and money to them - specifically named in the will. They were alive when their sibling passed away but never updated their will. So as it stands it all now passes to the deceased parent. Will the inheritance now follow the parents’s will? If so it all goes to their child. But the child wasn’t sure if this means they can use the remainder of the inheritance tax allowance they had from their parent. I’ve had a Quick Look at some comments on this board and wonder if it is linked to how long ago the parent passed away?

I am a bit confused.

Let's call your friend C, their parent P and the parent's sibling S.

You are saying S left P a house and money in S's will.

P died but S did not rewrite their will.  Is that right?

Then S died.

People think that S's house and money should pass to P?

If the facts are as laid out then I don't think that would be correct.

S's will may have some provision for what happens if P predeceases S.  That would apply.  For example it may say if P is dead then the house and money go to C.

Or it may say nothing and then the house and money fall into the residue of S's estate and we don't know where that goes - maybe to C.

In any event P is not relevant and any unused IHT allowance of P is still unused.

Of course if S died before P then it may be different - depends on how long there was between the two deaths and whether there was a survivorship clause in S's will.

wrenlegs

Yes, I’m sorry.i have sent them a link so they can explore the board. I guess if I try this way. Sarah and John are siblings. Sarah passes away first and leaves her estate to her children. There was no house so the children benefit from £650k IHT exemption (they didn’t use it all). 3 years later John passes away. Even though he knows Sarah has passed, he never updated his will and so his house and other assists are left to Sarah. Because Sarah died (before John) will the inherited house and assets pass to Sarah’s children as per her will and can the children make use of more of the £650k inheritance tax exemption or is it now too late? Does that make it clearer?