Gifts made prior to Will

[idlewild]

Hi,

Just after some advice, I have always been the sole beneficiary of my mothers will (father already deceased) although I have two half sisters from my mums first marriage.

I have previously (4 years ago) been given a reasonable sum of money as a gift (although have no documentation to show it was a gift and not an inheritance advance).

My mother has recently redrafted her will to include my half sisters in it under the assumption the estate will now be split 3 ways. One of my sisters went with my mum to draft the will I understand they mentioned that I had already been given my inheritance to the solicitor (who happened to be my sisters solicitor as well).

My mum is reasonably in control of her mind although does sometimes get confused and isn't sure whether the money I have already been given is identified in the will as being my part of the inheritance. I have no problem with this if it is the case

However, I suspect my mothers estate is less than the value of the money she gave me. When the inevitable happens, and mums estate is assessed, if they add the gift / advancement I got to the overall estate I suspect the money I received will exceed the value of my third of the estate.

My question is, is there a mechanism that will force me to give this money back to allow the estate to be split evenly, or is it just hard luck on my half sisters ?

i.e, if I got a £40k gift, £20k of estate left, so total estate including the gift would be £60K. Divided between three siblings three would be £20k share each. However I've had £40k already so can I be asked to give the £20K back ?

[CleverClogs]

Re: Gifts made prior to Will

If this is an essay question, when should it be handed in? :grin:

If it is not an essay question, one might wonder if there was a possible conflict of interest in the way that the will was drawn up by your half sister's shyster.

[idlewild]

Re: Gifts made prior to Will

I hope I get an A+

The solicitor thing has crossed my mind but if they cant reclaim the money anyway probably isn't worth worrying about...

My thoughts /hopes are that even if its mentioned in the will that I had an advance of my inheritance (and that would be changing what mum intended as it was a gift) due the time passed they cannot come after me for the money, merely discount me from getting anymore.

[CleverClogs]

Re: Gifts made prior to Will

I'm not sure that the estate or its executor(s) could reclaim the gift, or deduct it from your share of the estate unless the will specifically states that the estate is to be divided such that the gift is to be deducted from your share.

The gift could, however, be included in the reckoning for Inheritance Tax if your mother were to kick the bucket in the next three years and if the inclusion of the gift took the value of the estate over the Inheritance Tax threshold.

[Amethyst]

Re: Gifts made prior to Will

If this is likely to come up later then it may be worthwhile discussing this with your Mother and Sister now and give your Mother the opportunity of correcting her will now, as fighting against it after the even will be incredibly difficult. You already seem to feel that the will does not cover your Mother's true wishes for her estate after death, and that feeling is likely to be stronger as time passes, regardless of the money/value. If this stays buried and you go along with it it may build up resentment towards your sister which could end up being very costly, emotionally and financially.

Just my thoughts.

The others have outlined the inheritance tax parts. I have tried to find out about if the inheritance advance (as opposed to gift) would be repayable if the estate value means you received more than the third that was intended but haven't found a definitive answer I'm afraid.

[idlewild]

Re: Gifts made prior to Will

I'm not sure that the estate or its executor(s) could reclaim the gift, or deduct it from your share of the estate unless the will specifically states that the estate is to be divided such that the gift is to be deducted from your share.

The gift could, however, be included in the reckoning for Inheritance Tax if your mother were to kick the bucket in the next three years and if the inclusion of the gift took the value of the estate over the Inheritance Tax threshold.

I'm not concerned about the tax as the estate won't exceed the threshold... That was really my question, if in the will it says the gift forms part of the estate, could they force me to repay any of the gift if the estates value has diminished and I've had more than my share... My thought is no as that money has left mums estate and whilst it's value can be considered in splitting the remaining estate there is no recourse to recover any previous over payments ?

[enquirer]

Re: Gifts made prior to Will

My mother has recently redrafted her will to include my half sisters in it under the assumption the estate will now be split 3 ways. One of my sisters went with my mum to draft the will I understand they mentioned that I had already been given my inheritance to the solicitor (who happened to be my sisters solicitor as well).

Frankly, this is a stitch-up in progress and needs to be addressed immediately. As Amethyst points out, trying to deal with this after your mothers death will be a nightmare.

If something has been gifted before death, then it no longer forms part of the estate. If it is specifically mentioned in the Will, then I would have thought that any provision relating to it would then be void.

Seek professional advice.

[idlewild]

Re: Gifts made prior to Will

Frankly, this is a stitch-up in progress and needs to be addressed immediately. As Amethyst points out, trying to deal with this after your mothers death will be a nightmare.

If something has been gifted before death, then it no longer forms part of the estate. If it is specifically mentioned in the Will, then I would have thought that any provision relating to it would then be void.

Seek professional advice.

That's what I hoped, once something has been gifted to me, even if its identified in the will as part of my inheritance, it cannot be pulled back into the estate and is effectively gone.

So even if the gift is greater than my share should be under the will there is nothing that can be done.

[Amethyst]

Re: Gifts made prior to Will

That's what I hoped, once something has been gifted to me, even if its identified in the will as part of my inheritance, it cannot be pulled back into the estate and is effectively gone.

So even if the gift is greater than my share should be under the will there is nothing that can be done.

If the 'gift' is put down as part of your inheritance, that does make it an advance on your inheritance. If the rest of the will states the estate is to be spilt equally three ways, and the advance you have already had is more than a third then it could be at risk, and you may end up having to pay over a proportion to your sisters. THAT is the issue you need to check.

If the 'gift' is actually a GIFT then it wouldn't be at risk at all and wouldn't be accounted for in the estate other than for inheritance tax purposes (if the HMRC deem so), and you would receive a third of the estate exactly the same as your sisters.

I realise you don't want to gain more than your sisters and are quite happy for it to be taken into account as part of your third when calculating inheritance, BUT if the estate value diminishes so a third is less than the value of your gift you need to know exactly where you would stand.

I expect your Mother wouldn't want you to be faced with all these issues so I would get professional advice (a free half hour should do it as for a professional lawyer it should be a straight forwards question - I can only google!) and then decide what you do. Sadly it does sound like a bit of a stitch up in progress and sorting it now would be much better so your Mother has the will she intended.

(I don't know anything on values etc or what the gift was for but am imagining a situation where the gift paid for a house deposit etc where having it partially recalled to the estate might force you to sell your home)

[idlewild]

Re: Gifts made prior to Will

If the 'gift' is put down as part of your inheritance, that does make it an advance on your inheritance. If the rest of the will states the estate is to be spilt equally three ways, and the advance you have already had is more than a third then it could be at risk, and you may end up having to pay over a proportion to your sisters. THAT is the issue you need to check.

If the 'gift' is actually a GIFT then it wouldn't be at risk at all and wouldn't be accounted for in the estate other than for inheritance tax purposes (if the HMRC deem so), and you would receive a third of the estate exactly the same as your sisters.

I realise you don't want to gain more than your sisters and are quite happy for it to be taken into account as part of your third when calculating inheritance, BUT if the estate value diminishes so a third is less than the value of your gift you need to know exactly where you would stand.

I expect your Mother wouldn't want you to be faced with all these issues so I would get professional advice (a free half hour should do it as for a professional lawyer it should be a straight forwards question - I can only google!) and then decide what you do. Sadly it does sound like a bit of a stitch up in progress and sorting it now would be much better so your Mother has the will she intended.

(I don't know anything on values etc or what the gift was for but am imagining a situation where the gift paid for a house deposit etc where having it partially recalled to the estate might force you to sell your home)

Yes that my concern re paying it back if its deemed an advance.. .however, the gift was given before the new will was produced so surely the definition of a gift cannot be changed once its been given ?

[Amethyst]

Re: Gifts made prior to Will

Yes that my concern re paying it back if its deemed an advance.. .however, the gift was given before the new will was produced so surely the definition of a gift cannot be changed once its been given ?

I have previously (4 years ago) been given a reasonable sum of money as a gift (although have no documentation to show it was a gift and not an inheritance advance).

One of my sisters went with my mum to draft the will I understand they mentioned that I had already been given my inheritance to the solicitor (who happened to be my sisters solicitor as well).

My mum is reasonably in control of her mind although does sometimes get confused and isn't sure whether the money I have already been given is identified in the will as being my part of the inheritance.

...................hence needs checking, and I'm sorry I can't give you a definitive answer, been googling my ass off but nothing concrete at all .

[idlewild]

Re: Gifts made prior to Will

yes booked in for a char with a solicitor.

I suspect a deed of gift would sort this out.

[Amethyst]

Re: Gifts made prior to Will

Fingers crossed. Do let us know what they say.

[Inca]

Re: Gifts made prior to Will

You need to be very very careful,,,having just dealt with a couple of family deaths and Wills I can back the other Beagles up 100% and say get it in writing that it was a gift independent of any inheritance...and do it whilst your Mum is alive.

[idlewild]

Re: Gifts made prior to Will

You need to be very very careful,,,having just dealt with a couple of family deaths and Wills I can back the other Beagles up 100% and say get it in writing that it was a gift independent of any inheritance...and do it whilst your Mum is alive.

Will do, one further question whilst I await a chat with a solicitor, do gifts fall out of an estate anyway after a set period of time (i.e 6 /7 years), or does this just apply to IHT ?