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Aston Lawyer
Aston Lawyer, Solicitor
Category: Law
Satisfied Customers: 10352
Experience:  Solicitor LLB (Hons) 23 years of experience in Conveyancing and Property Law
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My wife and I and my mother in law decided to sell our houses,

Customer Question

My wife and I and my mother in law decided to sell our houses, put the proceeds to one bigger house and move intogether and we would look after her.Her house completed first and the proceeds sent to the solicitor representing us on the purchase of the new house.We have exchanged contracts on our house and are due to move into the new house on the 6th March.All the proceeds of both houses are needed to purchase the new house.Unfortunateley mother in law died this week unexpectly and all her accets apart from about £10000 in savings are commited to the new house on which we are legally commited.On finding her will made in 2006 she left £10000 each to my 3 children but all her money is commited to the new house on which we exchanged contracts before she died.What is the situation regarding the money left to my children.My wife is the executor of the will
Submitted: 2 years ago.
Category: Law
Expert:  Aston Lawyer replied 2 years ago.

Hello and thanks for using Just Answer.

My name is ***** ***** am happy to assist you with your enquiry.

I am sorry to hear of yours and your Wife's loss.

Were you to hold the new property as Tenants in common or Joint tenants with your Wife and Mother in law?

I look forward to hearing from you.

Kind Regards

Al

Customer: replied 2 years ago.

We are putting the new house solely in my wifes name

Expert:  Aston Lawyer replied 2 years ago.

Hi Colin,

Thanks for your reply.

Well, on the basis that your Mother in law had authorised her Solicitor to send her proceeds of Sale to your Wife, to enable her to purchase the new property, that money will be seen as a lifetime gift by your Mother in law.

A Will only comes into operation at the time of that person's death and their Estate has to be administered by way of what money that person owned at the date of death. As these Sale monies had already been "transferred" to your Wife, they do not form part of your Mother in law's Estate.

Therefore, if there is not sufficient funds left in your Mother in law's Estate to pay the legacies to your children, these legacies fail and do not have to be paid. However, if, for example, there is £3,000 left in your Mother in law's Estate after payment of the funeral/other debts, then each of your children should receive £1,000 each on a pro-rata basis.

I hope this assists and sets out the legal position.

Kind Regards

Al

Aston Lawyer, Solicitor
Category: Law
Satisfied Customers: 10352
Experience: Solicitor LLB (Hons) 23 years of experience in Conveyancing and Property Law
Aston Lawyer and other Law Specialists are ready to help you
Customer: replied 2 years ago.

Re recent enquiry would a lifetime gift have any tax implecations bearing in mind my wife inherited everything in her mothers will anyway

Expert:  Aston Lawyer replied 2 years ago.

Hi Colin,

For Inheritance tax purposes, the monies gifted by your Mother in law would still be counted as forming part of her Estate, as the gift was made within 7 years from the date of her death.

Kind Regards

Al

Customer: replied 2 years ago.

the transferred money from my mother inlaw is commited to the new house as we have exchanged contracts and is in the bank account of the solicitor acting on our purchase.Will this money be subject to probate which would hold up the final purchase

Expert:  Aston Lawyer replied 2 years ago.

Hi,

No- the money doesn't need to be frozen or anything like that. As it was gifted in her lifetime, the money belongs to your wise. All I was trying to say is that when calculating the value of your Mothee in law's Estate for Inhertitance tax purposes, this gift amount would have to be included.

Kind Regards

Al

Customer: replied 2 years ago.

as her entire estate is under £300000 including the transferred money presumably no tax would be due is that the case

Expert:  Aston Lawyer replied 2 years ago.

Hi Colin,

You are correct- if it is under 325K, no tax is payable, so you have nothing to worry about.

Kind Regards

Al

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