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Harris
Harris, Law Specialist
Category: Law
Satisfied Customers: 1930
Experience:  Family Law - Specialist in Divorce, Financial Relief and Children Matters
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My brother died some 9 months ago. He was not married, did

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My brother died some 9 months ago. He was not married, did not have any children and did not leave a will.
Our Father is no longer with us but thankfully our Mother is, my sister and I have authorized the power of attorney for my mother as she suffers from Parkinson & Dementia).
I understand that as she is the next of kin, she will inherit my brother’s estate. His estate consists of cash only (approx £63K) held in the building society ( my sister is known to the building society as next of kin), there is no property and very few personal belongs (clothing, TV, stereo etc.,)
My Mother financial situation is that she owns (no mortgage) 2 properties to the value of approx £1.85 million. One of these properties is a rent property, and as such a tax return is each year.
If my brothers estate were to be put in to her estate, this would be seen as income and be taxed at 40 %. In addition to this, when she dies the remainder will be taxed at 40%.
We have filled the relevant paper work to apply for probate, but not yet taken the oath.
Want we are trying to legally avoid, is having to pay income tax & tax inheritance tax on my brothers estate.
From what I have read there is No time limit on applying for probate.
The building society are hassling us, as they want to tidy up their end of things.
Would it be possible to leave things as they are? The status quo so - to – speak.
And if the building society insisted on closing his account down, where could we put the money?
If we can leave things the same for an indefinite amount of years, once my mother dies, his estate will pass to his brothers and sisters.
Not that it makes any difference, but my brother died somewhat prematurely from motor neuron disease, he had appointed me as POA for health & finance (all signed, but he died a week before it could be authorized). We’d spoke about a will, but time wasn’t on his side.
Hopefully you can help
Yours sincerely
Patrick Maye
Submitted: 10 months ago.
Category: Law
Expert:  Harris replied 10 months ago.
Hi, thank you for your question. I think you have misunderstood the rule for inheritance tax in relation to your brother's estate. The lump sum of his estate is considered capital and not income for tax purposes. Furthermore, given that his estate is valued at less than £325,000 there is no inheritance tax liability for you to pay.Please provide a positive rating if you found this information helpful. I will not be credited for answering this question without a positive rating. Thank you
Customer: replied 10 months ago.

Hello

Not sure that I follow, or that perhaps I haven’t explain myself properly.

I fully understand the £325K for both my mother and Father.

When my mother dies her estate will be valued at say £1.85 million, but we have to add to this the money from my brothers estate (£63K), so as I see it, the estate value would be £2.48 million (subtract £700 k off that figure). The remainder reliable for tax.

What I have suggested is that my brother’s estate is not put into my mother estate and given an example of how this might be achieved.

What have gleaned from you, is that my brother’s estate would not be viewed as income and therefore not taxable as income – is that correct?

Could please comment on my original question on Not applying for probate, hence my brothers estate Not being added to my Mother's estate and therefore not liable for Tax (40%) and whether this is possible?

Thank you

Expert:  Harris replied 10 months ago.
My response was to confirm that your brother's estate will not be subject to inheritance tax as it is under £325,000. However, your mother is entitled to his full estate and therefore this will be added to her estate, making her estate worth £1,913,000 (not 2.48million - not sure where you go that figure from?). Therefore her estate that is liable for tax would be £1,213,000 provided that your father did not use his inheritance allowance threshold at the time of his death. Keeping your brother's estate tied up in probate to avoid it being physically added to your mother's estate so that it is not subject to inheritance tax is not a way around this, and even if it remained tied up in probate, upon her death it is still part of her estate and subject to the same inheritance tax rules. I appreciate that this may not be the answer you had hoped for, but please provide a positive rating if you found this information helpful. I will not be credited for answering this question without a positive rating. Thank you
Customer: replied 10 months ago.

Could a case be made to challenge the rules of intestate on the basis that I had been appointed POA and that we (my brother and I) had spoken about his wishes for his will before he died.

His wishes were for his estate to be divided equally between his brothers and sisters.

Medical opinion was that at he earliest he would die December 2015, once we had this time frame we arranged the POA, and were discussing his will when he died in July 2015.

I can see we’re on a sticky wicket, I’m just trying to follow through on my brother’s wishes.

Regards

Expert:  Harris replied 10 months ago.
Thanks - yes, you can apply to challenge inheritance through intestacy rules if you think that you have been treated unfairly under intestacy rules especially if you have been caring for him prior to his death and if there was some sort of agreement regarding his estate. However, you should be aware that this can potentially be a very expensive legal battle that will cause severe opposition between the siblings and mother.
Expert:  Harris replied 10 months ago.
Hi, this question remains open. If you found my information provided helpful please could you rate my response positively as I will not be credited for my response without a positive rating. Thank you
Customer: replied 10 months ago.

I wasn’t caring for him and I don’t think that I have been treated unfairly under the rules of intestacy.

The only thing that I would have to offer the court, would be that it was my brother’s wish was to have his estate shared equally between his brothers and sisters. A conversation that was witnessed by my sister. There would be no opposition from family members.

As mentioned we’d sorted the POA, but not the will.

On the basis of the above info, would the court entertain ? And if there’s opposition, how expensive could it be ?

Thank you

Expert:  Harris replied 10 months ago.
If it is contested it would run into the thousands for each party. The court will need to consider the alleged agreement and any indication or evidence that it was in fact made. But if you are not claiming that you have been treated unfairly under intestacy rules, then it will be difficult for you to argue that the inheritance should be for you - despite what you say your brother said regarding his estate.
Customer: replied 10 months ago.

It Not just for me, it for his siblings. What we would be looking to do is to skip the next of kin. If we were to present this to the court and evidence that we were all in agreement (the family), and that my brother had appointed me POA, would the court accept this?

Expert:  Harris replied 10 months ago.
No, if you had not been caring for your brother or providing him support, just the verbal agreement will be difficult to prove in court.
Harris, Law Specialist
Category: Law
Satisfied Customers: 1930
Experience: Family Law - Specialist in Divorce, Financial Relief and Children Matters
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