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Alex J.
Alex J., Solicitor
Category: Law
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Experience:  Solicitors 2 years plus PQE
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This is regarding gifts and inheritance... My grandfather

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This is regarding gifts and inheritance...
My grandfather over the last 3 years has loaned me a substantial amount of money. Over £50k - this has come because I started a small business and his money helped with cash flow.
There are no formal paperwork - it was done over the phone etc and I promised I could pay him back when I was in a position to do so. He was happy with this.
My grandmother passed away last week (my grandfather is still alive) and my aunt has been very upset after coming to learn that I have had help, which has diminished the estate (she doesnt know by how much) and therefore made less available for her and her children.
She has solicitors on her side of the family and has said that when my grandfather passes, she will make it 'hard for me' and ensure that fairness is reached.
I need some advice on what she can do, where I stand and what I need to be aware of please.
PS. My grandfather lives in france - but I was always sent money from his UK natwest account to my uk account.
Hi, Thank you for your question and welcome. My name is ***** ***** I will assist you. I am sorry for your loss. Do you intend to repay the loan at some point? Who is your grandfathers executor (ie the person that will administer his will - if he has appointed one)? Kind regards AJ
Customer: replied 2 years ago.
Yes I do intend to repay it - it may take me a while but that is my intention.Currently as my grandfather is still alive he controls the estate - I believe (although I need confirmation of this) that my mother will be the executor is the estate when my grandfather passes away. She has been living with them as a carer for my grandmother who had Alzheimer's.Thank you.
Hi Thank you. ***** mother is in control of the estate in the event that your grandfather passes away, it will be her responsibility to collect in his assets and distribute them to the beneficiaries. The loan is simply one asset, and currently with no terms it could be demanded for repayment. It is your aunts prerogative to make "life difficult", but really all she can do is put pressure on your mother (as the potential executor) to call in the loan. If you want to protect yourself now, enter into a retrospective loan agreement that properly structures the repayment and does not allow the loan to be called in if your grandfather were to pass away. If you set the repayment in writing then there is not much your aunt can do to challenge this, as long as your grandfather has the full capacity to sign a contract. You can structure the payment terms however you want, monthly in arrears or even set to a particular performance indicators e.g the loan will be repayable in tranches for every £10k profit the business makes. I look forward to hearing from you.
Customer: replied 2 years ago.
Thank you that is helpful.It could be that my mother and her brother (he's married to the aunt in question) are joint executors. How would that change things?My grandfather was happy to gift me the money - but is there a limit on what he can gift?
Hi, Thank you. It would just mean there is a higher chance the executors would put pressure on you to repay the loan, again though any risk of this is mitigated if you enter into a proper agreement detailing the loan repayment terms. Of course he can gift you the money, but if he passes away within 7 years of making the gift then you may have to pay inheritance tax on it - which would obviously be less than repaying the whole loan. Kind regards AJ
Customer: replied 2 years ago.
OK - is there a limit on how much he can gift me at all?If I enter into a loan agreement now, could my aunt try and overrule it in anyway?I do want to repay it to the estate, so that my mum has more - she gave up work to look after them and my aunt is a millionaire. I dont want my aunt to get a penny from me. I know that sounds vindictive but she has been incredibly insensitive, bringing this matter up just 2 days after my gran's funeral.Re: inheritence tax, isnt £50k to £60k under the threshhold for paying tax?
Hi,Thank you. There is no limit on the gift as long as (a) He lives for 7 years from the date of the gift or (b) does not go bankrupt within 6 years of making the gift. £50-60k - is under the inheritance tax threshold, but it may not be under the threshold taking into account all of his estate - this explains the 7 year rule in detail. If his estate is worth less than £325k in total then there would be no inheritance tax to pay any way.Your aunt could challenge it (a loan document) by saying he did not have the mental capacity to understand what he was signing - but again she would have to convince the executors to do this. If he is able to make his own decisions then capacity should not be an issue.I would be most grateful if you would take a moment to rate my answer? Thank you kindly.AJ
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Customer: replied 2 years ago.
OK thank you.Am I allowed to come back to you with other questions if needed at a future time?
No problem. Please do not hesitate to contact me with any follow up points. Kind regards AJ
Customer: replied 2 years ago.
My grandparents have lived in France for maybe 15 years but kept Natwest UK accounts.Will this definitely come under UK law? Even if money from my grandad's French account was moved to a UK one of his, and then mine?My mum is talking to solicitors in France and it is very different over there - i.e. there's no executor.
Hi, Thank you. The money we are discussing is based in the UK?
Customer: replied 2 years ago.
yes it was based in the uk
Hi thank you. Any action your aunt tries to take will have to be in the UK. Also your grandfather may have two wills for property in France and England. Kind regards AJ
Customer: replied 2 years ago.
ok thank you