Repayment of gift / loan from will /estate.

[rabbit]

A friend has the following problem.

About a year ago, her elderly father got a very large tax bill, which had accumulated over several years. Her monther had passed away previously. Even though the tax was payable by her father, because he was in poor health (and had not ready access to such liquid funds ), she herself paid it, as it was attracting interest + penalties etc as it was. Her father has since passed away. While she is a named beneficiarry on the will, she is wondering if she is now entitled to repayment of the money she paid ( out of her own bank a/c ) from the estate, if she wanted to ? There is no mention of it on the will. If not, can she reduce her inheritance tax as a result of the money she gifted her father last year ?

Someone may have come up with a problem like this before. Thank you in advance for any replies.

 

[Vanilla]

That depends on whether she gave him the money as a gift or as a loan. If it was a loan then she must make a claim against the estate to have it repaid to her. Who is the executor? And what attitude will they have to this? They may dispute that it was a loan and then it could go to litigation. If she just wants to offset then she will have to say that the payment was in consideration of the inheritance and it will be up to revenue to agree to offset or not.

 

[rabbit]

That depends on whether she gave him the money as a gift or as a loan. If it was a loan then she must make a claim against the estate to have it repaid to her. Who is the executor? And what attitude will they have to this? They may dispute that it was a loan and then it could go to litigation. If she just wants to offset then she will have to say that the payment was in consideration of the inheritance and it will be up to revenue to agree to offset or not.

Thanks.

She herself is named on the will as the sole executor, as she was obviously very close to and trusted by the deceased. She is unsure what to do. A sibling could argue it was a gift, if indeed the sibling even knew of it, which she does not.

 

[mf1]

Perhaps a bit of openness and transparency? With all the other sblings?

I find that there is nothing like it when the thorny issue of money crops up. In theory, the other siblings should have no issue in allowing the money to be repaid from the estate- after all, it eased the fathers worries. In reality, my experience is that about 20% of beneficiaries turn into money crazed loons ( "its not for me , its for my children" is one of my favourites, followed closely by "its what he would have wanted" etc.,etc. oh, and anyway, didn't she get enough out of him when he was alive.........) the list is endless.

In the end, family politics will be the deciding factor. Mind you, its not helped by being described as a gift.

mf

 

[sam h]

Did she ever intend for her father to pay back this money or was she content to know his tax bill was sorted and never expected him to pay it back?

If she intended to have it paid back, she would have had that conversation with him at the time in order to establish how he would repaid it (€x per week, or €x when a policy matures etc).

If she never had this conversation, it was a gift.