Scots in Treignac

My mother in law died in March 2016 in Scotland and I am one of the executors.


Including my wife there are a number of benificiaries and we have experienced problems because because my wife's sister lives and works in the USA. She has become a US citizen and pays her taxes in the US.


Since she and her US husband are anticipating retiring to the Uk in about 2 years, she tried to leave and invest her share of the inheritance in the Uk.


After looking for a UK bank which would accept her money, she gave up and we wrote a cheque which she deposited in her local bank.


She is using some of that money to pay off a loan, but the loan company wants proof that she inherited the money.


Any experience of what I will need to send as proof. Most of the executry work was done by my wife and I.


I tried phoning the US embassy in Edinburgh, but they only discuss tissues with an appointment.

moneypenny20

I would have thought a certified copy of the will together with a final financial breakdown of monies, showing her what her percentage was would be enough. That's what we needed to show when we had an 'argument' with Santander in the UK anyway.

Cook_County

As your wife's sister is a US person she will need to file Form 3520 with the IRS. If she is depositing the money in a Scottish bank, she will need to file an FBAR and an 8938. If she is paying off a Sterling loan she will need to recognise a taxable foreign currency gain under Internal Revenue Code Section 988. Consequently, this may prove expensive for her in US tax terms.

The loan company presumably will accept a copy of the grant of probate.

Just_Joy

I have never heard of a loan company asking where the money came from, usually the only thing they are interested in is getting paid. Unless it's some kind of federal loan I'd be asking what business it was of theirs.

Scots in Treignac

They were concerned that another loan had been taken out to pay off their loan.

Just_Joy

A lot of times people do debt consolidation loans or refinance loans at lower interest rates. A quick check of your sister-in-law's credit report would show them whether or not she had taken out another loan. Unless there is some kind of law against it in that state, or there is something in the loan agreement I'd still be asking what business it is of theirs.


It's not really a big deal but, sometimes companies will ask for things under the guise of it being required when in fact it is not (they use it for statistical data and marketing). When I've switched car insurance companies I've had the old company tell me I need to provide them information on the new company ... no I don't, the only people that need to know are the div. of motor vehicles.

petitefrancaise

strange that they are concerned about that. If she were taking out a new loan then I would expect them to be diligent about assets etc.

I think in her place I'd just be telling the loan company to tell me how much I have send them to pay off the loan on a certain date and digging my heels in.

Cook_County

I'd be more worried about the US tax bill on the currency gain...

Pulaski

The issue is because the money came from overseas. I strongly recommend against refusing to provide the information as the bank is highly likely to report the refusal plus all the info it has in its own databases plus anything it can glean from the internet about their customer, flag the whole case as "suspicious" and send the file off the FinCEN branch of the IRS, who will share it with every branch of law enforcement you have ever heard of, and some you haven't. From there the consequences are unpredictable, but could easily include a detailed investigation by the IRS of sll your financial circumstances and recent tax returns. .... The is also the very real possibility of "civil forfeiture".

Take a look at this wiki if you doubt what I am saying or want to understand more about the process. Some of the underlying law is part of the USA PATRIOT Act, but a lot of it actually goes back much further.
Trust me, that would be a huge mistake, creating a risk of things blowing up in a very ugly way.

scot47

A letter from the Scottish solicitor who dealt with the will ? Would that suffice/

Just_Joy

It's not the bank asking for the information it is the loan company. I would have no problem whatsoever with the bank asking where the money came from as they are required to follow certain rules to prevent funding of terrorism and money laundering etc. I would question why a loan company would want this information and what they planned to do with it.

Pulaski

The same rules apply to loan companies as to banks, and many loan companies actually belong to banks anyway. There are in fact a number of other business types that the same or very similar rules apply to, including not only loan companies, insurance companies, and securities and commodities dealers, but also dealers in gemstones and pawnbrokers.

And what they do with the info? .... Well if you provide all the info and it make sense and can be verified at least in part, e.g. in the OP's case, the will can be traced to a death certificate (which is a matter of public record), then nothing will happen, but if you kick up a stink, the consequences are hard to predict. There is a chance, albeit a small one, of things getting very ugly indeed.

Scots in Treignac

We were given the Scottish equivalent of Probate by the solicitor, so we have a document which contains a monetary value of the estate, but after that my wife and I did the work of consolidating the various funds and then distributing the money in accordance with the will and the instructions of trusts.


My concern is that if this loan company is not satisfied with a letter from me as an Executor, then we will have the added expense of getting a copy of the will certified and posted to the USA

Just_Joy

I'm not saying I wouldn't give them the information they're asking for, especially in this case, I'm just saying I would question why they wanted it. That they were concerned another loan had been taken out to pay off theirs is not IMO a good enough reason, that to me sounds more like they are interested in who the other loan is with and what the interest rate is so they can counter offer.

tom169

A lot of it stems down to money laundering - and spotting it. It's a huge part of financial compliance nowadays.