My grandmother keeps sending me large cheques. Can I do anything about it?

[shelivesthedream]

My 87-year-old grandmother lives quite a long way away and doesn't like using the phone, so we write to each other semi-regularly. Not epic missives, but a notecard worth on the weather, what I'm doing at the moment, etc. I like my grandmother and it's a little effort to make an old woman happy, as no family lives near her and we only visit a few times a year.

She has always given me and my younger brother several hundred pounds (or even a thousand) on birthdays and at Christmas because she is fairly well off and wants to avoid inheritance tax. My brother, as far as I know, does not write to my grandmother very often at all. I have always understood that she thinks it important to treat both of us (her only grandchildren) equally and have always expected an equal inheritance no matter what me and my brother do.

However, over the past year she has been sending me cheques in some of these letters. There has always been the odd £20 stuffed into an envelope with the instruction to buy myself something nice, but the amounts now make me uncomfortable. She sent me £2000 for driving lessons earlier this year (a reasonable sum for a full course of lessons with a small buffer built in) as she really wants me to learn, but I recently wrote to tell her I passed my theory test and she sent me another £1000 'for driving lessons'. I wrote back to thank her and said that with the money she sent me earlier this year I now had more than enough to pay for lessons (in case she had forgotten about the earlier cheque). She wrote back, enclosing a cheque for another £1000.

This worries me for three reasons:

1. I am worried that I am getting more than my brother. I don't think this is in the family spirit and my mother would go nuts if she found out, and I would be accused of persuading my grandmother to play favourites. I have no way to find out if my brother is also getting money without revealing that I am, which if he isn't would be disastrous.

2. I am worried that my grandmother feels like she has to give me money or I will stop writing/visiting. This is not true.

3. I am worried that's grandmother is getting old and crazy (she is quite forgetful, but not actually crazy) and we haven't noticed and she can't cope with her finances any more and may also be writing large cheques to cat charities and donkey sanctuaries.

My family is not very good at talking about things like feelings, but my grandmother is coming to visit in a week and a half, and I'm wondering whether or not to talk to her about it, and if so what to say. I don't want to seem insulting or ungrateful. I want to reassure myself about her reasons and that she does still have enough money for herself. The other alternative is writing back to her for her to receive before she comes to visit.

[worms]

Not sure what is best, but I think I would discuss it in person rather than in a letter.

As an aside, you should keep a careful record of everything and think through whether there could be an  Inheritance tax implication of these gifts.  She can only give gifts to a total of £3k per annum unless these are regular payments from income which exceeds her outgoings.  If she doesn't survive for another seven years, IHT might be due (if her estate is worth more than allowable limit).

[Catbert]

When she visits assure* yourself that she seems mentally competent and remembers when she sends you money.  Also ensure* that she knows you'll continue to visit and write regardless of the money.  Then cash the checks, thank your grandmother and keep your mouth shut.    Assuming that she is competent and solvent this may her way of "rewarding" you for being close to her.  When she dies the remaining money will be divided equally.

I have no children and if DH predeceases me money will be divided among step-children from my first marriage and my sisters in a formula (i.e. all step children treated the same, sisters treated differently than step-children but the same among themselves).  In the meantime I've handed out gifts.  Sometimes its an equal check to my step-children or step-grandchildren.  Sometimes its a one-off gift just because...because they got on honor roll, or graduated college, or because they did something nice for me not expecting anything in return or maybe because I want them to get a driver's license.

*Sorry, I use to know when to use assure, ensure, insure but it's gone now.   

[pbkmaine]

Say "Thank You!"  If you are worried about it, you can simply put the money she sends you aside in an account. If she ever needs it, you can send it back to her.

[pagoconcheques]

Consider opening an investment account and putting most of her gifts in there.  Pretend you never got the money.  On the odd chance that she needs financial assistance when she is old, you can use that.  Otherwise, use the savings toward a house and invite her to visit once you move in so you can tell her the story. 

[Cassie]

I agree about putting the $ in an account & save it in case your Grandmother needs it. That way you don't have an uncomfortable conversation, don't insult her & still have her money to help her if needed. Win, win for everyone.

[Apples]

Have her letters shown any change in mental abilities?  Does she not remember previous events?  Something like the exact timing of driving lessons my grandparents probably wouldn't remember on top of their own schedules, but can she keep holidays/birthdays/etc. straight?  How is her handwriting-better or worse?  Those types of things.

I definitely wouldn't tell my brother about the large increase in sums of money.  Whichever parent is the child of this grandma, I would tell you started getting checks with every letter-is grandma ok?  Depending on how touchy of a subject money is within your family, could you pretend it's 50 euros instead of 1,000?  And frame the conversation as a worry that she's changed her habits, not that woohoo grandma's giving you more money.  I can understand your worry, I would be worried in this situation too since she's on her own and has suddenly started writing very large checks.

[GardenFun]

Have her letters shown any change in mental abilities?  Does she not remember previous events?  Something like the exact timing of driving lessons my grandparents probably wouldn't remember on top of their own schedules, but can she keep holidays/birthdays/etc. straight?  How is her handwriting-better or worse?  Those types of things.

I went through this with my step-grandmother.  Starting getting birthday cards on our anniversary, then a birthday card on the actual birthday, but then another birthday card two months later.  She lived numerous states away, therefore a quick face to face meeting wasn't possible.  I informed my father and he confirmed (via phone call) that something wasn't right. 

Talk with her.  Ask some current event and past event questions.  If she answers these quickly and correctly, and there is no other noticeable issues, then she is in a sound state of mind.  Cash the checks.  It is what she would want you to do. 

[cpa cat]

Talk to her during her visit. Make sure she remembers the gifts and seems of sound mind. Maybe re-iterate to her that she over-funded your lessons and ask her if she'd like some of the money back (it's pretty much guaranteed that she will refuse to take the money back, but it'll give you a good opportunity to gauge her reaction).

If she does seem to be on top of things and is giving you these gifts to be generous and appreciative of your close relationship, then the right thing to do seems to be to accept the gifts.

I can't really imagine what it would be like to be 87 years old and not be "allowed" to give something a little extra to my favorite grand child. Your grandmother isn't dead yet, so it's still her money. Your mother doesn't really have the right to flip out. In fact, you're expecting such a negative reaction from her that you're afraid to speak with her about this. GardenFun pretty well illustrated the kind of conversation that should happen in this situation. It's possible that your mother's abnormally negative attitude about your grandmother's money is coloring these gifts as something bad or wrong that you should feel guilty about - when really they're just gifts, given with a spirit of generosity.

[Lyssa]

Sorry for feeding your concerns but forgetting about money already given and unintentionally giving different amounts to me and my brother was how dementia first showed in my grandaunt.

The most important thing in is to assure that she is not taken advantage of by both strangers and family. Are you close enough that you could talk to her about A POA for banking business?

[shelivesthedream]

Thanks for all the responses so far. Just to clarify, this is an MMM forum - of course it all goes in investments accounts already! (unless it's for something specific or I buy myself a small treat like a book) Not in a grandmother-specific account, though, which is an interesting idea.

It's not that I think she's not 'allowed' to do what she wants with her own money - I just want to check she's doing it for the right reasons. Not because she thinks she has to, or because she's old and confused, or even because she thinks I need it because I don't have enough money. If it just makes her happy, that's fine.

Regarding the rest of my family, I reckon my brother might be a bit miffed but would probably be OK about it (he knows he's not the most dedicated/reliable grandchild). But this grandmother is my mother's mother, which is why she would feel emotionally involved. Any flipping out would be more about my relationship with my mother than her relationship with hers - about me 'being mean' to my brother or trying to get one over on him. This is why it's such a powder keg. And if I ask my brother it will probably get back to my mother, by accident.

It's a good idea to focus on her mental state generally, not just the money. We know she's a bit forgetful and repetitive (asking you which day your train is multiple times) but she lives alone in a granny flat (block of old people flats with a manager on call 24/7) and cooks, cleans etc for herself, so she's still pretty independent for someone her age. And having seen my great uncle spend his last years in total denial, she is pretty realistic about ageing.

As for talking about the money... Hm... I can't really say anything outright but I guess I can thank her again for the unusually large amount she has sent me lately and maybe reassure her that I have enough money to live on anyway. It might work to talk to her about investments, actually, I hadn't thought about it like that before. She doesn't believe in index funds (probably because management fees were so high when she started investing) so has a self-picked portfolio of dividend stocks. That's how she has so much money to give away in her old age!

Any other thoughts, I'd love to hear them.

[worms]

Definitely discuss POA with her and the rest of the family, it makes so much difference in many ways that are difficult to envisage in advance. 

I still say IHT and open-ness.  If someone takes a retrospective look at her bank accounts, the payments to you will become clear to your family and it will look as if you were trying to hide something.

Have you tried to talk to her about her finances? It may surprise you.  My grandmother loved to talk about her shares portfolio.  In their later years my parents were grateful of the reassurance they got from someone else confirming that their decisions were sound and taking on the burden of the tax forms.  This sort of chat is better at her house where she has all he paperwork.

[chasesfish]

I agree with the other posters, you should write back and continue to visit and let your Grandmother know that you appreciate her gifts, but are doing okay financially and its not something you need.

If she wants to continue giving it to you, then go ahead.

I've watched a distant great aunt give away $1+mil before she passed away instead of leaving it for inheritance.  She said she'd rather see her nieces and nephews enjoy it while she's alive.  It paid for a few college educations and paid off other houses.

[worms]

If she wants to continue giving it to you, then go ahead.

Totally agree...her money, her choice. 

Only problem is that in UK (where OP and granny live), on granny's death, HM Revenue & Customs might want to look at what she did with all her money during her last seven years, to see if the estate is liable to Inheritance Tax.  If she has to be admitted to a care home, the Local Authority will want to check that she hasn't given all her money away just so that the state can meet her care costs. 

All this means that sooner or later someone (normally a family member) will take a long look through the bank statements to be able to provide the necessary figures.  Families can easily get needlessly torn apart when they suddenly find out that one relative has been getting extra help over a period of years. 

You can't predict human greed and emotions, but in my view if families are open about money during their lifetime, there are less likely to be family disputes over inheritance issues.

[okits]

Some good responses already but here are a few other ideas:

- "forget" to cash the cheques.  No one can accuse you of taking advantage of her in this case, and you don't hurt her feelings if you "forgot"

- contact your brother and say, "grandma sent me a cheque that I think is meant for both of us."  If he also got a cheque he could speak up then and your conscience is clear (at least with regards to equal monetary gifts.)  If he didn't get his own cheque you started the conversation with saying he is meant to get half so he can hardly complain (nor your mother).

Personally, I would make sure she is still of sound mind and meant to give you the money, then put it in a separate account in case she ever needs it.  If you're able to designate it a joint account with her name on it that makes it pretty clear to other family members that you were keeping the money for her, especially if you make no withdrawals, only deposits.

Hope your grandma is truly okay, and congrats on being in touch with her.  I'm sure your regular letters mean a lot.

[aschmidt2930]

Assuming you verify she still has her mental clarity, I would thank her, and accept the gifts.  Definitely would use some of it to go see her an extra weekend though.

[Lyssa]

Some good responses already but here are a few other ideas:

- "forget" to cash the cheques.  No one can accuse you of taking advantage of her in this case, and you don't hurt her feelings if you "forgot

I would under no circumstances go down that road. If she's still sound 'forgetting' is going to insult her and lower her opinion of the OP (at least if she's anything like my older relatives). If she is indeed in the early stages of dementia that's one more reason to cash the check and either put into a real or virtual 'granny account' in case she ever needs it back. You may not take advantage of old and sick people but there are others actively looking for wealthy people in the early or not so early stages of dementia...

[shelivesthedream]

Argh. It's got both better and worse. The letter with the last cheque was a quick 'must catch the post' note. Today I got a follow up one with a P.S. - "Please cash previous one, no need to mention it." Which is kind of reassuring because she's presumably not suddenly gone old and crazy, but does suggest secret divestment of wealth to me only.

My husband and I have discussed that if living semi-alone does become too much for her at a time when we have a spare room (hopefully in two years) but not so much that she needs actual care, she is welcome to move in with us, presumably as a transition to a nursing home. She is the only family member we would ever allow to live with us. If we had done this already, I would have no problem having 'extra' money from her. (And, I think, nor would my mother as there would be a reason for the disparity.) But we haven't mentioned this to anyone yet, partly because we are not currently in the position to offer such an arrangement and partly to avoid being seen to angle for favour which we might not follow through on.

I am aware of the general IHT rules, but had not thought to keep specific records. To be honest, almost no one else writes cheques to me ever, so it would be fairly easy to work out from my bank records: it's any cheque paid in that I cannot specifically account for otherwise. If it does come out after her death, I will claim total ignorance that my brother was not getting the exact same treatment and will hide until the fallout is over. I would be happy to 'pay my brother back' anything he didn't get while she was alive from my share of the inheritance. He would no doubt refuse this, but it would show good faith to my mother.

I am 90% sure my mother has POA as I remember so big will-related thing a decade or so ago that can only have been that, though I was too young to be involved at the time.

I think my plan is still to reassure her (subtly!) that I am not in any financial hardship (maybe discuss the stash!) and that she does not need to send me anything. If it's totally her own choice then that's fine. I wonder if I can somehow get some information out of my brother, though... It might put my mind at rest.

[shelivesthedream]

Also, just to clarify two specific things:

1. There is no way she would end up in a state care home. Most likely would do what my great uncle did and get a live-in carer (he had one for the last three years).

2. I would never dispute whatever the inheritance arrangements are with any of my living relatives. I would rather give up all rights to any money than turn it into a family fight. I am more than happy to use my portion of the inheritance to 'even out' any 'unfairness' between me and my brother if it keeps the peace. If my grandmother were to be looking down on us, morbid though it seems to think about it, I'm sure she would be much more upset to see that family torn apart than to see me not getting my 'rightful' inheritance. Because you know what? I'd rather have an alive grandmother than any amount of money so would be happy if she spent every last penny on care and I didn't get a bean.

[worms]

Glad to see that you have such a good attitude to all this and hope it is reciprocated by the rest of your family.

My comment about care costs was not so much about a state care home as about state support to nursing costs while in a private care home.  When my parents needed care, there was a Social Work assessment of their support needs and a state contribution to nursing (but not living) costs.  It is possible to keep clear of this by refusing to fill in the forms and meet all the costs, but to be honest care costs are so high that any contribution is welcome. In our case, £890 per week each (a total of about £92,500 per annum) was reduced by about £100 a week each to take account of nursing costs.

Edit: just to add I am in Scotland where the details of the rules are slightly different from England, but I think the same principles apply.

[patrickza]

I would also put it in a separate investment account. If you mix it with your general investments it'll become very complicated to keep track of the value she has given you, should she need it back one day.

[GardenFun]

Great news regarding her mental clarity!  She absolutely knows what she is doing. 

As far as the guilt...that is a tough position, because it is personal.  It is evident that you love your grandmother, you love your mother, and you love your brother.  If your grandmother was distributing seed packets, would you feel the same guilt?  Darn, my brother only got two seed packets and I received three - because she knows I like to garden plus I send her produce.

My husband and I live hundreds of miles away from his parents.  His two brothers live close to his parents and help out more than we can.  He fully expects his parents to reciprocate favors, whether through financial means or giving of their time, such as watching the kids for date night.  He doesn't feel like he is cheated out of some inheritance over the non-equal distribution.  His personal opinion of the situation is contentment. 

You are concerned that if the extra money is discovered, your brother and mother's personal opinion of the situation will be different than your grandmother's wishes.  Is there anyone outside of your grandmother who knows both your mother and brother well enough to give constructive feedback?  Maybe an uncle or aunt?