Inheritance- property ownership

I agree, speak to a lawyer about this. And speak to DM about estate planners.

I agree

As pp's have said you need independent advice.

As a suggestion though if your mother is sentimental about the properties and wants to keep them in the family a fair solution would be to leave all 3 properties to the 3 children (so they own a third of each).

This would mean any increases/decreases in value were shared across the portfolio and all 3 have a vested interest in supporting your mother to maintain each property to the same standard.

When they inherit the children will have the choice to buy each other out of their respective shares at market value assuming there is an agreement about who buys which house but I would hope they would follow your mothers wishes on this.

If a sibling moves into a property prior to ownership then they should pay market rent.

DC1 may have their mother's best interests at heart but they are acting in a way that is bound to raise some questions re: their motivation.

@Copenhagencatty I feel that DC1 has a paternalistic attitude to Dm and wants to relieve her of all responsibility. I don’t think they realise that it may seem like overstepping. Sorry, but I actually see this as sibling one being materialistic and would not trust him to adhere to your mothers wishes unless it is written specifically in the will.

if one house is signed over to three siblings then all three houses should also be signed over too! other wise, sibling 1 has a third share of sibling 2's house as do you!!

To be fair, this isn’t something all the siblings are asking for. One of them is actively pushing against it. One has suggested it and the OP doesn’t know what to think hence the thread.

Agree that it would be likely better for the mother if the siblings offered to help with the management and paperwork but no ownerships or monetary values were transferred.

What does your mum want to do...only her opinion matters

She will have zero control over this once the ownership passes.

The caring thing to do here would be for the siblings to offer to take the stress out of managing tenants, repairs etc.

Why the sudden leap to "well she can just give us the houses"?

It's already a fucked up/fragile setup that's been arranged for distributing her estate (honestly, anyone wanting all the cash to balance out such a huge discrepency between house valuations hasn't had to deal with all the legal and logistical faff that's involved!).

Your mother needs to speak to an IMPARTIAL estate planner, and her children need to really look at themselves and figure out what they're actually trying to achieve here.

They say they're trying to alleviate stress from your mum but leaving her in a position where she might need care and has given away all of her housing assets before she's died is mad.

Either be honest and admit being a grabby bastard, or do the genuine caring thing which is to actually be of hands-on help without expecting the estate hand out many years before she dies, potentially.

The whole thing is very distasteful.

I was about to say the same thing as @Talipesmum the changes suggested by DC1 really do leave open the possibility of that happening so that you and DC2 end up with significantly less.

Also, don't forget that if the houses pass to the children now, they no longer belong to your mum and will be excluded from her estate when she eventually passes away.

So, the only thing in her estate will be any money or shares etc. It will be a very complicated process trying to write a will that evens out different gifts given maybe ten years before she dies.

I would very much agree with DC2. Regardless of DC1's intentions, it just makes things so much more complicated trying to write a will to make things "fair" between the three DC having to take into account substantial gifts of different amounts that were made maybe ten years earlier.

Maybe DC2 and DC3 could take over the management of the letting agencies etc without actually owning the properties yet. That way there’s no early money division issues but they’re both helping their mother.

My word I find all this talk of inheritances and clamouring around an elderly person so distasteful. Your mother already has a will, has been open and honest with you all about it and about her intentions with it. That should be enough. Would you be prepared to sign over your house and all your assets to somebody else?

Your mother clearly is of sound mind and good health, if she needs additional support then look at outsourcing some support for her (you could even look to hire an administrator/property manager on an ad-hoc basis) but do not just decide to have conversations about her home and her assets as if she is a child.

If you found a piece of work or a project challenging or tiring how would you feel if your relatives then suggested you just sign over all your money and property (and therefore your rights) and frame it as if they were doing you a favour?

This. The property belongs to your Mum. As long as she is alive that should remain the case.

The Will makes no sense.

Why not just leave her entire estate to be divided between her offspring?

An Estate Planner seems a good idea.

Giving the properties now; not a good idea. They are not of equal value. Also your Mum potentially needs hundreds of thousands for care. So should not give away all her properties unless she has huge quantities in cash. £100k a year for good f/t care, say…

If your Mum finds it stressful to oversee rental properties just push more into the agent. Or one of you help her out.

Does DC2 think that DC1 will say he doesn’t owe as much to DC2/3 later on, since they’ve had the benefit of their houses for longer? Or that DC1 is wanting the relative values of houses to be assessed now, rather than when DM dies, because the price of house 1 is bound to rise a lot more than the others?

My mother recently passed away and she had 2 houses and quite a lot of cash. She left 1 house (of lesser value) to my sister and my brother and I shared a house. The cash was to be split equally . It all became very complicated. Mums aim was that we all got equal and it would be balanced out through the cash. This did not take into consideration inheritance tax, the fact it is quite difficult to reallocate cash amounts without legal intervention. Your mum really needs to get professional advice.

Op said this is not UK so care costs issue is not applicable.

Your mother (if she wants to do this) needs proper professional advice.

If your mother retains ownership of all her assets until her death there is going to be considerable inheritance tax to pay. Could be £1m+

If your mother passes assets to you and your siblings now, then there she would need to live for 7 more years to avoid the same level of IHT.

Regardless of the tax position, if your mother has passed all her assets onto her dc, and if she has a need for care or to go into a care home, then the local authority have no time limit on how far back they can look. If your mother is already elderly then the local authority may consider 'giving away' her properties as deprivation of assets.

Or are you not in the UK?

“DC2 objects because properties in the area are rising in value quickly in comparison to the other 2 properties. If DM lives for at least another 8 or ten years (hopefully!) property A will be worth a lot more than it is now. DC2 seems to think it’s some sort of scam”
But if as per the will all three properties are to be valued at the same time (even if they’ve been signed over early) and child 1 compensates the other two for the difference in value of the houses, then it will still all be fair, just child one will have to hand over more cash to their siblings to compensate for the increased value!

She should think really carefully before signing over properties in her lifetime there are considerable tax consequences both now and on her death.
for example to 2 x rented out properties, she would be liable to pay CGT on the increase in value. Especially if she has owned them a long time this could be very significant. Does she need the rental income from these properties? She needs to be confident she does not before giving them away. The CGT would be due now. If she dies within 7 years of the gift the value would also be included in her estate. So it would be taxed twice, CGT now and IHT on death. If a property is gifted on death there is a tax free uplift for CGT.

The property she lives in should be covered by PPR for CGT but it is not generally a good idea to gift the property you live in. Everything might be a lovey relationship now, but she would be losing her security in her home. If she needed care this could be treated as intentional deprivation of assets.
if she continues to live in it without paying rent then for IHT purposes when she dies the house would still be included in her estate for IHT even if she has survived 7 years because it would be a ‘gift with reservation of benefit’ (GROB). So there would be not IHT benefit in the gift.

your mothers security and protection should be the primary concern. If she is struggling to manage the properties then if she authorised the agents to deal with the children this could be a sufficient solution.

This is not a straightforward situation and she needs expert advice from a STEP qualified solicitor specialising in estate planning. It sounds like there is plenty of cash to pay for this required advice.

Wouldn't it just be easier for the executor to sell the houses when she eventually dies then just split the money, it seems unnecessarily complicated and is already causing bad feeling and shes not even dead yet.