Inheritance- property ownership

[Copenhagencatty]

My elderly DM lives alone in a large house. She is still fairly independent and in good health for her age. In addition to her home, she owns two other houses which are rented out. She is not interested in downsizing or moving into sheltered accommodation until absolutely necessary.

I have 3 siblings. Under the terms of DMs will, which she shared with us all openly after our DF died, we inherit one house each.

DM’s properties are as follows:
Property A - her home - worth approx £2 m - earmarked for sibling 1
Property B- rental worth about £600K - earmarked for sibling 2
Property C -rental worth £650K - earmarked for sibling 3

Under the will, the properties will be independently valued, and DC 1, who inherits the more valuable property, will pay equivalent amounts to the other to siblings to make it even. There is quite a lot of cash/shares in the estate, so they may be able to pay these amounts without selling the house or other assets.

Recently, DC2 (who lives in another country), considered moving back to the country where DM lives to be closer to her. They mentioned living in the house that they will eventually inherit as the tenant recently moved out and the house is currently empty. DC1 & DC3 both agreed that DC2 should probably pay Market rent - although DM doesn’t need the money, it seemed fairest.

DC2 applied for a job in the country where DM lives, but this recently fell through so they have postponed the move for now and the property has been rented out again.
Despite having an agent to handle the tenancy, DM got quite involved in preparing the house for reletting (unnecessarily so perhaps) and mentioned that she found it stressful.

DC1 is concerned that DM has too much on her plate and has suggested that DM signs over the houses to the three DC now. This would mean that DC2 & DC3 can assume responsibility for the tenants, receive an income (Dm does not need the income) and DC2 could also live in the house rent-free if they decide to move back. This seems a fair arrangement and DM will no longer be responsible for managing the property taxes etc. The U.K. issues around deprivation of assets etc would not apply.

DC2 is not happy with the idea.

YANBU - DC1’s suggestion is a good one
YABU - DC2 is right to object

Despite the poll, I am actually DC3 and feel caught in the middle.

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.

I’m trying to understand whether DM (or anyone) benefits from this plan.

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.

DC2 seems convinced that it undermines DM’s autonomy & independence. They are also adamant that the only person who would benefit is Dc1 - but I don’t understand how DC1 benefits? We are all POA.

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?

I think it was something along those lines, yes.

DC2 is very suspicious of DC1.

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.

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

The will reflects the fact that DM is sentimental about the properties and hopeful they will stay in the family.

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?

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.

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.

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.

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

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

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.

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!!

@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.

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.

I agree

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