Best way to manage inherited property

[Plumviolet]

Hi, I'm at a massive crossroads and don't know which path to take. I have recently been made power of attorney as my dad has Alzheimer's and my mother is not coping with the management of their affairs. I am one of four children and the main responsibilities have fallen to me as I live next door and see them every day. My other sibling are scattered around a few hundred miles.

My parents are in their seventies and have done well for themselves with regard to property, they currently have their home (where they currently live) and three other properties in the uk which are rented. No mortgages on any and the combined value of the properties is around 2 million.

My mother wants to leave their estate to her four children equally.

No one would want to live in them after my parents pass away but would like to continue renting them and getting an income from them going forward, if possible. How do we do this?

Should we start a property management company?

Has anyone here done that? Is that a terrible idea?

Why are you worrying about it now? You parents could live another 20 years, peoples circumstances will change and the estate might be a lot lower if the both end up with care fees

I would also recommend your mother goes and gets some inheritance tax advice as their assets are over the joint limit which means the estate would have to pay this

Ok thanks. I think that that is the next step. If we transfer the properties into the kids names now in seven years we won't have to pay tax though, is that correct?

You need to take specialist advice on this

You need to consider deprivation of assets, etc

I managed my father’s affairs through POA for 5 years. It is not as simple as transferring his properties to his children. As POA you need to act in your father’s best interests when managing his financial affairs, not just in a way that best protects you and your siblings’ inheritances. If money is transferred into his children’s accounts it could be seen as theft ( if he has lost capacity and cannot agree to this ). It could also be seen as deprivation of assets if he dies less than 7 years after the property is transferred. I’m probably pointing out the obvious, but you may need to sell a property to pay for his care. Get legal advice as PP have suggested, or get advice from Age Concern. Good luck.

Thanks bob and zebra. Much appreciated. Just lined up a meeting with both my parents. I know things can and will change I just want to find the best path forward for everyone.

Yes, just go ahead and sort yourself out. Don't worry about your dos needing money for care in the future, after all, it's your money, you've earned it and the state will pay for any care home fees 🤷🏼‍♀️

DPs not dos

Helpful. Thanks. Dfod

If we transfer the properties into the kids names now in seven years we won't have to pay tax though, is that correct?

No it’s not correct. The assets will attract CGT. If your parents tell then receive income from the assets, you’ll also face preowned asset tax, IHT and CGT. You’re approach is so simplistic that funnily enough HMRC have anticipated it and outlawed it in a punitive manner. Take some proper advice.

It isn't as simple as that unfortunately. As others have said, there will possibly be Capital Gains Tax liability, a consideration of deprivation of assets for care costs etc. You need to seek specialist financial advice.