Joint inheritance moral and logistical dilemma.

Geriatricmum

Hi all, I'm hoping I can get a little steer on how I could possibly handle this situation in the future. 

My dad and sister moved to Spain in 2017, my dad is retired my sister works there. We were born in London but both my parents are Spanish so we have Spanish and British citizenship. 

I live in Scotland.

My mum still lives in London but is planning on retiring to Spain in July this year.

Assets: two flats in Spain which are rented out. One flat in London which is also rented out.

My sister and I are not close... I won't go into specifics but I do not want to be financially tied to her after my parents death and requested that they split the properties in their wills so my sister gets the two in Spain and I get the flat in London. They have not done this and insisted that all properties are split 50/50. The will for the property in London is now drawn up, they are currently in the process of writing a will for the Spanish properties.

I was hoping to continue renting the property in London and use it to finance a self build for my families forever home, I take it I can't do this without her being involved in the remortgage process?

My sister has slight learning difficulties and as a result has been babied by my parents her whole life. She has never been allowed to financially manage anything, for example she's never set up any bills or paid for them herself. My parents manage her money. 

My sister and I have different priorities. She is single and child free, I have three children and want to use my portion of the inheritance to cement my children's financial future with the benefit of a comfortable retirement.

I am thankful to my parents for building a strong foundation for our inheritance but I suspect they have split the assets like this with the expectation that I will solely manage them and just give my sister her financial portion to live off every month. 

Will it be difficult with her living abroad to manage the properties and divide the rental income between us?
Will we need a joint account? 
Can I manage the properties with minimal contact with her and no requirements for her consent on any decisions I want to take with regards to the properties? 

It would be good to get others experiences if they have been in similar situations.

Thanks in advance for any responses! 

elsien

If the properties are owned 50-50, you couldn’t do anything without her consent.
Even if she agreed to give you power-of-attorney for the properties, you would still need to discuss options with her unless she clearly said no, do what you like. 

Is this not a conversation you can have with your parents? That you are not going to take responsibility for your sister’s finances in the same way that they have and the plans they have made are going into lead to difficulties for the both of you? 

Actually, I think it’s a conversation that you must have with them. So rather than suspecting their intentions, ask them straight out and let them know where your boundaries are.

Pollycat

There is no inheritance until someone dies.
Your parents are both alive.
You really have no right - either morally or legally imho - to ask your parents to do anything with their money and assets in their will.
They appear to have written their wills to dispose of assets as they wish.

It's possible (and it has happened) that if one of your parents die, the living one may meet someone else and totally change their will.
Don't count your chickens....

However, it's clear that they have discussed the contents of their wills with you.
Did you voice your disinclination to be financially associated with your sister at that time?

Flugelhorn

the problem with them changing their wills to the way you wish is that they could sell the London flat and leave you with nothing or they could sell the spanish flats and leaver her with nothing.

sounds like a sizeable estate, unless they have made other arrangements the exec may have to sell at least one property to fund IHT

itsthelittlethings

Maybe you should sell all the properties if and when you inherit them, your sister can buy a place to live in (I guess she may need some help with that depending how severe her learning difficulty is) and then you use the money to set yourself up as a landlord to finance your little self build project?

Geriatricmum

Thank you for your response @elsien. I try to talk to my parents about it regularly. They are in denial about her situation and they are not aware or in denial that they are setting her up for a fall when they are no longer around and she is living alone. My sister lives with my dad and eventually also my mum when she moves over to spain. She has never lived alone. I even protested at the signing of the will. 

It might sound selfish but I do not want to take over the financial management of my sister when she is alone. I have had young children later in life and am currently in the thick of it I don't want to baby an adult when I'm in my 60's. She will be thrust into the deep end and don't know what will happen to her.

I have thought about walking away and telling them to give everything to her. This how concerned I am about the mental strain of having to deal with her. 

I will look up power of attorney. I take it this is something that can be applied to the flat in London so I essentially take control over her half of the property? Can I borrow against the flat without her having to be on any remortgage? 

Geriatricmum

Pollycat said:

There is no inheritance until someone dies.
Your parents are both alive.
You really have no right - either morally or legally imho - to ask your parents to do anything with their money and assets in their will.
They appear to have written their wills to dispose of assets as they wish.

I understand that and have just expressed my wishes as I also want to live my life the way I want to. 

It's possible (and it has happened) that if one of your parents die, the living one may meet someone else and totally change their will.
Don't count your chickens....

Unlikely but yes I am not counting any chickens. I am asking for advice and opinions on the likely outcome. I may also die tomorrow and this won't be an issue anymore! 

However, it's clear that they have discussed the contents of their wills with you.
Did you voice your disinclination to be financially associated with your sister at that time?

They are aware I do not want to be financially tied to my sister. They have ignored this with regards to their assets but as you have stated that is their right. 

Geriatricmum

Flugelhorn said:

the problem with them changing their wills to the way you wish is that they could sell the London flat and leave you with nothing or they could sell the spanish flats and leaver her with nothing.

sounds like a sizeable estate, unless they have made other arrangements the exec may have to sell at least one property to fund IHT

Yes. I'm starting to do my research on all of this because tbh I haven't really thought about it until now as I am trying to be a bit more financially aware myself.

They won't sell the flats this is their income in retirement.

I have mentioned transferring the flat over to me now to avoid inheritance tax but that was met with a blanket no. 

I'm not sure how inheritance tax works in Spain.

Keep_pedalling

Pollycat said:

There is no inheritance until someone dies.
Your parents are both alive.
You really have no right - either morally or legally imho - to ask your parents to do anything with their money and assets in their will.
They appear to have written their wills to dispose of assets as they wish.

It's possible (and it has happened) that if one of your parents die, the living one may meet someone else and totally change their will.
Don't count your chickens....

However, it's clear that they have discussed the contents of their wills with you.
Did you voice your disinclination to be financially associated with your sister at that time?

That a is little unfair, I think the OP is rightfully concerned that under the current will he (and his sister) could end up with a major financial mess and major sibling bust up. Leaving your estate so that both siblings end up jointly owning property in two different countries is asking for conflict and potentially major tax implications. 

A will that stipulates that the properties should be sold and the proceeds after tax be distributed equally would be better or if the values are roughly equal UK property to UK based sibling, Spanish properties to Spanish based sibling.

We have seen a lot of threads here where siblings are battling over property (some wanting to keep the others wanting to sell) . I think the parents need professional advice from both the UK and Spain. 

p00hsticks

Geriatricmum said:

I will look up power of attorney. I take it this is something that can be applied to the flat in London so I essentially take control over her half of the property? Can I borrow against the flat without her having to be on any remortgage? 

Power of Attorney doesn't sound appropriate here - it gives you the authority to handle someone's financial or welfare needs on their behalf, but you must always act in their (not your) best interests and (unless they have lost their mental capacity) follow their wishes. It would create more ties to your sister and additional responsibilities for you and it doesn't seem as if that's what you want. 
 

Flugelhorn

I think underneath this the real problem is what is to happen to the sister - suspect your parents are just assuming that you will carry on as they have done - sorting her finances etc etc - and understandably you don't want to & definitely don't want your finances entangled . It can be a big burden if you are not emotionally close to someone  and while she may accept her parents doing all this - would she be happy with you doing it anyway?