Family inheritance and property

To me you guys are opening yourselves up to all kinds of hurt feelings and possible disputes over fair valuations.

If it was me, I would leave each child 50% of each property. At the time of death, a determination could be made on what to do with the property. Should it be fixed up and sold, sold as is, or perhaps one party could buy out the other party. I would not recommend entering into a joint ownership for a long term basis.

From what I am reading transfer of property is the same thing as inheritance if it occurs within 7 years of death. I assume the benefit of transfer is avoiding estate taxes. However, this opens up all kinds of problems. What happens if you transfer a property to a child and that child dies prior to the parents? Then that child's heirs could forcibly remove the parent from the property.

All I can say is the estate tax laws in the UK are horrible!

I am assuming since they are divorced that their property is not under any joint ownership.

My opinion is this:

Each of your parents should divide their own property as they individually see fit.

Your mom should not plan her estate based on your dad's property, since she has no control or authority over his property. Same goes for your dad. Treating each estate properly (separately) is the best way to do this and avoid complications later.

Also, I applaud your attitude in the situation, but it is not relevant to the fairness of the outcome. They could give you nothing (or everything) and that would be fair. It is their property to give.

The simplest way to be sure of fairness is to just sell the properties and split the proceeds. There are of course potential problems with that: closing costs, sentimental attachment, information asymmetry, etc. The way to deal with that possibility is with the following condition: either person can present the other with a price and require the other to buy or sell at that price (or possibly plus or minus some agreed upon spread). To be clear, the first person decides on the price, the second person gets to decide whether to buy or sell. So, let's say you get the property appraised for 100,000, and your sibling gets an appraisal for 120,000. If you think that either appraisal is just as likely to be right, you can propose a 110,000 valuation. But if you're absolutely convinced that your appraisal is correct, and your sibling is absolutely convinced their appraisal is right, the way to settle it is to say "Okay, if you're convinced that it's worth 120,000, then you should be willing to buy my half for 50,000". If you sibling doesn't have 50,000, and can't get a loan for it, then you should be able to put the property on the market. Conversely, your sibling should have the right to demand that you sell your half for 60,000. This makes it in both party's interest to get the best appraisal number they can: if you had found a really bad appraiser who gave a value of 160,000 and you had presented that price to your sibling, your sibling could then say "That's too high. Instead of buying your half for 80,000, I'm going to sell my half for 80,000". There are still possibilities for hurt feelings, but it should be minimized.