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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

More a WWYD re- Parents and money

120 replies

PyongyangKipperbang · 04/04/2022 23:19

Been at work and thinking about it all evening.

My parents spoke to my sister and I recently about how they want to gift us some money. They are planning on giving me enough to may off my mortgage (2 years to go on a small mortgage) and the same to my sister to cover the house improvements they need or to go towards their mortgage (not long moved so a lot longer to run).

The thing is, my sister and I really dont know whether to take it. It feels wrong but I cant work out why.

The are doing equity release which straight away we didnt like but they are doing it through a specific scheme which is not one of those "back pages of the Daily Mail" jobs, the numbers have been crunched and they will still have a sizable ownership of their house and it isnt as dodgy as sister and I first thought. Their reasoning is that they would rather us have some of our inheritance now when we need it (I lost my job due to covid and need to retrain to earn anything more than NMW and my sister has had to "downsize" her career from management due to covid too).

But.......it just feels wrong! I know that my mother especially would feel a lot happier knowing that we are financially secure. I would own my house outright which would mean that whatever happens I would be housed if nothing else. My sister would have the pressure taken off in terms of finding money for house improvements that are desperately needed and they could afford when they bought the house just a few months pre covid. Security is a massive thing for my mother and knowing we had that would help her sleep at night.

It never occurred to either of us that they would do this so we are both in shock. I think they expected more of an enthusiastic reaction but we were both quite reserved, I explained it wasnt because we are ungrateful but that we have some doubts and feel a bit wobbly about it all.

The irony is that if I could do this for my adult kids I would in a heartbeat so I totally understand where it is coming from. My sister is childless not through choice but I know she would do it for my children who she adores.

I am just so torn!

And yes, I do think pride is a big part of it for both of us.

OP posts:
Original poster
PyongyangKipperbang · 04/04/2022 23:21

And before anyone asks.......We did ask about tax implications etc and they have checked and due to the size of their estate, IHT would not be an issue.

OP posts:
Stillfunny · 04/04/2022 23:24

My parents did this type of thing fir me and my siblings . It was a bit overwhelming. But they said that it gave them great pleasure to see the results of our inheritance before they passed away .

Original poster
PyongyangKipperbang · 04/04/2022 23:27

@Stillfunny

My parents did this type of thing fir me and my siblings . It was a bit overwhelming. But they said that it gave them great pleasure to see the results of our inheritance before they passed away .
Overwhelming is a very good way to describe it.

But, as with your parents, they worked and saved for years with our inheritance in the back of their minds and it would give them huge pleasure to know that we had this before they passed away. I should add that they are in their v early 70's and no reason to believe that either of them wont live at least another 20 years.

OP posts:
StCharlotte · 04/04/2022 23:35

Ah OP, swallow that pride and make your Mum feel good Smile

My PILs have given us money over the years, their reasoning is they enjoy seeing what we all do with it now rather than when they're gone. This time round we've had some work done on the house and BIL & SIL have booked a trip to celebrate their 60ths.

patternsg · 04/04/2022 23:36

Have they got enough money for potential care?

ComeSailAway · 04/04/2022 23:41

They want to see you enjoying the money while you are young enough to need it.
Let them do this for you.

Another point is that you may find your inheritance is sold to pay for care home fees if needed in future. Your parents would rather help you out.

SquirrelG · 04/04/2022 23:50

I think it's a great idea. If parents can afford to help our their children at the time when they need some help it's a brilliant idea. Don't feel bad about it, it's what they want to do and it will make them feel good.

nokidshere · 04/04/2022 23:50

It never occurred to either of us that they would do this so we are both in shock. I think they expected more of an enthusiastic reaction but we were both quite reserved, I explained it wasnt because we are ungrateful but that we have some doubts and feel a bit wobbly about it all.

Why do you have doubts? Do you doubt that they are intelligent enough and/or have capacity? Do you think they are being scammed? What does 'feel wobbly' mean?

Personally if it's 'none of the above' I'd say thank you and enjoy it. They have obviously thought it through and feel that this is the thing they want to do. To 'feel wobbly' about it is quite patronising.

Equity release schemes are the same as any other mortgage, the only difference is that it doesn't get paid back till they die.

Blossomtoes · 04/04/2022 23:54

@patternsg

Have they got enough money for potential care?
That’s the real issue. Local authorities can go back any length of time to check for deprivation of assets. If there’s enough equity left in the house to reasonably cover potential care costs (currently around £1k a week), they’ll be OK.

If you’d do it for your kids, there’s your answer @PyongyangKipperbang.

violetbunny · 05/04/2022 00:53

Are there any strings attached? Are they expecting you to fund care or housing in their old age should they require it?

Original poster
PyongyangKipperbang · 05/04/2022 01:01

I asked about care home fees and their financial advisor (a very trusted independent who has looked after their investments very well for many years) has said that it will be ok with the amount they are looking to release. However, I will push for actual figures on that.

I say "feel wobbly" because my sister and I have always been on the same page that they have worked and saved for years to have a nice life. An example.....my mother LOVES M&S cottage cheese but didnt buy it as it was so much more expensive than where they did their shopping. Now its all she buys because we both said "what was the fucking point in doing all that 'for our retirement' if you wont buy and do what you want?!"

I suppose we would rather they took the money and spent it on a world cruise or botox or.....I dunno.....a sex dungeon :o I think we both just want them to enjoy the fruits of their labours instead of giving it to us.

OP posts:
Original poster
PyongyangKipperbang · 05/04/2022 01:03

Also.....my sister and I didnt fall far from the tree in terms of security. So, although I cant speak for her, I worry that we take this money and shore up our own futures and then something happens where they need it and we cant give it back.

OP posts:
CharSiu · 05/04/2022 01:07

The equity released has to be repaid with interest, depending on the scheme you could end up with no inheritance or a drastically reduced amount so take the gift, plus it will give your parents pleasure.

My friend is doing equity release but she has no children and really doesn’t care about leaving anything behind.

fallfallfall · 05/04/2022 01:13

my mom really wants to see me and my brother and the grand children glow at receiving our inheritance in our lifetimes. at a time when we can say thank you and share some of the joy of the gift.
care home fees where i live are based on income not savings and private or not it's the same buildings same staff and same food so no benefit to being a paying private resident in a care home.
should things change in the next 10 years, i would be willing to help financially on a monthly basis if need be (she's 90).

Original poster
PyongyangKipperbang · 05/04/2022 01:13

@CharSiu

The equity released has to be repaid with interest, depending on the scheme you could end up with no inheritance or a drastically reduced amount so take the gift, plus it will give your parents pleasure.

My friend is doing equity release but she has no children and really doesn’t care about leaving anything behind.

We asked about that too. They are very cautious. The figures they are talking about would be 25% or less of the total house value and they are being very careful about interest costs. At this stage, if the figures dont stack up then they may very well not go through with it, and I am certain that they would back out rather than see a (say) £200k home end up in the hands of an equity release company for the sake of (say) a £50k loan.

They wont go through with this if they think that it will leave us with no inheritance, not that my sister and I care about that, neither of us is considering anything from them in our future financial plans. We are both very well aware that it could all go in care home fees so have never assumed anything.

OP posts:
ImOnTheRoadAgain · 05/04/2022 03:43

Don't do it!

My parents did equity release.

When they got very elderly they needed to sell up and move near me so that I could care for them. They didn't have enough money to buy a new property!

Notthisnotthat · 05/04/2022 03:50

I would not do an equity release. A family friend did it similar percentage and when she passes away there will be nothing left over from the house sale.

AgentProvocateur · 05/04/2022 04:33

I think it’s fair enough of your parents have savings that they want to give you.

But not equity release. If that’s the only route, they should downsize and give you some equity.

converseandjeans · 05/04/2022 04:41

I have read bad things about equity release & how you end up with almost nothing left.

They would be better downsizing and giving you some of the profit. Or transferring the property into your & sisters names.

I think if they had money spare then that would be different. I understand they want to treat you & help out but I don't think they can afford to.

ThinWomansBrain · 05/04/2022 04:51

a few years ago my sister and I moved my father to live closer to us because he needed more care/contact.
His recently widowed neighbour was in tears at one point because she wasn't able to move closer to her son - when I chatted to her, she explained that she couldn't sell the home and move because there was an equity release in place on it.
No idea of the detail - but may be worth checking out the position should they want to move - to downsize or be closer to you or your sister at some point in the future.

ThinWomansBrain · 05/04/2022 04:57

they worked and saved for years to enable you and your adult sister to live beyond your means.
Nice.

tkwal · 05/04/2022 05:10

IHT may not be an issue for your parents but income tax could be for you. Your parents are allowed to gift as much as they want but if it's more than £3000 per person per tax year the recipients will be liable for tax on the excess. It must be declared on your tax return so if you're on PAYE you will have that added complication too

Undertheoldlindentree · 05/04/2022 05:12

Surely down-sizing is the option that would provide most security here? They could give you and your sister some equity now, but still retain flexibility over where they live in the future.

Sweepingeyelashes · 05/04/2022 05:46

I would never do an equity release loan - the interest on that equity release loan could go on compounding for twenty years if they live into their 90s. I can't see that there would be much equity left to inherit or to fund a slightly better care home or indeed any care home.

RedDots · 05/04/2022 06:13

@tkwal that is not the case in the UK

I would be very wary of doing equity release in these circumstances

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