.... to be miffed my parents did equity release without discussing it with the rest of the family? (long)

[tittybangbang]

...... namely my brother, my sister and myself? We only found out after the deal was signed.

Mum (75)and dad (80) live in a good sized detached house in a lovely village. The house needed a bit doing to it and they didn't have savings to pay for new windows/a new kitchen/new cars, although as an ex civil servant my dad has a good index linked pension. So without discussing it with us they borrowed 100K against the house - and the interest on the loan will roll up until the house is sold. My dad made all the decisions and organised the whole thing. My mum just signed on the dotted line. She said to me that she didn't really understand what the equity release involved or the implications for the future - which I'm not surprised at as my dad has always treated her like a child in matters relating to money. She's never earned much and my dad's been in charge of all the household spending. He's said things to me in the past like 'your mother doesn't really understand money'. They didn't take independent advice on equity release - just talked to the solicitor who was working for the company who sold them the product. At one point they did consider down-sizing but my dad said he couldn't consider living in a semi-detached property because he likes his privacy.

I'm worried now that with falling house prices and increasing interest rates they'll end up within five years being saddled with a debt so huge that they simply won't be able to move, and then they'll be stuck in a big house they can't cope with (the garden is a quarter of an acre and they're worn out looking after it), or afford to heat, and has no downstairs toilet or bathroom (a big issue for my mum as she has problems with her joints). It's not such an issue while my dad is alive but if he dies before my mum (more of a likelyhood as he's had several small strokes in the last year) the household income will be halved overnight and she has no pension of her own. I dread the thought of my mum being marooned in that house, unable to get up the stairs to the loo, spending all her pension on getting people to come in to cut their 100 foot hedge and mow the massive lawn, and being too frightened to turn the heating on........ I'm going to have to work full time at some point to service our massive mortage. How am I going to be there for my mum when she needs me? I can bearly cope with my own house and my three children and dog, let alone maintaining my parents property and helping them when they're not able to cope with it themselves, or with living in a house which is not suitable for elderly, frail people but which they're stuck in because there's no money left in the property to buy anything else.

The other side of this that's really bothering me is that I've suddenly discovered I'd been unknowingly harbouring a sense of entitlement over my parents estate, and I feel really ashamed about it. I left home early (at 18) and haven't expected or had have much help from them in financial terms over my adult life. I've always felt that this was the way things ought to be - that you shouldn't expect to get money from your parents and should go out and shift for yourself. That's why I feel ashamed when I face up to how resentful I now feel since it's dawned on me that if things proceed the way they are now, I'm likely not to get a bean when they die - the entire estate will be sold off and the money will go to the bank to pay the extortionate interest on the loan they've taken out. I'm thinking - you don't have any right to anything, but then I think about how I feel about my own children and how gutted I'd feel about my entire estate being handed over to the bank on my death.

Maybe also I feel more upset about it now as I've had worries about money over the past six months - a health scare (that hasn't quite resolved) that has really made me worry for my future, plus a whole load of unavoidable expenses that have put a strain on the family budget. I should say - we're not poor, but we're like many families in the UK right now: big mortgage, big household bills and only one income.....

It's stirred up other thoughts as well that I feel really uncomfortable with. I can't help comparing my parents behavior with that of my inlaws, who were less well off and lived in a smaller house, but who saved for all their 4 children so they were all able to afford the deposit on a house when they left home. My parents never saved anything for me, and didn't encourage me to save either. I must be the only person I know who never even had a post office account as a child..........

Oh dear - does this all sound really moany? I think the worst of this whole thing is that it's given me negative feelings about my beloved parents - particularly my dad. I should be treasuring the time I have with them now not feeling resentful and hard done by.......

Sigh.

Any words of wisdom anyone?

if your Dad dies your mum can (presumably) sell and move somewhere more manageable and pay off the mortgage.

It isn't a pleasant experience to realise as an adult that you are expecting your parents to provide you with a windfall profit to ease your way in the future and that you might resent the fact that they don't see their money the same way. I can see that would unsettle you, it isn't comfortable revelation to have.

I hope my mum uses the money she has in her house to enjoy her life for as long as she can. If there is anything left over I will think of her as I build a loft extension but if there isn't I won't resent a hair on her head. SHe is predominantly the reason that I am an educated sane woman capable of providing for my own family now.

"so you want them to move to a small poky place that they wont be happy in for the rest of their lives just so you can have more of an inheritence when they die?"

No - if they'd sold their house they could have moved to a three bedroom semi with a good sized garden. Semi detached houses in their village go for about £450K. We're not talking small and pokey. We're talking lovely family home. Just not big detached home with a massive garden. They could have covered their moving costs, and have put £100K in the bank for spending on themselves/holidays/home maintenance/care costs if they need it.

"Or dont have a massivbe mortgage"
If you don't like your big mortgage, downsize.

To what? A one bedroom flat? With my three children? I live in an ordinary very scruffy terraced house in a rough part of outter London. Maybe I shouldn't have said 'massive' - our mortgage is £1000 a month. We simply couldn't find anywhere cheaper to live within communiting distance of my husband's job in central London, or within visiting distance of my parents (who live in Surrey) and inlaws (who live just round the corner from us and whose health is poor).

"You AND your brothers and sisters can worry about helping your Mum IF she needs it as and when she needs it later on."

But how will we do that if we're all working full time?

my ILs did discuss equity loan with us. for one reason only: they needed money to do up the house to sell.

this was back in the boom and so we told them to see a proper estate solicitor and pay him the small fee to determine how much value would be added to the home's sale price - new kitchen, bathroom, flooring and outside rendering - v. the cost of the loan.

the tradeoff was an extra £15,000 so they went for it.

ended up increasing the value over that figure and making enough to downsize into a detached bungalow in the area.

FWIW I will make very clear to my DC's that the equity in my house is my pension and will be cashed in for me to live on. I cannot afford to support them and pay into a pension.

I don't think you come across as selfish FWIW.

you were very candid about your feelings, and you didn't seem to like those feelings very much, but your worries are very clear about your parents being effectively unable to move and unable to cope with a big house.

However you might also consider that if your parents had it in mind to move to a more manageable place they would probably do it now, not later. The longer they stay, the less likely a move would seem to be. And if they have capital, it would probably be used up in the cost of care, given that your circumstances mean you are unlikely to be able to be their main carer.

"No - if they'd sold their house they could have moved to a three bedroom semi with a good sized garden" - yes but they don't want to move.

They have a way of staying where they are, so they took it (and too late now to worry about what advice they should have got). They don't want to move.

If it gets to the point where they are physically incapable of living in the house, then they will be faced with the option at that point of moving or letting the place become a shambles. They are adults - unless you think they are mentally not competant to make their own decisions then you have to treat them like the adults that they are.

Jesus TBB, if semi-detached houses go for £450K then it sounds like there's still a huge amount of equity left in your parents' property. If the worst comes to the worst, and your father does die, your mum's going to have several £100K of equity in the property to sort out life for herself afterwards even if the property market continues to tumble.

I would also add, incidentally, that for older folk, moving out of the family home is a big wrench. My mum still lives in our big detached home even though it's just her and she could sell up, buy somewhere smaller and have a lot of extra money because she loves all the memories in it and because she's lived there for the last 35 years.

Ooh, this is a tricky one on so many levels.

One one level, of course there is no entitlement to inherit from your parents, and you've said you realise that. But at the same time there's no denying that your dad has made a decision to order his financial affairs in a way that isn't necessarily in your interest; that in turn says something about his own priorities (namely that you're not top of them) and I think it's perfectly natural to feel a bit sad about that, particularly when you have a direct comparison with your ILs who have chosen to arrange things very diferently.

I am in a very similar situation, actually, although my parents have taken out a loan with my (much more affluent) brother when they needed the cash. They did approach us at the time about going halves on the loan, but we didn't have the cash. So the interest rolls up withn the loan and will inevitably mean that the entire house and most of the contents will pass to my bro and his family.

I was never really expecting to inherit anyway, because my parents have always been shite with money -- they've inherited several large (6 figure) sums from older relatives in their turn, but I know they have managed it so badly that there is none left even now, and certainly won't be by the time they die. Like you, this contrasts neatly with my ILs who have a much more modest lifestyle, but I know have put money away to fund their retirement and to pass on to dh and his bro.

In summary -- there's nothing you can do. I think your feelings are normal, particularly the mild resentment which is not really about money but more about the message your father's actions send to you and your siblings about your places in the great scheme of things. But you have no choice but to accept it, get over it, and resolve to do things differently when it comes to your own children.

The flip side of that is that I don't think you need to feel too responsible for their future situation -- my mum keeps hinting that we will be responsible for keeping her in her old age, as she's too broke (despite all these loans and inheritances). But I'm very clear that we will not be able to provide for our own retirement and our dc's future as well as support my parents if they get into (entirely avoidable) difficulties. I obviously wouldn't leave them on the streets, but we won't be able to subsidise them. Just not possible.

[Sigh], but resigned [sigh]

People don't always do the sensible thing - they do what they want to do, thats no differnt at 40 or 80.

I think my mum has done something similar but on a much smaller scale.

What concerns me is that if she has to sell her house to finance a nursing home (or similar) she may not be able to do afford the fees. I wish she had discussed it with me first tbh so that we could have planned ahead together.

The point I was making is that your dad said he doesnt want to move to a semi as it would be too small for them. THEY dont want to move.

YOU think it would be better for them to move. But you never know. They might think that YOU would be better off squeezing your kids in a smaller place to avoid havng such a large mortgage. Of course its your choice how you live though just as its their choice how they live.

Its their money. they can spend it all on a big bet on a horse if they want!

I feel for you TTBB, and I think have had some harsh words
As my parents get older, and I am likely to be caring for them over the elder years, I think I would like to consult with them how we are going to tackle costs, housing , finances on a practical note.
It is a 2 way process.
And yes, i think the older generation had it easier house value wise.

I have never even thought about my share of my parents' money coming to me when they die. Is that odd?

My parents still live in a house that's too big for them. Not sure what's going to happen in the longer term (they're 74 and 76). But they're grown ups, of sound mind and if they decide to sell their house and spend the money on a yacht then that's none of my business.

i want nothing from my mom and dad, i have told them to blow the lot!

also they never saved for us, well there were accounts which i remember but apparently they got "plundered" to pay for windows or a holiday or something like that.

I'd have wanted the option to buy a share in my parents' house with my siblings so that they get their 100K tbh - but then I'd have been really annoyed that the markets were dive-bombing and I'd not be having a sound investment.

when was it signed?

I have a big house. It is my home. I love it. My children are always in my garden in my head. Many happy memories are here including my kids birthdays and the apple tree I love .

I must go and warn DCs that if they think we will move when they have left they are wrong.

Equity releases are rip offs. The OP's parents have had £100k but when the time comes to pay off that loan it will be the entire value of the house....

BUT - it was their house do to with what they wanted.

And actually the first thing i did when my dad died was pay his debts and sort out my mums finances.

Oh, I knew I'd cross posts with loads of people (had to make snack for dd2) but interesting to see that I'm at odds with most posters.

TBB I think you're being very honest about your feelings, and I don't think you come across as greedy or moany or having a sense of entitlement. It's very easy for those who have good relationships with parents to say, "Oh, I want them to spend it all having a good time" -- I'd be fine with that in itself, but it is quite hard to sit back and watch someone lurch from one duff decision to the next, knowing there's nothing you can do, but also knowing that you will be expected to pick up the pieces. My mum dropping heavy hints about how we'd all have to chip in to keep her in her lovely but hugely impractical house was the final straw for me, really. There is an extra angle in the OP's situation of the mother not really understanding the dad's decisions, which complicates things further.

Personally, I'm working my a*se off to make sure we can support ourselves in old age, and very much hope there will be enough left to make life easier for the children, and to make them feel that we have done everything we can for them. I don't resent my parents for not doing that, but it's impossible not to draw conclusions from it.

frogs
I'm not your mum am I ?

We are working our asses off two as DS2 will need life time care - so i guess i got screwed both ways really. Oh for a little inheritence.

I'm not sure that the OP's mother is that unusual of her generation my mum (a simialr generation) was always in the minority in school that she not only understood but controlled the finances.

She isn't going to change now so I think you just have to accept that your Dad makes the financial decisions. I can see why the idea of equity release worries you but if your Dad thinks you mum can;t cope with finances then I suspect he think s the same about most owmen and thereofre have dreamed of consulting you.

However ultimately, I'm afriad, it is still their/his decision/mistake to make.

I think all of us will (we hope) be old one day and won't want our children to behave as if they know better than us and are right about everything.

"then they will be faced with the option at that point of moving"

But if they leave it long enough they won't be able to afford to buy ANYTHING in their village, where they know everyone, where their doctor and the library are within walking distance........

"The flip side of that is that I don't think you need to feel too responsible for their future situation" - but I will and I do, particularly in the case of my mum, who's not really responsible for any of this, and who's been the best mother you could hope for. I can't bear the thought of her suffering and skint, and me letting her down because I'm barely coping as it is with my own home, work and children.

But I'd like to thank everyone for their responses - the sympathetic AND the not so sympathetic.

In a funny way it's comforting to read the 'you've got no right to expect anything' comments - quite bracing actually, in a good way.

I completely understand your point WWW but my mum is already at the stage of dropping hints that we don't look after/care about her enough. And yet goes ahead and makes decisions which could adversely affect her.

I don't think I'm explaining myself well tbh!