.... 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?

i understand where you're coming from ttb.

if your dad had said, stuff this we're selling up and going around the world on a yacht for 5 years. see you soon, you'd have been a bit gutted re your potential inheritance but i guess would probably have thought "their life, their money"

but - he is giving it away in interest payments.

are they funding some alterations to the house so it will be live-able in?

if your dad is as comfortable as he sounds, i am sure he has factored in the interest and thinks it is a worthy investment. he doesn't sound clueless. Would any of you have been able to fund the loan instead? If not, then i don't know what else you'd expect him to do. It's not reasonable to expect people of his age to leave the house they've been living in all their lives. It kills most people who do that btw.

"It's not reasonable to expect people of his age to leave the house they've been living in all their lives. It kills most people who do that btw."

That's a fair point. They do definitely need to make alterations to make sure the house is suitable though (whole family situation with my GF moving from pillar to post as his needs have changed).

You know, you reap what you sow. But not your parents? They should let you reap it? YABU.

After a long life of working, and building up their home, they should NOT get refurbishment work done, not get a new car, etc, Just to ensure that their grown up children should get a bigger inheritance? I am sorry, but you do sound like you dont consider what is best for your parents in all this.

I haven't read all your post or all the replies as basically unless you think your dad isn't of sound mind its none of your business and YABU

Sorry to be blunt

Why would you expect them to discuss it with you? Do they normally discuss financial matters and that's why you're
surprised?

"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"

I think this is probably at the root of the way I feel.......

Also this:
"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."

I won't be walking away saying 'you got yourself into this mess, you deal with it' when/if they get senile/ill and can't afford to pay for the care they need because they've spent the equity in their house on gardeners/new windows/cars.

If the state provided flexible, good care for people in their own homes it might be a different issue, but where they live it doesn't. Someone will have to be there to bath them, care for them, get them up/down stairs to use the toilet/pay their bills etc, sort out their garden and that person is most likely to be me. Why me? Because my older sister is a heavy smoking/drinking flake who loves my parents but can't be relied on for anything, and who lives 50 miles away, and my brother who puts in a 60 hour week at work and is planning on moving out of the area when his youngest starts school.

Yes you see I have starting working with my parents that as my younger sister is likely to be absconding emigrating to Australia and my brother died last year, it is likely to be me providing the care when they get more fragile, I would therefore like them to sell up their massive pile 2 hours away from me, move closer and enjoy their grandchildren for the younger Grandparent years.
I see most of their estate going on care, but i think we should be pro-active in thinking about how we can deal with it.
I think her dad sounds a little inconsiderate TBH

I don't think that it is any of your business, they are entitled to do whatever they want to with their money and property. You would most probably tell them to mind their own business if they tried to interfere in a house purchase or investment that you were making and so it unfair to expect to be consulted over their arrangements.

"I think her dad sounds a little inconsiderate TBH"

I just can't understand why he didn't consider how my mum will be able to afford to stay on in the family home on half the income they've got now, in the event he dies before her.

On heating costs alone the house will consume a massive chunk of her pension, not to mention maintenance, gardening, etc etc. And then there's the issue of her not being able to get up the stairs if her joints get much worse.

And what options will she have then?

I think you have had a huge range of opinions here which really is what you wanted.

However I have to say that if my 80 year old father made a decision like this without taking independant financial advise (never mind talking to me) then I would be slightly worried, and I make no apologies for that...

but it is TTB's business if she is the one who is going to have to provide the care in the unsuitable house.

there are too many issues wrapped up here, but the one about "how are they going to manage?" is TTB's issue.

TTB, are they altering the house so it is more "usable" in their old age. Downstairs bathroom/bedroom etc.? If not, could you suggest it?

Hmm actually I think there are lots of issues here.

Re the inherritence, I don?t think anyone should feel any sense of entitlement to anything when their parents die. It is their money, either because they have worked hard for it all their lives or because they have been fortunate enough to have a lot of equity in a property they may have lived in for many years. My parents have about 100K equity in their house, and ILs have considerably more, so me/dh do stand to inherit a reasonable chunk when they die as things stand at the moment. However it is entirely possible that one or both our parents may need care as they grow older and the houses will have to be sold to pay for that. Or alternatively maybe they?d like to sell the house and buy a yacht and sail around the world. Either way it?s their money and I hope they enjoy it as they see fit. And if there?s nothing left when they go then so be it.

But equity release is a massive rip-off. And I would seriously discourage my parents from getting into that much debt at their age. Because what happens if one or both of them requires full-time care? Where once they would have been able to afford to have the best care, they will now be forced to rely on whatever the state has to offer. Plus if op?s dad dies before her mum, her mum will be left saddled with a debt that she doesn?t really understand, she won?t be able to move out of her big house into something smaller, because the house will belong to the bank.

I can understand the statement that it?s their money and their business, but I do think that taking on such a massive debt when you?re in bad health and you know you?re not likely to live much longer and are going to be leaving an eldertly partner behind is a little selfish.

Your dad has obviously only thought of the here and now rather than the actual future when he is no longer here.

I think that the one thing you have to remember here is that they are your PARENTS and not the other way round.

I do joke - whay have children when you have parents, but they brough you up, so should be able to do the right thing.

My parents have just sold one of their houses, and whilst it did occur to myself and my siblings that we had all just effectively 'lost' about £120 grand each in inheritance (we did discuss it) none of us cared as it is not our money, not our business.

Think it is rather crass to feel hard done by, TBH.

You seem to be taking the criticism very well

Do you know for a fact that your dad has bought into a dodgy scheme or is that just your assumption? If not, can you find out? I can't work out if you know they're going to have to sell the house to pay off the loan or are envisaging worst case scenario

Maybe if he dies before her, she will sell it then. As you say, it's a done deal. I think feeling furious about it won't help you right now. Or even help you in the future.
I agree with WannaBe, equity release is not half as jammy as it looks. But could they even back out if they wanted to?

Only read the title but YABU. It is none of your business.

When I am 80 I shall expect to make my own decisions and not have my DCs telling me what is sensible or convenient for them.(I am not expecting them to look after me). I am most definitely intending to spend my money on travel and the things that I want to do! I hope (and think) that they will be pleased for me and not be thinking that is another £10,000 less for them! My mother has just been to New Zealand aged 80 and had a wonderful time. I would much rather she spent her money on herself and wasn't living in a house that she didn't like so that she could pass more of the money on.

plus this is really the first generation that elderly parents have had these options. There is a vast aray of financial products on the market now, and equity release is a fairly new concept, so unless op's dad is a financial adviser, it's highly likely that he has not been given the full facts about the terms of the agreement.

The financial services market is a minefield for someone who understands it, let alone for someone who has no experience of these products other than the glittering adverts they've seen on the tv.

To be fair to the OP, it sounds as if she is more worried than "miffed."

And FWIW my parents have literally never given, nor spent, a penny on me the whole of my life.

I can relate to your feelings on this.

I would not trust an equity release scheme - imagine it is a way for the banks to make money out of people. Nowadays people often need the money from eventually selling their home to pay for care homes etc. so I would not be wanting to take out loans against it. However as your parents have already taken the policy out there is really nothing that can be done. I assume that your parents still own a large chunk of the house so only part of the estate would go to the bank.

I admire your honesty over the inheritance issue...I think if most people are honest they might hope their parents would leave them something. However it is not something one could ever count on in planning family finances etc.. I think you just have to live within your means and if any inheritance comes your way it will be a nice surprise like winning the lottery!

I do think that the parents are entitled to d what they want, however if inheritance tax comes into the equation, then the whole family should be involved in how to reduce this liability.

Actually I have some fod for thought now after this thread.
i actually believe that the fact that DH and I couldn't expect anything from our parents was really good for us. I am not working now but we both had a huge drive to succeed. But I realise that my expectation is that we will probably help 2 out of three of our children - and maybe that would be doing them a disservice long term.
Although my 'help' would only extend to support in Uni and perhaps starting on the property ladder. i would be mortified if i were still helping my kids past 30.

But I also realise that i am already settled in my head that care for my mum is not my concern and perhaps that allowed me to be insensitive to the OP's concerns re their later years . So apologies for that TTB !!

I have DS2 to look after for ever and i did loads to help my mum when dad died. I figure that my 7 siblings - who all live much closer to my mum than me - can sort out any care my mum needs between them.

(I'm still going to be the batty woman in the big house though in my dotage. Plan to smell of cats pee if at all possible - although can't stand cats)

I'm actually pretty shocked by the OP.

My parents released a bit of equity a few years ago, and all I thought was, good on you, enjoy it while you can.

I certainly don't feel remotely entitled to their money when they go, and as far as I'm concerned they can release 100% of the equity, money they've worked hard all their lives for.