.... 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?

fod for thought .
perhaps food

to the op.
when is aaw the thread title, i was all set to be judgemental. but from your post, it sounds as if you are thinking through this, and dont like what you see inside you. good for you i say. we all have dark places inside ofus. things we never knew we were capable of. better you find this out now, and try to deal with it, with your parents love and affection.

i think that your parents are being unreasonable not discussing this with you, but that is because i know that my parents would never do that with us. we have had lengthy discussions of how their estate is to be divided. however there are many many families where this is not the norm, my in laws for example. different people do things differently. i think that because you have probably never discussed money matters with your parents before, they didnt see the need to discuss this time.
cherish the time youhave with your parents. dont beat yourself up about how you feel. we all have dark moments.

FWIW Equity release schems are regulated in that you have to be qualified to sell them now and companies are very careful in selling them as they do not want to leave themselves open to accusations of misselling further down the line.
I advised my mother to use equity release for her house as I wanted her to enjoy her life while she can with what money she had available to her.
As for using your equity to pay for nursing home care, believe me at £800 a week, you would need a mansion to pay for your nursing home fees.

Good for you pagwatch-I am also going to be a batty old woman-I intend to grow old disgracefully! Just because they are elderly doesn't mean they can be told what to do by their children, unless they are incapable and the children hold power of attorney.

im sure there is plenty of equity on the house to not make it an issue

and if the money was needed to repair the property they didnt have much choice and are actually sfaeguarding the property an dpreserving the investment

your ps sound perfectly able to make their own decisions so you dont need to be consulted

in fact probably better not to be as you and your sibs might not agree

£800 per week, really BGD?

Shit

info on equity release

so:

the house essentially becomes the property of the company.

The sum of cash may reduce entitlements to certain benefits and may even mean you are not entitled to state funded care should you need it.

so you could release the equity, plough that money into the home improvements and when you need care you wouldn't have a home to sell to pay for it.

FIL currently in nursing home in South London and his fees are just over that. He does have Parkinson's as well but it is not cheap being in a nursing home.

I can understand your concern - and your amivalence as you have been honest (and guilty) about why you feel upset.

You have two concenrs: 1) did your dad get sufficient independent financial advice as it impacts on 2) is the loan sustainable in the long term especially after his death, as the house will not be pratical for your mum on your own and you are the most likely carer, so the burden will fall on you.

Understandable to be worried.

Therefore, it should also be understandable for you to go through these concerns with your dad. How is the loan serviced? What is the nterest rate? Can they go into negative equity? What happens if/when he dies and if/when your mum cannot cope with the current house? Has he made provision for her?

Reasonable questions for you to raise - as a responsible daughter.

The issue about inheritence is a red herring that you know is not logical and even in your OP you recognise that.

At that price my mum could only afford about 3 or so years in a home

Why do they cost so much?

TTBB - this has been a very intersting and thought provoking thread - thanks to you for baring your feelings and being gracious about the replies.
It has made me think about our own situation with the DC. I have always told them that we will look after them, feed them, protect them, educate them till they are grown up and bigger and cleverer than us and ALWAYS love them, but that we shall not be leaving them a massive inheritance because we will have spent it all on the above and having fun together as a family.
DH would like to leave them something, I would rather we max out on their education, holidays, books, experiences to put them in the best position to decide when they are adults how they want to spend ther lives. They may decide to go for jobs earning loads of dosh, or they may decide to become penniless -waiters- actors, musicians or writers, or more likely like most of us soemthing in between but there will be NO big comfy cushion - it will be down to them.

These schemes are dreadful and with componding interest and a falling market people, can really end up in a mess.Have they had a cooling off period or have they already spent the £

I find it interesting that people would not take kindly to their parent telling them what to do, or not do with a house purchase (I am preety sure that they would be posting on the 'Am I being unreasonable thread')and yet the other way round it is called being a responsible daughter!!

Not telling - asking.

They have to cost that much Mercy because of the overheads and huge staffing bills.

When I bought my first house my mother thought it was a mistake and said so, it was nothing to do with her! It turned out she was wrong. I don't want my DCs 'asking' me about my decisions just because I am 80.

I know, but £800 per week?

A hotel doesn't cost that much for one person (ok BGD's Fil seems to need specialist care but even so)

OMG - I am totally with www - it's none of your business.

I haven't read the whole thread so don't know how this one panned out!

Is this a done deal? Is there a 'cooling off' period?
100k seems an awful lot for windows/kitchen. Did they really need to borrow that much?
Looking forward: do you trust your dad to get a good deal on the windows/kitchen?

I don't think I would want to be involved in my parent's financial decisions as they have always been quite private about that kind of thing. However, I would be slightly concerned about equity release as I think there are some very dodgy schemes around and presumably you and your siblings will have to pick up the pieces if it goes wrong. I would also be concerned if my mother signed something without being aware of the implications.

I can slightly understand that you feel a bit miffed about your inheritance. I think the last generation will perhaps be the only generation to be allowed to grow old disgracefully. Generations before and after had/will have to work more or less until they die, whether that be when they are 60 or 80. I know life is very, very tough for many elderly people. However the combination of the housing market and final salary pensions is temporarily enabling some people to have a retirement that probably won't be available in 30 year's time.

yanbu, most of these schemes are terrible, they will be the endowment miss selling of the future.
if they had discussed it with you maybe another solution could have been reached, yes its their business but sometimes two heads are better than one.

I think it is none of her business too BUT often when these schemes come home to roost the people don't really understand what they have agreed to

I think the reality of caring for elderly parents is underestimated.
It is a vast emotional,financially, physically and psychologically draining nightmare.
Plus add in some cognitive impairment/dementia so that your parents no longer can make rational decisions.
And yes, residential care is v costly, and we have a mushrooming elderly population, with stretched resources.
Things will be worse when we are >75.
So yes, i think parents need to start talking to their children about these things, and that sounds to me what TTb wants.
This is not about her dad spending her inheritance and going on his hols.

With a dad who was 80 and who had a series of mini strokes, I think he WOULD be unreasonable if he took offence that his daughter was asking if he had thught about the future of his wife.

Either that or he is terribly selfish in assuming that his daughter is going to pick up the pieces.

His daughter can say she is concerned becasue she knows she would have diffculity helping her mum as she already has enough on her plate - and is therefore worried - so explaining why she is asking.

He would of course be perfectly entitled to say "Yes I have and I have made provision for her and you don't need to worry - so it is none of your business"

... but at least the daughter would then be reassured that he has done something!

I appreciate your honesty. Many people feel quite openly entitled to their parents money. I guess you know you are being unreasonable. If you have a massive mortgage, you probably need to work hard to pay it off, or maybe downsize? All best.