.... 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?

God, another one. It's none of your business. It is their home, you should be disgusted at assuming at the comment about it being your 'inheritance'. Why are we surrounded a generation of kids who assume that whatever their parents have will one day be theirs.
If it was up to me, my mother in law would sell her home and spend the bloody money and i actually spent most of sunday afternoon trying to get her to agree, after her other son (aged 58) actually made the comment that if she lived to the same age as his dad he (the son) would have enough to pay off his mortgage within three years.

Absolutely prettybird. Its reasonable to grow old disgracefully if you have honestly made provision for many years of care once you have lost control of your faculties and you are prepared to let your children abandon you to your fate.

joash - I think tbb's concern is not really about the potential "inheritance" - which she admits is "wrong" - but what will happen to her mum if after, say, her father's death, they end up in negative equity and can't sell the house. Who is going to look after her/them then? That is why she is feeling so mixed up.

The fact that she also has a massive mortgage means that they are not in a position to help out if things got nasty.

YABU. They do not have to consult you in decisions they make whatever it is,

If you have a house worth 200k and you take out 100 and the bank rolls over the interest (which bt the way is usually higher than an average mortgage)it won't be long before what remains is gone esp if they live a few years.In many cases that i saw on a documentary many people had 0 or worse owed the bank.

Okay, all you YABU people, try this situation for size and see if you feel the same (details changed for privacy, but essentially my parents' situation):

domineering and utterly pigheaded father in his 70s enters into a series of ill-thought out business deals that result in sundry lawsuits in which parents are morally in the right but legally probably in the wrong. Mother unhappy with much of this situation but cannot persuade him to change his mind wrt cutting losses in respect of the lawsuit. Lawyers are screwing them blind, but father will not admit this because it would involve admitting he was wrong, which is unthinkable.

My bro and I ultimately succeed in making him back down after hideous confrontation where mum is in tears and bro and I spend the evening pretty much shouting at him. Parents are stung to a total of about £100K including solicitors fees and costs, all completely avoidable.

Now luckily bro was able to lend them most of this with interest to roll up within the estate, the rest of the costs have completely sucked up all their available resources. Major works need doing to the house, but the resources are not available for this. If one or both of them was to need significant care, they would be up a gum tree, and house is in any case completely unsuitable for older or disabled people.

Legally bro will inherit everything, as I will be unable to buy him out. This is a bummer (more for the sentimental value than the financial), but I can take it on the chin. In practice, they are racking up more debt, to the extent that the land and the house (which has been in the family for generations) will all have to be sold off when they die, if not before. Financially they are absolutely f*cked. It is not a good place to be, and I hope to god that neither of them needs significant levels of care as they simply have no money for it. They know this, but are in deep denial.

If they'd acknowledged at an earlier stage that maybe their children did have some useful contribution to make (bro is lawyer himself) none of this would have happened, and they would be living happily with a nice financial safety cushion.

Personally, I hope that when I get to that age, I will have the kind of relationship with the kids where we will be able to discuss things sensibly, and that both sides will listen to each other's opinions. That is not at all the same thing as dictating to your parents what they should do with their money, it's simply good relationship and money management.

"but there will be NO big comfy cushion"

Never mind the 'big, comfy cushion'.... we live in London and our children won't be able to afford to buy a home of their own EVER, unless they are a) lucky enough to inherit or b) earning 100K a year.

I do recognise how lucky dh and I are to own our own home - we bought in 1999. If we were newly married and on comparative incomes today we'd wouldn't be able to buy a home with property prices being what they are. My parents were lucky in their own way - no inheritence, but property prices were low enough that they could buy a family home in a nice area on one civil service salary.

RE: nursing home fees.... I wasn't thinking so much of these as of extra help for my mum and dad at home: shopping, cleaning, bathing - knowing they would want to stay in their own homes as long as possible.

Re: "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?"

The interest rate was 8% when they took it out, but it's variable so will have gone up since then. The interest is added to the original sum and then interest is added on to that annually I think. They can't go into negative equity. My maths is rubbish so I'm a bit stumped when it comes to working out how quickly a debt of 100K will grow at, say, 9 or 10% compound interest; I assume that after a few years it will start to grow very quickly. BTW the only reason I know all this is because my mum told me. My dad hasn't discussed it with any of us - still.

If my dad dies before my mum she will have the house but no savings. She will have half his pension to live on. At present they are just about treading water on his full pension. They spend £100 on gardening alone, plus gas prices are set to go up by 40% later this year. They also spend a fortune on vets bills as they have two dogs who are not in good health. I cannot see how my mum could afford to stay in the house on half the income they have now. Unless she stops turning the heating on/stops getting help with gardening/ eats less/ gets rid of her dogs. My concern is for my mum not to be plunged into a financially impossible situation on the death of my dad, or forced to move out of the village in her old age. Property prices are high where they are and finding a suitable house to downsize into if they've lot a huge chunk of the equity in their current home, especially if you factor in moving costs.

She's so, so loyal to him that she'll find a way of putting a brave face on things, but I think he's done her wrong. She gave up a career she loved (she was a nurse) to support him in his work abroad as was expected in the 1960's when they got married. Because of this she's never had much of an income of her own. She has to ask him for money now for everything, since she gave up her part time job as a carer a few years ago. She doesn't have any money of her own and is not used to budgeting.

I agree that in some ways spending money on the house was sensible - it needed new windows. But they spent money on having the kitchen done - and it's absolutely hideous. My dad (who has never cooked a meal in his life) made all the decisions about the design of the kitchen and it's awful, really awkward and hard to work in. Far from increasing the value of the house it's so horrible it'll probably make it harder to sell if they ever do decide to sell.

Haven't time to read entire thread by YABU for defo. My parents did discuss it with me but they hadn't needed to. Its their money and as my dad is 80 this year I want them to enjoy the rest of their life together and if going on their hols 3 or 4 times per year is what makes it enjoyable then so be it.

It depends how much th house is worth.If the interest is added and then added again which is what they do theoretically they could end up owing if the house is not worth much.I think you were right to be worried and a bit cross

The interest rolls up staggeringly fast. I saw the calculations drawn up for the 'loan' my bro made to our parents, which was a good bit less than £100K, and the numbers get very big very quickly.

I still say their money, their business entirely, frogs.

Parents don't owe kids a penny when they die. They really don't. They're not here to provide financially for adult children.

And if they need care and are indigent through their own failings, well, they'll become a burden on the state and arguably they've contributed to that through a lifetime of taxes and NI.

I think the BIG problem here is that people in the UK now see a house in terms of money and investment and not as the commodity it is. It's primary function is supposed to be as shelter and a home.

Frogs - there must be so many women in our mother's situations..... I suppose the financial problems many now face are in some ways a reflection of women's inequality in the 1950's and 60's. My parents have such rigidly defined gender roles: mum cooks, cleans, cares for children, does laundry. Dad works/ed outside the home, deals with finances, cars, diy etc.

My dad hasn't cooked a single meal for the family or for my mum in 40 years. My mum has never put petrol in her own car! Arrgh!

You're misunderstanding me expat. It's not to do with them owing us a penny. It's to do with the fact that through sheer pigheadedness they have ended up in a really shite situation that they would not have chosen in a million years. It would kill my dad to sell the land, it's the only thing he really cares about. Yet somewhere he must know deep down that that is precisely what he's brought about. He's been suffering from serious health problems brought about at least in part by the anxiety of the pit they've dug themselves into.

And it was all so avoidable. Sure, I could walk away and wash my hands of it, but that's not how most families work, surely? It's really hard to see them like this -- horrid way to spend your last years. Much better to discuss these things openly within the family so that everyone's viewpoint can be heard.

I agree. My Mum is an intelligent woman who had her own successful career (even though she had a 10 year break to have children). She doesn't believe in getting into debt and has a fear of being poor in old age. Even so, she is useless with financial stuff. The worst thing is that she admits that she doesn't even want to know how to run her finances, she just wants someone to do it all for her (she is no longer together with my Dad).

I just think that it's considered "not a very feminine" thing to do, and even though my Mum is not with my Dad (and Dad isn't the kind to have bullied her into stuff) she still won't do it. She goes into her bank and does whatever they tell her to.

alot of parents do expect their kids to be looking after them in old age though don't they? So you get the situation where your trying to help raise your granchildren and looking after elderly parents.

I can understand your feelings and I don't think you are selfish or nasty - you've admitted your feeling make you uncomfortable. Years ago it was natural to expect an inheritance. We would all love for our parents to spend spend spend - but things are so bad financially that we'd also like to be part of a close knit family where everyone helps each other out financially and emotionally. They've worked hard for their money etc etc - so is everyone else but the benefits these days mean you work twice as hard for half the profit.

No, I'm not misunderstanding you, frogs. They're there now. They're in the situation. It is what it is, be it through his pigheadedness or Martians landing on their pension or a freak accident or what have you.

And not bailing them out doesn't mean washing your hands of it and walking away. It's perfectly possible to help in other ways - not everyone is in a position to help with money but that doesn't make them a bad, uncaring family member.

It was perhaps unavoidable but it happened and he wasn't obligated to discuss what he did with his money to family members.

Live with the consequences, yes, but still not beholden to discuss financial decisions with others.

I would like to be adopted by rich parents, right now please.
I would like a big mother fucker of an inheritance.
as it is my parents have little. My mum said they have recently made a will. I told her i wasn't interested and for them to spend it on having a good time.
But if we were talking big f**k off house , detached, 10's of thousands of pounds, then thats a different ,matter.
Adopt me now

[shoves Ob out the road]

NO. Adopt ME instead .

100k at 8.5% componded over 7 years would be 182

Yeah, I can smack a preggers lady, over this kind of money any day Expat.
Bring it on

May the best bump win, Ob .

Oh, are we foing bumps-adaisy- fighting ?

doing

To all of the people who've posted comments along the lines of 'you have no right to expect any money from your parents' - do think it's fair to point out that I do acknowledge that the sense of entitlement I mention is something I feel ashamed of. But you know I'm only human. Both DH and I have had health worries in the past six months that are still not fully resolved. I've been awake at 5 o clock in the morning thinking dark thoughts about how you cope with a mortgage if one of you isn't well enough to work or care for the children. Admittedly there are a lot of people in our situation - worrying about the cost of living; rubbish pensions; coping with young children and ageing parents in a time of uncertainty about employment and increasing interest rates... You SHOULDN'T think about inheritence but you sometimes can't help wanting something or someone to bail you out.

"And if they need care and are indigent through their own failings, well, they'll become a burden on the state and arguably they've contributed to that through a lifetime of taxes and NI."

So if my mum ends up completely destitute because of the decision that my dad made more or less unilaterally, I should shrug my shoulders about the fact that after a lifetime of devotion to my whole family, she's left in a very uncomfortable and unpleasant situation because my dad was unable to face the thought of moving from a detached to a semi detached property half a mile down the road from where they are now?

I'm not concerned about my mum being a burden on the state. I'm concerned about her being unnecessarily left in a horrible financial situation through no fault of her own.

'So if my mum ends up completely destitute because of the decision that my dad made more or less unilaterally, I should shrug my shoulders about the fact that after a lifetime of devotion to my whole family, she's left in a very uncomfortable and unpleasant situation because my dad was unable to face the thought of moving from a detached to a semi detached property half a mile down the road from where they are now?'

Well, what exactly else are you supposed to do? The decision was made and you were not consulted and there was no obligation for them to do so. Your mother chose not to tell you until after it was over and even if she had, it wasn't for you to decide or advise on because you were not asked to do so.

It's DONE.