.... 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 do agree though about peoples' sense of entitlement. Not only to their parents' money though but to the money that people earn who earn more than them.

Resentment of people who earn good salaries/get good bonuses/can afford expensive holidays. There's a real sense of "why should others have it if I can't".

I am fortunate in that my dh earns a good salary. But there are people out there who earn a damn sight more than he does, and good luck to 'em I say.

Expat, that's really not how the OP comes across. She comes across as someone who is concerned that her father may have inadvertently dug himself and her mother into a financial pit without fully understanding the implications.

She's admitted feeling a bit sad about the fact that her father didn't feel he could/wanted to take her into his confidence, and is worried about how it will all pan out.

I really don't detect a sense of entitlement (though I admit the thread title could give that impression). I think you're being unfair.

Wrt my own situation I wouldn't mind if they gave it to the donkey sanctuary, if that made them happy (not that they ever would have). I do mind about the fact that they've made financial decisions which have made their old age difficult and unhappy, and which could have been avoided if my father had had the sense to take some proper professional advice, either from family members or from outsiders.

There are loads of lawyers and financial advisers earning a nice fat income out of elderly people who are asset-rich but not particularly worldly or experienced at handling money. Wanting your parents to avoid getting fleeced does not make you a grasping Generation Y-er with an overdeveloped sense of entitlement.

"I don't include myself as one of the 'impoverished' generation - DH and I managed to buy a house we can just about afford 9 years ago but my children won't be so lucky. "

You are wrong, they will inherit you. And I hope you dont have to endure then being concerned with their inheritance while you are still trying to enjoying your lives.

she later posted this, frogs:
'on Tue 10-Jun-08 21:00:47
Wanted to add: re the 'people work hard for their money - they have a right to spend it any way they want' argument, there's a whole generation of people who've got rich on property - NOT through hard work, but by the sheer good fortune of in living in a time when property prices have gone up beyond what anyone imagined they ever would.

In all situations like this there will be losers as well as winners. The losers are the next generation who are impoverished by disproportionately high property prices. How can it be right for one generation to merrily spend the profits made on housing while their children struggle to cope financially with the inevitable fallout of gross inflation in the property market.

I don't include myself as one of the 'impoverished' generation - DH and I managed to buy a house we can just about afford 9 years ago but my children won't be so lucky. '

If that is not entitlement, I don't knwo what is.

I do know I am going to get some very cool costume jewellry from my mom. She's actually giving me a lot of it now whenever she visits.

It is most cool.

The girls each have a box, too, for items of vintage costume from their paternal grandmother, which are very cool indeed.

I tell you one thing though OP, i think you were being mighty unreasonable, to expect a sympathetic hearing on AIBU I mean, surely, you must have known.....surely..

My mum also gives me jewelry that she is no longer using. I like it because I remember her wearing it when I was little. And really stunning hand embroidered and crotcheted large dining table cloths. They were originally made by my fathers late aunts. They have been dead some 20 years now, but I still remember visiting their farm house, they would be sitting hunched over their handycraft, they were such skilled women. Priceless.

"I don't see how it's right to expect others who got lucky to be beholden to anyone because of their good fortune"

There might not be a moral link between one generation's riches and the next generation's impoverishment, but there's definitely a causal relationship. You can't ignore it surely?

The high property values that have allowed a whole generation to discover the joys of gigantic conservatories, hot tubs and cruises are at the root of many of the economic problems we're facing now as a society: crippling housing benefit bills; welfare dependency, family breakdown, homelessness.........

I mean - I appreciate you're trying to be fair minded but at a wider social level (not thinking of my particular situation now), it is pretty odd.

dh's grandparents were going to take out equity release to buy themselves new windows. Fortunately they discussed it with MIL and they talked them out of it. Mil/fil loaned them the money instead.

Fast-forward a few years and dh granddad died from an annurism (sp?) leaving gm alone with the house. She sank into a clinical depression so bad that she is now in a home. a home which can only be afforded due to the sale of the house. A house they wouldn't have owned if they'd done the equity release, which would have meant gm would have had to go into a not so nice home.

I do think that, although it's obviously everyone's business how they spend their money/what kind of financial decisions they make, that if people only discussed these issues with their children, a better solution could be reached that would mean their parents weren't going to be ripped off.

I would rather find the money to loan my parents/ILs than see them essentially give their house to the bank. I don't care if I don't inherit it, but I don't want the bank to inherit it.

YANBU, yes there house there money etc but who will have to sort out nursing care, look after your mum etc.. My great aunt had dementia for a long time and thank god she had a house because at least we could get her a nice nursing home. My gran and great uncle have both made living wills, but no one knows what assets my uncle has, our fear is that we won't find them, not because we want the money, but because we may need it to pay for care for him. Things like this need to be discussed with the extended family imo.

Obv their house etc.

But titty, why should they be punished for that? Or made to feel guilty for that good fortune?

I just don't see it.

I mean, if that's how to feel, it would seem logical that I'd want to trash my landlord's house and feel resentful of him. I mean, he was able to buy this gorgeous place and he was a teacher and then a headmaster at a state school.

But he's a really nice man! I'm pleased for him, that he is able to afford such lovely place to retire to.

I know that won't be the case for me. I know I will most likely die impoverished.

But it's hardly his fault or anyone's really.

Okay, that was unfortunate phrasing.

But I think there's a whole lot more to this money/inheritance business than meets the eye -- it gets so tied up with how you feel about your family, how you think they feel about you yadda yadda that it's really hard to be objective about it.

I'm sure some of the sense of entitlement that people have about inheritance is to do with wanting something from their parents that they could never get when they were alive. Once you can separate out the love from the money it gets much easer to be rational about it.

My lovely grandmother years and years ago asked each of her many grandchildren to chose one object from her house that had sentimental value for us, and she would earmark it for us. Which is a lovely idea. As it turned out, she has since become quite confused about who is getting what, so I think it will be touch and go whether it works out how she planned. But actually it doesn't really matter to me -- I've received so much (non-materially) from her over the years that the actual objects would be lovely to have, but not really essential. Which is as it should be.

OK, if i am honest, i dont resent my parents for not leaving me their house. I have been very lucky to have had wonderful parents who have helped me out more than i probably deserve. BUT i do resent that they have probably paid a mortgage twenty times over, if not more, with the amount of rent they paid to the council. None of that money will they recoup, well its just my mum now, so she has no choices about leaving me an inheritance.

and I agree with whoever it was that said there are a lot of lawyers/financial advisers cashing in on the elderly who just don't have the understanding of what they're dealing with. Not because they don't have the inteligence/because they're old, but because the financial services industry is hugely complicated. There are so many policies out there, and they are all written in such legal jargon so as to be almost incomprehensible.

If finance was easy people would just do it themselves, but financial advisers are there to sell their specific product, not for the good of the customer, but for the good of their commission base.

and yes agreed that inheritence is all about how someone feels about you (in one's mind).

When my maternal grandmother died her jewellery was shared out between my mum, her two siblings, and my sister. There was nothing for me. now I don't care about the jewellery, what upset me is that I was the only one who received nothing, because I obviously didn't feature in the importance steaks.

Your Dad's pension may be written in such a way, so that after his death, your mother still gets it, until her death.

My own father left a pension like this for my step-mother.

Am I being unreasonable...? No, not unreasonable at all. You put it all very well. No solutions though I'm afraid.

expat yes my relative says those things (what she will buy when her Dad dies) to all our family and we all feel abit uncomfortable about it as he is still alive. She will inherit a very large amount which she has already made plans for (and is taking on debts as she knows she can pay it all off) and they don't think he will live much longer. I think it is fine that she has a rough idea what she may do with any inheritence she may get but I really wish she would think it and not tell everyone as it makes her sound abit absorbed into the money and not her Dad's precious time and his life. This person is pretty materialistic though in general.

I think in the future maybe less people will inherit as more and more elderly will have to fund their own care (and many do now).

I can understand being concerned about the equity release but what's done is done and any consequences will have to faced if/when they arise. There's no point in worrying about it now, IME, because things very often don't pan out the way you planned in the first place.

I'm and that some people here have already mentally banked their parents' inheritance. If I thought any of my adult dc were doing that, I'd kick their skinny little arses from here into next week! My mother and MIL both own their own homes but we are so far from expecting anything from them. One of my G-Aunts left all her money to the Seaman's Mission and the other enjoyed spending every last penny until she was 'destitute' though in reality, that just meant she lived in a council home rather than a private one.

"it gets so tied up with how you feel about your family, how you think they feel about you yadda yadda that it's really hard to be objective about it"

Yes - this is very true. We were put in boarding school when we were children and it was a horrible experience which has had long term emotional repercussions for all of us - we were made to go because of my dad's job. I think I've always harboured a sense of grievance because I suspect that my dad quite wanted us to go so he could have my mum to himself all the time and have a quiet life. I don't think I've ever felt that he put us first. My mum's a different matter.

Re: the wider question on this thread of one generation spending the spoils of a super inflated property market while the next generation suffers the social and economic consequences of over priced housing...... I do wonder if we'd talk about this issue in the same way if the welfare state didn't exist to provide a safety net against the threat of starvation and homelessness. Imagine that - people spending the equity from their homes on holiday villas and botox while their grandchildren went hungry and homeless because there was no such thing as housing benefit and family tax credits to top up poverty wages...... Do you think we'd still be taking the 'it's your money - if you want to spend it on a golf-club membership while your grandchildren live in a tent that's your right.....' line. Or would we think about intergenerational family responsibilities in a different way?

I suppose if they had discussed it with their offspring, as my inlaws did, one of them might have been in a position to buy a share of the house, rather than the equity thing they've done, as we were. My inlaws were sick of living hand to mouth and were going to sell up and rent. Fortunately we were able to buy the house which they rent from us, so they have cash in the bank and get to stay in their home. It is important for parents to discuss various options so that the best one for them can be decided on.

Seeing as it is decided on already, I'd get together with other siblings and see if there is a way to mitigate the cost of the equity release.

In answer to your question, TBB; Yes I would look at it the same way. It would still be their money to spend as they wish. Though in reality, few grandparents would allow this to happen.

I would never discuss with my parents how much mortgage we have or what we spend. Nor would I expect them to keep me updated on theirs. My PIL are sitting in a 800k house with no mortgage. They paid 67k for it in 1983. It never occurs to me that they'll leave it to DH. If I were them, I'd sell it now whilst they're still fit and healthy and travel the world in style for the next few years.

Yes, they've been fortunate to benefit from huge price increases but then good luck to them. My generation has benefitted from better opportunities for women, better nutrition, fall in infant mortality etc.

"My generation has benefitted from better opportunities for women, better nutrition, fall in infant mortality etc"

But would you feel happy at the thought that in getting those things for yourself, you were instrumental in depriving your children and their children of the same privileges? That's what 's happened with property isn't it? The gains enjoyed by one generation are the losses of the next?

Property is property, can you not try to view it in other terms than pure investment?
What does it matter what a good house cost if you are going to live in it? What does it matter what you sell it for if you did not pay for it in the first place?
If you try not to think of everything in terms of profit, you might feel a little happier.