.... 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?

A good way of looking at it, QS.

I think in the UK it's seen as the have all to end all, as a commidity, rather than as a shelter, a home.

We will never own any property but it is hardly the end of the world. I do not feel I was deprived of anything by other generations - I do feel the government has allowed the property to become such an investment vehicle that millions will live in penury for trying to put shelter over their heads as rents go higher, but see that in terms of just shelter, be it rented or not.

Hmmm....Sounds alot like your folks are trying to get some enjoyment from their assets before its too late.. good for them!

EXPAT, you reckon you can manage to pay 20k for a 4 bed house with a barn and its own pier? (you could possibly bid less, as the owner has it mortgaged to the value of £15k and as long as he doesnt come out negative)

This is clearly about the inheritance issue, just look at the original post "...suddenly discovered I'd been unknowingly harbouring a sense of entitlement over my parents estate...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...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.........."

This is soooooo about expectations and perceived entitlement.

"I think in the UK it's seen as the have all to end all, as a commidity, rather than as a shelter, a home"

But like it or not it IS a commodity and has been treated as such by many people who've used it to fund luxurious lifestyles. And the flipside of this is that those who just want a home and a shelter often can't have one - because of the way other people have played the market.

Anyhows..... I'm off to bed now.

This has been a great discussion - very useful and instructive. And quite chastening. Honestly mumsnet is better than any therapy I can imagine paying for!

i don't save for my children.

don't have that luxury.

DD1 got £50 for her birthday from my ILs and her uncle, and every penny will go to pay for her school uniform clothes.

boohoo.

we're grateful to have had it at all.

A lot of people are relatively clueless with money. It is heartwrenching when it is your parents who are clueless with money. My mother has had two pretty massive inheritances and managed to spend it all - basically through not understanding the difference between capital and income. Oh and pretty grotesque overspending. So here we are and I pay my own mother an allowance - it is something that really makes me clench my jaw with irritation.

I think YANBU (apart from the sense of entitlement thing - but you already said you were ashamed of that). There seem to be a lot of complex issues tangled up here.

I do think it is a shame they didn't talk it through with the whole family. Of course they had no obligation to, but you are a family, and as you say, you will be the ones responsible for their care as they get older, and it does seem that the only winners in these equity release schemes are the banks.

Regarding the negative feelings: try to remember that your dad wouldn't have gone for this scheme if he didn't genuinely believe that it was the best solution to the immediate problem of sorting out the stuff that needed doing to the house. He most likely thought he was acting prudently rather than thinking "sod the family I want the £100K" or anything like that. I do see though how this is tied up in your mind with the wider issue of the wealth transfer to the older generation through super-inflation of house prices and have some sympathy with this (although who knows how this will pan out over the next few years).

Regarding the worry about their financial future: the equity release may have been a mistake, but it sounds as though there will still be plenty of money in the house even if the most extreme predictions of house price falls come to fruition. And bigger houses in posh areas tend to lose less value in a crash.

As for what your mum will do in the event of your dad's death - I would really try not to worry about this. They sound pretty organised with good pension etc, and you/she won't know what she will actually want to do or where she will want to live until it happens.

Hope your own health/money worries are resolved soon. Fantastic that you see your parents so often and talk to your mum every day - you should really treasure this.

QS -totally agree with you about perception of property. There is an awful expression 'property ladder' which is all about climbing on and clinging to it, and climbing ever higher - clearly not sustainabale for everyone to do that in perpetuity - completely illogical. when I bought a flat, I liked it, I could afford to pay the mortgate, and so the fluctuation in value and 'equity' in it was completely meaningless.

I haven't read the whole thread so don't know what everyone else has said bar the first few ...
But: I never have and never will expect anything from either sets of parents. For my dad's 70th birthday he treated my mum and him to a round the world trip of a lifetime ... 1st class all the way. And spent all the savings they had. And I am so glad they did because they came to see us for what might be their last trip out our way. Since then Dad has been diagnosed with cancer and I am soooo happy they had such a brilliant fantastic frivolous trip before he got sick.
DH's step mother is spending all of FIL's hard earned cash on cosmetic surgery (boobjobs, facelifts, tummy tucks etc - I believe the total tally so far is $100,000 ) - we think because she wants to make herself ready for when she is 'on the market' again (he is near 80, she is not yet 60). Of course, I think it is, quite frankly, a huge waste cos she still looks like she has been hit by the Ugly Stick but that's by the by. My point is, who are we to quibble - it's their money ... full stop, end of story ....

I am very bemused by all these people who seem to be advising the OP that her parent's money is none of her business and that she should also let her parents deal with the consequences of their decisions by themselves. It is a lovely fantasy to plan to spend your old age cruising the world and then perhaps die of a sudden heart attack, your independent children smiling as they think of how much fun you had. The reality is that you could live to 102, spend many years in need of care and need the support of your children. Presumably if you loose the use of your faculties, they will be in charge of your finances, whether they like it or not. I like to think that I would get the chance to discuss these things with them when I had the chance.

YANBU. You acknowledged in the ruddy OP that you didn't like discovering you had a sense of entitlement and that you were ashamed of it, so I'm completely that the big sticks were out for you.

I appreciate that you said it was therapeutic to be reminded that a sense of entitlement like that was unreasonable, but you didn't ask in the OP if a sense of entitlement was unreasonable - I read that your primary issue was concern for your parents, actually.

So no, you are emphatically not unreasonable to be worried about your parents, and particularly your mum. I think you sound like a lovely daughter.

My mum and dad have recently made some bad business decisions that I suppose would impact on my inheritance.

My dad is 77, my mum is 65, they will be around for a long time yet and I am not worried about them really as I suppose they don't have millions but they are relatively comfortable and I see their money/equity as theirs to look after themselves with or spend stupidly as they wish.

There are five of us siblings and so we will be able to look after them between us if they blow their cash and by the time they die and it is devided by 5 there will be little left.
I expect my inheritance will be a bittersweet small cash bonus in 20-30 years time certainly not something I can bank on.

Oh and I think that one of the reasons I don't think about an inheritance is because my parents have been generous to all of their children. I am lucky to have enjoyed the benefits of my parents generosity whilst they are around to enjoy my gratitude. A model I will definitely be following with my dd, wtf is the point in being buried leaving a fortune if your children cold do with help? I'm not an idiot, I work hard and have a keen appreciation of the value of money which is why I appreciate any money my parents have given me.

All that said I think the op was thoughtful and measured and caring

There seem to be a lot of saints on MN whenever these types of threads come up.

I would be totally pissed off if my mother decided to fritter away my inheritance, especially as she herself has benefited from inherited money. Why not spend income and save capital if it is possible?

I just don't get the "skiing" mentality. One of my dearest wishes is to build up as much capital as possible for the benefit of my children and grandchildren. Why put so much in when your children are growing up only to behave selfishly with such an important legacy when you are old?

I have put everything into my DC while they are growing up so that they can have the best choices in life. I don't know where the idea of 'my inheritance' comes from! I think Anita Roddick had the right idea, leaving DCs a huge inheritance isn't good for them.
It is all very mercenary. I am on another thread where people only seem to tolerate their DP's parents out of a sense of duty and seem to think it weird that inlaws can be lovely people, so I hate the idea that they are then eyeing them up to see how much money they should get!!

This is quite an interesting thread. I am not british and come from a culture where parents continue to help their children financially till they are no longer able to do so. The pay off is, that the grown children feel quite an obligation to their parents, and were they to become ill/ frail would make greater efforts to keep them out of a nursing home and to remain living with the family ( possibly using money/larger house the parents had given them years ago)

I know many people would find this very alien, but I like it

But Idina, it's not your inheritance, it's their money.

I shouldn't count on 'your' inheritance Idina, if your mother has to go into a nursing home and pay over £2000 a month it will soon disappear.

I agree with Mrs Sylar. Personally I'd rather my mother lived with me than a nursing home if it's possible. That's because she's been a great mum and financial generosity has been a natural expression of that love over the years, just as I hope to be with my adult children. I just don't see why anyone would get more satisfaction out of randumly spending money they could leave to their children (spending money out of necessity is another matter).

Well firstly we have no "entitlement" to our parents assets....it would be very nice of there was a little something left but it is not something you can expect as a right. My parents have never had much anyway so I have pretty much grown up knowing there will be nothing to inherit and perhaps that is a healthier way to be.

Secondly your parents are getting old if they come to the stage where the need to go into care homes then the profit fromt he house would very quickly be eaten up by the fee from that so you wouldnt see any anyway.

The only thing that does concern me is are you sure your 80 year old father was up to understanding the implications of what he has done....not making an assumption that all 80 year olds are senile but I wonder how many of these companies are preying on vulnerable older people.

You know I think (from the lofty position of never having inherited any money nor ever likely to) that inherited money should be held in trust for my children. So if a parent has inherited money there is a reasonable expectation that they should pass it on to the next generation - maybe even augment it a little. If they have not inherited money and earned it all then it must be theirs to dispose of.

My parents are very clear that they want to go into a care home when they cannot look after themselves totally.

Message withdrawn

I think my mother was perfectly entitled to spend her money 'randomly'on a trip to New Zealand and a cruise and a new kitchen-none of which were necessities. Are you saying that she should only have cheap holidays in the UK and make do with a serviceable, but not terribly nice, kitchen so that she can give the money to me and her grandchildren?
She has worked hard all her life, has been a widow and managed on her own for many years, given my brothers and I a wonderful childhood, as many opportunities as she could manage, has dropped everything to help us in an emergency, has helped with grandchildren and is generous on occasion so I think it is time we treated her! I hope that she has many other lovely holidays and spends her money as she wants-I most certainly don't want her to consider what she is going to leave.

You sound like a lovely person Abbey.

I don't consider holidays or a new kitchen luxuries. But I would expect my mother to consider and think about what she could leave to me and my brother, because it happens to be something that is a priority with me with regard to my children. For example, I may get to the stage soon when I might be able to afford private school fees for my children (at a push), but a part of me thinks that I would rather buy a buy to let property for them instead and put the money towards this so that they have a financial cushion when they are adults.

In other words, I think inheritance and legacies are important because they can make such a difference to people's lives. But I would never want my mother to go without either because I love her to bits.