“How will equity release affect my family?”

For most of our customers this is one of the first questions they want answered. And understandably so. We all want the reassurance that our families will be well provided for, so when you are making a big financial decision such as equity release it’s important that you understand exactly how it will affect your loved ones.

Involve your nearest and dearest

The decision to release equity from your home is of course yours to make and you are under no obligation to involve any other parties. Having said that, a good equity release adviser will always recommend that you talk to your family about your plans, that you involve them in discussions and invite them along to consultations.

Our advisers visit you in the comfort of your home so it’s nice and easy for your children or other family members to join you. They are encouraged to be actively involved in the meeting and to ask any questions that they have. This is a great opportunity for them to fully understand the process from the offset.

Releasing equity affects how much inheritance you leave behind and this can make it a difficult subject for some families. We find that including family members from the start tends to avoid unnecessary upset later on and ensures that everyone involved has the right information from the start. It can also be useful to have trusted people there to help you make your decision.

Family living in your home

Nearly all couples that we work with are both over the age of 55 and therefore a joint equity release plan is the most sensible option. This means that in the event of one of them passing away or moving into long-term care the remaining partner has the right to live in the family home for the rest of their life, or until they too move into care.

If however you are living with a partner who is not included on your equity release plan and the above situation arose your home would need to be sold.   Under these circumstances, unless of course the mortgage can be fully repaid, your partner would need to move into alternative accommodation.

If another member of your family lives with you, maybe your son or daughter for example, they will also be required to move should you pass away or move into care.

We know that it’s not nice having to think about these things but we wouldn’t be doing our job if we didn’t highlight all the ins and outs for you and your family.

Stay in your family home

In our experience, it’s very unusual to find a family without a strong emotional attachment to their family home. Quite often it’s the place a couple started their married life in, the place children were born and grew up in and the home now shared with grandchildren. 

It’s no wonder then that so many of our customers and their families struggle with the idea of downsizing, they simply can’t bear to sell a property that is home to a lifetime of memories.

Equity release allows you to free up the tax-free cash sat in your family home and still live their for the rest of your life, or until you move into long term care. All this without the cost, stress and hassle of buying and selling.

Some customers decide to reinvest the money into their home by carrying out much needed home improvements. The benefits here are often twofold; a very stylish home in which to enjoy retirement and an increase in property value. Of course others decide to treat themselves to exotic holidays or to simply enjoy the comfortable lifestyle that extra retirement income enables.

And, with the increased flexibility of equity release plans, should you decide you want to move house later on you have the option to take your plan with you.

Can I still leave an inheritance?

This is such a burning question for so many of our customers and we completely understand why. The short answer is ‘Yes’ and the slightly longer answer is that by releasing equity you are reducing the money left in your estate and therefore the amount you leave behind for your family is also reduced.

If you would like more reassurance and prefer to know exactly how much you will leave you can choose to protect a portion of your equity as inheritance. The other option is to pay off the interest as you go, which means that there is no build up of interest left to be repaid. Your adviser will be able to talk you through all the available options and help you to decide which is best for you.

Gifting a ‘living inheritance’

More and more of our customers tell us that they are releasing equity to help family members while they are still around to see them enjoy it. Many want to help their children or grandchildren buy their first home whilst others are releasing money to put them through university or to help pay for that dream wedding.

Using Equity Release in this way simply means that family members receive and benefit from their inheritance at a time they most need it. It also means that the joy of giving is shared by everyone.

If you are considering Equity Release and have questions about the impact on your family please get in touch and lets see how we can help.

If you have any questions about equity release,
please get in touch with us on 0800 612 6755.

Thanks for reading, we look forward to hearing from you.

To find out more please click here to speak with one of our experts
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Photo by Kelli McClintock on Unsplash