HELP-Sister trying to cash in on Dads home

gord115

lauren_1 wrote: »

So the sister's plan would cost almost double.

Cost who double??

It wont cost the dad a penny to borrow from his daughter.
It would cost the daughter lost interest on the 10k, and it would put a few noses out of joint when it came to dividing up the house. But it just smacks of money grabbing selfishness, your dad is struggling, your sister has offered to help but on the condition that she recoups some extra when he dies which ois fair enough, 10k is a lot to give away even if it is to a family member.

She isnt doing it for my Dads sake,she is doing it to make money for herself.
A few years ago she suggested that myself and her offered my Dad 50K for the bungalow and get him to alter the will so only us two would get anything. I refused beacause my other two sisters would get nothing. She only asked me because she couldn't afford to borrow 50K herself.

gord115

Thanks for your suggestions lisyloo

1) Downsize. Only fees are estates agents, legal and solicitors.
2) Everyone puts in the same (BTW - cash might stop he getting benefits).
3) She lends him £10K at an agreed rate e.g. BOE + 1%??, then she gets that back. Then the remainder is split.


1) I've suggested downsizing and he is reluctant to do so
2) my other 2 sisters are skint
3) My sister has told him her offer is fair and she won't budge

gord115

bajangal wrote: »

This type of scheme was on a "credit crunch" documentary last week. A woman wanted money out of her home to go on holiday. She ended up losing her home and she didn't get the lump sum. She hadn't read the small print. For your father's sake, please make sure everything is fully covered and understood. Not many company's hand over money and just sit back and wait for someone to die to recoup it.

This isn't that type of scheme,he doesn't sign over the house just the money he has borrowed off it plus interest,and they don't get anything until he dies.

lisyloo

This isn't that type of scheme,he doesn't sign over the house just the money he has borrowed off it plus interest,and they don't get anything until he dies.

There were some terrible schemes a few decades ago where the amount "rolled up" could exceed the value of the house and relatives were pursued.

I believe there is also an organisation called SHIP (safe homes income plan).

Also Age concern are a great resource.
I think they also publish a book.

Equity release is not going to be the cheapest way to do things, but if he's adamant about not moving then it might be a good solution and prevents family issues.

Does he get all the benefits hes entitled to?
My in-laws started getting pension credit when they had £27K in savings so don't assume he won't qualify.

He's probably not old enough yet, but my in-laws are both disabled and get loads of money thrown at them (attendance allowance, pension credit, council tax benefit) even though they have some savings.

mic200202

A lot of the Equity releases only work well when there are no other family mambers who would potentially benefit from an inheritance. If the family members have the means to raise the £10k among themselves then there are any number of ways this can be done.They could also buy the property from him, then raise the money by mortgage,which they would all be responsible for. That way all the shares are out in the open and everyone knows exactly where they are. The way being suggested by the sister is devisive, and can only lead to future disputes and fall outs.It is only valid if the other family members have no other means to raise the sum.Dont forget wills can be contested.

firesidemaid

i agree with one of the other posters - is your dad getting all the benefits and occupational pensions he is supposed to? when did he last have an assessment? have a check on www.entitledto.co.uk

does he have any health issues? 10k is a lot of money - does he actually need it or think he does or is it to pay debts off?

mikey72

By my maths it works out to a return of 10% ish, compounded over the ten years, with no growth in the house price assumed.

lisyloo

I certainly woulnd't be ineterested in the deal for 10%, if that puts anything into perspective.
There are all sorts of reasons why the sister mught get nothing (long term case, change of will etc.).

The return is far too LOW for the risks.
I'm not saying she isn't money grabbing as I don't know her one way or the other, but those who immediately jump to this conclusion have not considered all the risks IMO.

The money will easily be wiped out in a few years of long term care.
No-one should expect or rely on an inheritance for this reason.
Wills can be changed at any time, without informing the beneficiaries and equity release could also be taken out after the agreement.

firesidemaid

poster above is correct, had forgotten about that.

if your father ever needed to go into a residential or nursing home then the money would go to pay for his care first and you and your siblings may never see any of the money.

i hope that you can all sort the situation out amicably x

EdInvestor

This is one of the downsides of telling family about plans to do equity release. You can see why so many oldies decide it's just so much easier to take the cash and keep quiet. :rolleyes: