Implications of loan to a parent

ReadingTim

stuyvpc wrote: »

Depends how you feel about your parents. My wife's siblings are very supportive of the the idea as they would like their parents to do something they have always wanted while they still can. They cannot help financially at this time but as Mojisola pointed out any commercial arrangement would cost a lot more than an interest free loan from a family member.

Personally, I feel my parents are capable of making up their own minds on whether they want to go on a round the world cruise or not, and if they do, how they're going to pay for it.

It is correct that an equity release arrangement would cost far more than an interest free loan, but the point is that by initiating such an arrangement, it would demonstrate that the beneficiaries of the equity release were serious about the trip - to me it seems you're a little too keen on foisting your own opinions of what you think your parents want onto your parents and siblings. I'd simply suggest that you might be able to help out with a loan, and see if they're actually interested - to enquire about documentation etc at this stage seems like you're getting ahead of yourself by several steps.

Finally, speaking of inheritance, we've all assumed there will be something left to inherit once they're both gone. But care home fees can quickly burn through that, and no amount of documentation can repay a loan from an estate of negligible value. What would you do then?

Mojisola

ReadingTim wrote: »

Finally, speaking of inheritance, we've all assumed there will be something left to inherit once they're both gone. But care home fees can quickly burn through that, and no amount of documentation can repay a loan from an estate of negligible value. What would you do then?

Any documented loan would be repaid before money was taken for care home fees so that isn't a problem for the OP.

If any of the other siblings were angry because a loan was repaid out their parents' money, they would be out of line.

stuyvpc

ReadingTim wrote: »

Personally, I feel my parents are capable of making up their own minds on whether they want to go on a round the world cruise or not, and if they do, how they're going to pay for it.

It is correct that an equity release arrangement would cost far more than an interest free loan, but the point is that by initiating such an arrangement, it would demonstrate that the beneficiaries of the equity release were serious about the trip - to me it seems you're a little too keen on foisting your own opinions of what you think your parents want onto your parents and siblings. I'd simply suggest that you might be able to help out with a loan, and see if they're actually interested - to enquire about documentation etc at this stage seems like you're getting ahead of yourself by several steps.

My wife's parents and family are capable of making up their own minds and I could have written an extremely long initial message about them talking about downsizing or equity release - with all the attendant cost and hassle at their age. As I said at the outset I was asking for advice here to find out if it was feasible and not to bureaucratic for us to look into. IMO the worst thing we could do is make the offer and then find out we couldn't actually do it.

And some people gave me very useful advice without the need to make assumptions about my family relationships and for that I thank them.

undaunted

ReadingTim wrote: »

Personally, I feel my parents are capable of making up their own minds on whether they want to go on a round the world cruise or not, and if they do, how they're going to pay for it.

It is correct that an equity release arrangement would cost far more than an interest free loan, but the point is that by initiating such an arrangement, it would demonstrate that the beneficiaries of the equity release were serious about the trip - to me it seems you're a little too keen on foisting your own opinions of what you think your parents want onto your parents and siblings. I'd simply suggest that you might be able to help out with a loan, and see if they're actually interested - to enquire about documentation etc at this stage seems like you're getting ahead of yourself by several steps.

Finally, speaking of inheritance, we've all assumed there will be something left to inherit once they're both gone. But care home fees can quickly burn through that, and no amount of documentation can repay a loan from an estate of negligible value. What would you do then?

It's surely you who is missing the point. Documentation would be there to protect them and ensure that the loan was not only documented but repaid out of the proceeds of any sale before Social services grabbed any "assets" which the parents no longer owned (i.e. the 25k debt)



It is your assumption that they seek to foist an opinion when they may in fact simply be thinking of making a generous offer and want to be clear exactly what they are offering / asking in return before raising the matter with parents / inlaws only to dash their hopes should it then prove an impractical idea.

margaretclare

Here's a different viewpoint, from your parents' age-group.

If you can afford it and they are really keen to go on this world cruise, then go ahead. Life is too damned short and there are a lot of regrets. Mainly about not doing things when we were in a more fit and able condition to be able to do them, not so much about not having money.

Having said all that, a world cruise is not something that DH and I (both same age as your parents) would ever, ever want to do. But hey, its your parents, not us.