Fake Equity release ?

AdrianC

Brum2312 wrote: »

My sister and I are essentially propping up our parents lives in order to shelter them from the normal issues of getting old. They clearly have no intention of offering us the same consideration, instead take us for fools which we have been up until now.

Isn't that an inevitable corollary of sheltering them from reality...? They don't then understand the reality, so can't frame their lives correctly...

Xplosivgas

Just off the top of my head, rather than give your parents cash/bank transfer each month, can you give them a credit card or pre pay card of some type? That way it will be harder for them to pass funds to your bro and you can check an online statement that it's being spent on themselves? You could probably come up with some justification that this will be easier for you maybe...

kingstreet

Brum2312 wrote: »

My theory is that this all sounds ridiculous and our parents have lent them the money but collectively want to keep the whole thing secret.

So you now have this confirmed?

Mojisola

Brum2312 wrote: »

Well that's the point! My sister and I split the costs evenly however we are certainly paying 800 per month between us.

When I last saw their bank statement they had about 22k to their name.

If your parents had used their own savings to live off instead of having £800 a month gifted to them, they would soon have got to the level where they could claim means tested benefits.

If they have given away 15k to your brother, they will be assessed as still having that money and won't be able to claim benefits in the future.

Brum2312

Thanks everyone. It is rather therapeutic to discuss this anonymously and get a detached perspective on this.


We aren't giving them cash which they are choosing to give away. What actually happens is we pay bills to prevent the last of their cash from being spent on their life's "essentials". The idea being they can then enjoy the last of their cash how they please. This is obviously a flawed approach as they have done exactly that and its not to my liking. So the problem is mine. So I fully accept that I (and my sister) have caused/allowed this situation and then essentially don't like the way it has played out so are throwing our toys out the pram. We should have foreseen something like this, as our actions haven't exactly helped my parents in the long run.

I don't agree that doing an equity release is a spiteful approach by us. We fully intend to do our best to teach/help them make wise choices. Including the importance of not giving this money away, as once its gone they will essentially be out of options. However in order for us to stop paying things directly the money needs to come from somewhere.

Perhaps there is merit in a significantly smaller equity release, say 20k at first. If they blow 20k in a year hopefully they will realise that their life isn't sustainable at that rate. My parents aren't !!!!!! (can i say that?) however they are far too dependent on us. If they choose to spend their own house ultimately that is their business. Its time to help them make their own choices/mistakes. I personally can't handle deceit, and ultimately I need to look out for myself and my partner more than my 2 parents and 7 tag-alongs.


Thanks

poppy10_2

Brum2312 wrote: »

We are going to strongly suggest they release as much equity in their home as possible.

Terrible advice, to be honest.
You'e already said they are financially naive. They didn't plan ahead when they retired early, and have got to their current situation without any savings or the ability to support themselves because they can't handle money.
If they get a massive cash lump sum now it's going to be spunked up the wall on frivolities or given to your brother and within a year or two will be all gone. Then they'll come cap in hand to you again, this time with the threat of repossession hanging over them. As much as you say you are going to leave them to it, chances are you will bail them out when they are facing homelessness. Plus they will blame you for suggesting they MEWed away all their equity.
This is going to rebound on you badly.
Don't give them any advice, or support. Just cut them off financially. It will be much better for them in the longer term to turn to professional support from Stepchange/debt helplines and address their spending habits. MEWing will just delay the inevitable.

Pixie5740

Brum2312 wrote: »

Thanks everyone. It is rather therapeutic to discuss this anonymously and get a detached perspective on this.


We aren't giving them cash which they are choosing to give away. What actually happens is we pay bills to prevent the last of their cash from being spent on their life's "essentials". The idea being they can then enjoy the last of their cash how they please. This is obviously a flawed approach as they have done exactly that and its not to my liking. So the problem is mine. So I fully accept that I (and my sister) have caused/allowed this situation and then essentially don't like the way it has played out so are throwing our toys out the pram. We should have foreseen something like this, as our actions haven't exactly helped my parents in the long run.

I don't agree that doing an equity release is a spiteful approach by us. We fully intend to do our best to teach/help them make wise choices. Including the importance of not giving this money away, as once its gone they will essentially be out of options. However in order for us to stop paying things directly the money needs to come from somewhere.

Perhaps there is merit in a significantly smaller equity release, say 20k at first. If they blow 20k in a year hopefully they will realise that their life isn't sustainable at that rate. My parents aren't !!!!!! (can i say that?) however they are far too dependent on us. If they choose to spend their own house ultimately that is their business. Its time to help them make their own choices/mistakes. I personally can't handle deceit, and ultimately I need to look out for myself and my partner more than my 2 parents and 7 tag-alongs.


Thanks

Equity release is a spiteful approach for two reasons:

1) You're setting them up to fail.

2) You don't know that an equity release product is the most suitable solution for them.

If your parents are dependent on you and your sister it's because you've made them dependent on you. It's like those parents who do everything for their child and then wonder why that have an unemployed 32 year old still living at home who's incapable of making a sandwich or operating a washing machine. Withdraw your financial support and let your parents get on with it instead of giving crap financial advice you're not qualified to give.

pinklady21

Presumably by suggesting Equity Release, you have also thought through the issue that the house will no longer be part of your parents' estate, thus making sure that nobody, including your younger sibling, can inherit anything meaningful.

As someone on the outside looking in, it appears that your judgement may be being clouded by your emotions - you are angry that your parents appear to favour your brother and his offspring.
The only power you have in this situation is to end your financial support.
Be prepared that this may also lead to an effective ending of your relationship with your family. Which you may or may not feel is a price worth paying.

Families and money - often a minefield, sadly!

BrassicWoman

Brum2312 wrote: »

My parents aren't !!!!!! (can i say that?) however they are far too dependent on us.

and you're going to perpetuate that by taking over

May I suggest reading up on transactional analysis to give you an idea of how to break the cycle? A good read is "I'm OK, You're OK" and also "the games people play"

You can get them second hand for pennies and it's a great investment.

Cakeguts

I don't think telling them to do equity release is a good idea because you are again helping them with money. Just withdraw your financial support and let them take over their own finances.



The point is that you want them to be financially independent. Managing their own money. You might want to withdraw it gradually to give them chance to get used to the fact that they are going to have to work out how to pay their own bills. This is how it should be. They can't rely on you to pay their bills because it means that they can spend as much as they want and not care. If they are living in a house that is too big for them and they have difficulty affording it what you want is for them to think about this aspect not leave it until they are not mobile enough to manage the cleaning or the stairs.



Most people in their position downsize not only because of money but also because as people get older they can't manage to clean a large family home or maybe they have difficult with stairs.



They need to live somewhere that they can afford. However rather than giving advice wait until they ask you for it. Do not give them money if they ask for it you don't want to get back into the same position.



It is quite normal for you to not want to give your parents the money that you should be spending on having a good life with your girlfriend especially since your parents have enough money and don't really need it.