Need a bit of a Clue about Equity Release

ceedy1950

My parents recently passed away, and I've found out that my father got into some sort of equity release scheme.

It appears the Equity Release Company  own 100% of the house, after loaning out around  56k  bout 10 years ago.

And having read all the  dodgy paperwork, it  seems ?  that the agreement was ,when the home is sold  expenses?  are paid and the remainder is divided in a 35% 65%  split with fathers estate getting the 65. so that would equate to around £120k/£211k. .

Is this a proper equity release and does it have a name ? .

I'm  old a cynical   so looked  at the company involved and it seems they are among 240+ other similar named companies all registered at the same address as the company that owns them ..

Any clues  gratefully appreciated peeps ....

ta,,

Chris

tacpot12

At this state, I don't think you want to be too concerned about the name of the scheme, but rather was it sold correctly correctly. It seems odd that the agreement was for a percentage of the house to pass to the firm, but actually this arrangement did work to protect the amount of equity that would remain. £64K looks like a lot of interest, but you have to remember that the Equity Release firm didn't know when your dad was going to die (I assume) and hence didn't know whether they were lending him money for 10 years  or 30 years. Can you evidence that it was mis-sold? 
 
It is possible that each equity release mortgage required a separate company to be setup, which would account for the large number of similarly named companies at the one address.

Thrugelmir

ceedy1950 said:

Is this a proper equity release and does it have a name ? .

Equity release comes in a variety of forms. The bottom line is that your parents were able to release some cash and have a better retirement. After all was their money to enjoy. 

MWT

ceedy1950 said:

My parents recently passed away, and I've found out that my father got into some sort of equity release scheme.

It appears the Equity Release Company  own 100% of the house, after loaning out around  56k  bout 10 years ago.

And having read all the  dodgy paperwork, it  seems ?  that the agreement was ,when the home is sold  expenses?  are paid and the remainder is divided in a 35% 65%  split with fathers estate getting the 65. so that would equate to around £120k/£211k. .

Is this a proper equity release and does it have a name ? .

It sounds like a 'Home Reversion' plan, and just because you didn't know about it and are not familiar with it, doesn't make it 'dodgy' ...

Typically the expenses to be deducted will just be agents’ and solicitors’ fees then they get their 35% and the estate gets the 65%.

It is always recommended that relatives or those anticipating inheritance are told about these arrangements, but all too often it is not done for personal reasons.

Thrugelmir

MWT said:

ceedy1950 said:

My parents recently passed away, and I've found out that my father got into some sort of equity release scheme.

It appears the Equity Release Company  own 100% of the house, after loaning out around  56k  bout 10 years ago.

And having read all the  dodgy paperwork, it  seems ?  that the agreement was ,when the home is sold  expenses?  are paid and the remainder is divided in a 35% 65%  split with fathers estate getting the 65. so that would equate to around £120k/£211k. .

Is this a proper equity release and does it have a name ? .

It is always recommended that relatives or those anticipating inheritance are told about these arrangements, but all too often it is not done for personal reasons.

It's none of their business. 

MWT

Thrugelmir said:

It's none of their business. 

I don't disagree

It is part of the standard advice that will be given to anyone heading down the Equity Release pathway though, as it does mitigate the all to frequent presumption that what was a rational decision at the time, was somehow 'mis-selling' or 'taking advantage' of a parent or relative when the much anticipated inheritance evaporates or at least is significantly reduced.

... on the other-hand and with no specific reference to the OP, I can fully understand that some parents/elder relatives may feel it is presumptuous of their potential beneficiaries to assume they would leave wealth behind that they could have enjoyed themselves before their demise...

Thrugelmir

The loss of inheritance I suspect drives many of the threads on here. Comes as a shock. That the parents put themselves first.