Arrangement Fees from Advisors for Equity Release - Do I need one?

Leodogger

MWT said:

TrickyDicky101 said:

Is your property already held in a trust?  Why would that be and when was it placed within it?

There was a mention of a Tenants in Common Trust provision in the wills... so not in a trust yet, but the provision is an impediment to getting equity release as it is usually predicated on the entire value of the property passing to the surviving partner and then subsequently the full value being available at disposal to repay the loan + rolled-up interest...

Quite so, the Trust only comes into effect when one of us dies and as you say at that point 50% of the sales equity in the house would pass to one of my children.

TrickyDicky101

MWT said:

TrickyDicky101 said:

Is your property already held in a trust?  Why would that be and when was it placed within it?

There was a mention of a Tenants in Common Trust provision in the wills... so not in a trust yet, but the provision is an impediment to getting equity release as it is usually predicated on the entire value of the property passing to the surviving partner and then subsequently the full value being available at disposal to repay the loan + rolled-up interest...

Yes but the OP stated "...and I went online to see how long it takes to get the Land Registry to take off the Trust..." which implies it isn't simply a provision in the wills.  Unless of course the OP didn't actually mean to imply the property is currently owned by a Trust...

Leodogger

TrickyDicky101 said:

MWT said:

TrickyDicky101 said:

Is your property already held in a trust?  Why would that be and when was it placed within it?

There was a mention of a Tenants in Common Trust provision in the wills... so not in a trust yet, but the provision is an impediment to getting equity release as it is usually predicated on the entire value of the property passing to the surviving partner and then subsequently the full value being available at disposal to repay the loan + rolled-up interest...

Yes but the OP stated "...and I went online to see how long it takes to get the Land Registry to take off the Trust..." which implies it isn't simply a provision in the wills.  Unless of course the OP didn't actually mean to imply the property is currently owned by a Trust...

Actually it was my poor knowledge of how these things work until I phoned the solicitor who said the referencest  to the "Trust"  will have to be taken OUT of the wills" which means we need new wills to be drawn up, although we can still retain the Tenants in Common element of the wills.  From what I understand (and perhaps someone can correct me if I am wrong), the solicitor then sends the instruction to the Land Registry to take off the "Restriction" from the Land Registry entry.

TrickyDicky101

Leodogger said:

TrickyDicky101 said:

MWT said:

TrickyDicky101 said:

Is your property already held in a trust?  Why would that be and when was it placed within it?

There was a mention of a Tenants in Common Trust provision in the wills... so not in a trust yet, but the provision is an impediment to getting equity release as it is usually predicated on the entire value of the property passing to the surviving partner and then subsequently the full value being available at disposal to repay the loan + rolled-up interest...

Yes but the OP stated "...and I went online to see how long it takes to get the Land Registry to take off the Trust..." which implies it isn't simply a provision in the wills.  Unless of course the OP didn't actually mean to imply the property is currently owned by a Trust...

Actually it was my poor knowledge of how these things work until I phoned the solicitor who said the referencest  to the "Trust"  will have to be taken OUT of the wills" which means we need new wills to be drawn up, although we can still retain the Tenants in Common element of the wills.  From what I understand (and perhaps someone can correct me if I am wrong), the solicitor then sends the instruction to the Land Registry to take off the "Restriction" from the Land Registry entry.

It depends entirely whether you choose to continue holding the property as Tenants in Common (in which case the Form A Restriction will remain) or whether you wish to return to holding it as Joint Tenants (in which case the Form A Restriction would indeed need to be removed).  The easiest option may simply be to leave it as Tenants in Common.

Did you originally create the wills (with reference to Trusts) some time ago?  My parents did this in the 2000s so that should one die then the Trust would inherit 'their' share of the property such that prolonged care of the survivor would not deplete this share and also to benefit from the IHT limit for each spouse (this latter is no longer a concern as the law was changed).  When my father passed in 2018 the wills had not been amended from when originally created and the last thing I wanted was a Trust to be created so we spent legal fees to effectively remove this provision.  Trusts can cause onerous difficulties (in addition to their benefits).

Leodogger

TrickyDicky101 said:

Leodogger said:

TrickyDicky101 said:

MWT said:

TrickyDicky101 said:

Is your property already held in a trust?  Why would that be and when was it placed within it?

There was a mention of a Tenants in Common Trust provision in the wills... so not in a trust yet, but the provision is an impediment to getting equity release as it is usually predicated on the entire value of the property passing to the surviving partner and then subsequently the full value being available at disposal to repay the loan + rolled-up interest...

Yes but the OP stated "...and I went online to see how long it takes to get the Land Registry to take off the Trust..." which implies it isn't simply a provision in the wills.  Unless of course the OP didn't actually mean to imply the property is currently owned by a Trust...

Actually it was my poor knowledge of how these things work until I phoned the solicitor who said the referencest  to the "Trust"  will have to be taken OUT of the wills" which means we need new wills to be drawn up, although we can still retain the Tenants in Common element of the wills.  From what I understand (and perhaps someone can correct me if I am wrong), the solicitor then sends the instruction to the Land Registry to take off the "Restriction" from the Land Registry entry.

It depends entirely whether you choose to continue holding the property as Tenants in Common (in which case the Form A Restriction will remain) or whether you wish to return to holding it as Joint Tenants (in which case the Form A Restriction would indeed need to be removed).  The easiest option may simply be to leave it as Tenants in Common.

Did you originally create the wills (with reference to Trusts) some time ago?  My parents did this in the 2000s so that should one die then the Trust would inherit 'their' share of the property such that prolonged care of the survivor would not deplete this share and also to benefit from the IHT limit for each spouse (this latter is no longer a concern as the law was changed).  When my father passed in 2018 the wills had not been amended from when originally created and the last thing I wanted was a Trust to be created so we spent legal fees to effectively remove this provision.  Trusts can cause onerous difficulties (in addition to their benefits).

We have been told that to qualify for Equity Release funds with the Lender, the Trust has to be removed from the Land Registry as they check this before considering you for equity release, so it has to come off from the Land Registry.    We were going to try to reduce costs by doing our wills over the phone with one of these special offer will services, but presumably then the new will would not remove the Property Protection Trust, so it has to physically be done separately, but would we have to do this?  I should add that the Equity Release advisor told us we can still keep the Tenants in Common bit but not the Trust !

TrickyDicky101

Assuming the reason for the Trust in the first place was as I gave in my post above then the Trust does not yet exist and hence there is nothing to remove from the Land Registry.  This is something to check with your solicitor and not the equity release advisor as it is a point in law.

Leodogger

TrickyDicky101 said:

Assuming the reason for the Trust in the first place was as I gave in my post above then the Trust does not yet exist and hence there is nothing to remove from the Land Registry.  This is something to check with your solicitor and not the equity release advisor as it is a point in law.

I think you misunderstood me, the lender will NOT lend money with the Trust in existence because although the Trust is not "in effect" as we are both alive, if say they gave us the money and one of us died in a year's time, immediately the lender is unable to touch half of the equity in the property to repay the loan as that portion 50% passes to one of our children on the first death.  You can continue with the "Tenants in Common" which only applies to what you do between the owners in their lifetimes and the Charge from the Lender is placed as first priority on the estate in the event of the death of the second owner, as the death of the first doesn't affect the Equity Release until Both owners die or the second passes into a care home.

TrickyDicky101

I understood what you meant but I think the only place the Trust will be referred to is in your wills. Therefore it will not be on any Land Registry systems or documentation (it is a registry of what is and not what may be).  

The Trust will only come into existence on the first death of either you or your spouse. Until that time the Trust doesn’t exist.

MWT

Get a copy of the current Deeds from the Land Registry (do it online and make sure you use the Land Registry site, not one of the many other sites that will charge you a premium for this), then check to see if there is a restriction registered on the Deeds.

Leodogger

TrickyDicky101 said:

I understood what you meant but I think the only place the Trust will be referred to is in your wills. Therefore it will not be on any Land Registry systems or documentation (it is a registry of what is and not what may be).  

The Trust will only come into existence on the first death of either you or your spouse. Until that time the Trust doesn’t exist.

 

This is exactly what the solicitor wrote in her letter to us on the action she had taken to draw up the Property Protection Trust :

"We have therefore prepared the paperwork in order to cancel the joint ownership of your property (joint tenants - the property would have passed automatically to the survivor of you) so that you will now own the property 50/50 (tenants in common - your share in the property will now go in accordance with your will).   Once this is signed, it will then be sent to the Land Registry for registration.   Your Wills have then been drafted to include protective Trusts over your respective half shares in the property"

Therefore it is noted on the Land Registry as a restriction which would have to be removed.   I did explain all this to the ER advisor and he still seemed to think the Trust would have to be removed before we would be offered the money.