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

Leodogger

MWT said:

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.

You don't get that kind of detail do you for the £3 they charge?

MWT

Leodogger said:

MWT said:

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.

You don't get that kind of detail do you for the £3 they charge?

Yes, but based on what you added in your previous post the restriction should be there, so not much point in checking really.

How long ago was that solicitors letter that you quoted from?

Leodogger

MWT said:

Leodogger said:

MWT said:

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.

You don't get that kind of detail do you for the £3 they charge?

Yes, but based on what you added in your previous post the restriction should be there, so not much point in checking really.

How long ago was that solicitors letter that you quoted from?

The letter was dated October 2017 when we set up the Trust.    I have just found this online too which many people might not know about :

https://www.wake-smith.co.uk/latest-news/news-archive/2022/01/18/wills-trust-and-property-protection-trust--register-it-now

MWT

I don't think you actually have a problem here, but this is something for your advisor and solicitor to resolve for you with the selected lender, as from what you have said, this is not a case where you currently have a trust in place holding the property for the benefit of a 3rd party, this sounds like a fairly 'normal' Tenants in Common Declaration of Trust, which should not prove to be an impediment to equity release, but it may limit what can be done by a surviving partner after the demise of one of the parties, typically that would be the removal of any further access to any drawdown facilities that are in place, and to disallow any further borrowing secured against the property...

As long as there is nothing to prevent the lender registering a first charge on the property as a whole it should be OK...

Leodogger

MWT said:Prot

I don't think you actually have a problem here, but this is something for your advisor and solicitor to resolve for you with the selected lender, as from what you have said, this is not a case where you currently have a trust in place holding the property for the benefit of a 3rd party, this sounds like a fairly 'normal' Tenants in Common Declaration of Trust, which should not prove to be an impediment to equity release, but it may limit what can be done by a surviving partner after the demise of one of the parties, typically that would be the removal of any further access to any drawdown facilities that are in place, and to disallow any further borrowing secured against the property...

As long as there is nothing to prevent the lender registering a first charge on the property as a whole it should be OK...

I note what you are saying, but it sounds to me like the solicitor had the Trust registered at the Land Registry, although it forms part of our wills.    So either it is a Restriction on the Title Deeds which the lender would see and want removed, or there is nothing registered but the "Tenants in Common" which I was told was perfectly OK so long as there was NO Property Protection Trust registered.    I am completely mystified with it all but only the solicitor can say if this Trust would take away the lender's right to part of the estate if one of us dies which is what the ER advisor was saying.   It was also how we had it set up that when one of us dies, 50% of the property goes to one of our children, so the lender would only have 50% of the estate to take his money from as a Trust overrides a will I believe.

Leodogger

I found this information on Property Protection Trusts which was very useful

https://www.thewillpractice.co.uk/property-trusts.html#:~:text=of the house?-,A.,Q.

MWT

Leodogger said:

I am completely mystified with it all but only the solicitor can say if this Trust would take away the lender's right to part of the estate if one of us dies which is what the ER advisor was saying.   It was also how we had it set up that when one of us dies, 50% of the property goes to one of our children, so the lender would only have 50% of the estate to take his money from as a Trust overrides a will I believe.

You can't actually register a Trust with the Land Registry, what they do is add a restriction to effectively put down a marker that there is a limitation on the disposition of the property, without specifying exactly what it is, this avoids making the Trust Deed a public document...

Unless you have some unusual terms in your wills and the Trust Deed, you cannot leave 50% of the property to a child ignoring any charges on the property, they would usually get the benefit of 50% of the residual value when the property is sold...

Did you have a mortgage at the time the wills were drawn-up? 

Leodogger

MWT said:

Leodogger said:

I am completely mystified with it all but only the solicitor can say if this Trust would take away the lender's right to part of the estate if one of us dies which is what the ER advisor was saying.   It was also how we had it set up that when one of us dies, 50% of the property goes to one of our children, so the lender would only have 50% of the estate to take his money from as a Trust overrides a will I believe.

You can't actually register a Trust with the Land Registry, what they do is add a restriction to effectively put down a marker that there is a limitation on the disposition of the property, without specifying exactly what it is, this avoids making the Trust Deed a public document...

Unless you have some unusual terms in your wills and the Trust Deed, you cannot leave 50% of the property to a child ignoring any charges on the property, they would usually get the benefit of 50% of the residual value when the property is sold...

Did you have a mortgage at the time the wills were drawn-up? 

I did refer to it as a "Restriction" on the Land Registry above.    We didn't have a mortgage when we bought the property.  There were no charges on the property when we took out the Property Protection Trust !

MWT

I'm still struggling to see where the problem is going to come from.... absent anything unusual in what was done at the time, the trust is only triggered into existence at the time one of you dies, and at that point the 50% share passes into the trust with the beneficiaries as set out in your wills.

This doesn't give the trust unencumbered ownership of the 50% if the property is encumbered at the time of death, and doesn't remove the first charge on the property placed their by the lender...

So once again we are back to an earlier point, as long as there is nothing in what you have done that prevents a first charge from being registered, I don't see a problem, beyond the points I mentioned earlier about removal of further drawdown rights or additional loans, as you would not be able to further encumber the property as  whole, to the detriment of the 50% owned by the trust...

If the property was already held in a trust then you would have a big issue, but I don't believe that is the case if you have only prepared for protective trusts to be created upon one of your deaths. 

Leodogger

MWT said:

I'm still struggling to see where the problem is going to come from.... absent anything unusual in what was done at the time, the trust is only triggered into existence at the time one of you dies, and at that point the 50% share passes into the trust with the beneficiaries as set out in your wills.

This doesn't give the trust unencumbered ownership of the 50% if the property is encumbered at the time of death, and doesn't remove the first charge on the property placed their by the lender...

So once again we are back to an earlier point, as long as there is nothing in what you have done that prevents a first charge from being registered, I don't see a problem, beyond the points I mentioned earlier about removal of further drawdown rights or additional loans, as you would not be able to further encumber the property as  whole, to the detriment of the 50% owned by the trust...

If the property was already held in a trust then you would have a big issue, but I don't believe that is the case if you have only prepared for protective trusts to be created upon one of your deaths. 

You seem to forget that the equity release sum of money doesn't get paid until the death of the second person (or they go into care) but by then after the Trust is triggered on the 1st death 50% of the equity has already passed in the Trust to one of our children so that the Lender cannot get access to it, so the rest is irrelevant!   I thought the same as you until the Age Partnership advisor explained it to me.   A trust overrides anything else in the will and I don't believe a lender can put a first charge on the property that overrides the Trust.