Children, who’d have them?
As advisers, we always encourage clients to discuss their intentions relating to Equity Release with their children or beneficiaries. Some say that as they have no children or close family they have no concerns, equally, there are those clients who prefer not to discuss their financial affairs with anyone else and we have to be understanding and sympathetic regarding their wishes, particularly where the family is clearly estranged.
An example of this recently involved clients with 5 children, out of which they only spoke to one of them, the others hadn’t been seen for over 20 years…so why would the clients seek out and ask their advice or permission to proceed? Unfortunately, this situation is far from unusual so it’s a really positive sign to visit clients where their children, who have been involved from the beginning of the whole process, often instigating the initial appointment are at the meetings.
But in my experience, children being present at meetings fall into two distinct groups. The first is the group who have understanding and empathy with their parent’s situation, want them to enjoy their retirement and consider that if they ‘spend the lot’ then that’s fine by them. Then we have the second group.
When attending the meeting with the latter, they often say very little, are not prepared to join in the conversation or offer up a few token questions but from their manner and demeanour, it’s clear from the beginning that they’ll do whatever they can to ensure that equity release will not take place…they may offer up a financial solution themselves but this can be fraught with potential problems especially if there’s more than one child.
Over the last year, I have had several where children who are still living at home initially said go-ahead, but then threaten their parents with leaving home and ‘having nothing to do with them in the future’, nothing short of moral blackmail. Equally I have had children who when presented with the effect of the rolled up compound interest, sit with a calculator happily working out what may be left when their parents are well into their 90’s. The purpose of this is clear, as they are calculating how much their inheritance is being affected.
I’m all for children involving themselves with the process of equity release and I always encourage they be present at our meetings but should the needs of the parents be over-ridden by the reduction in the inheritance their children will receive?