As responsible advisers we encourage clients to involve their families in the decision making process of Equity Release but this isn’t always something the clients want to do. More and more clients are now more intent on utilising their property and are Spending their Kids Inheritance…. Often known as Skiing!
One reason for this may be that with the increase in divorce rates for the over 60s, the client’s needs are more pressing than leaving a bequest to the family, or there may be the desire to maintain a comfortable and more fulfilling lifestyle, requiring additional funding well into retirement, but sometimes the reasons can be of a more depressing nature.
Take for example a recent case. After being together for over 25 years, the client’s partner died and when the wills had been set up, she was to inherit the property and his money but on her death, all property and assets would revert to what are effectively, her two step children.
At the time, this seemed to be a reasonable arrangement but now at the age of 87 she is experiencing increasing pressure from the children to provide capital now as they feel aggrieved that they didn’t inherit anything earlier. This is both a worrying and depressing time for the client, a situation now so bad that she now wants the children to receive nothing, preferring to leave money to friends and charities who have consistently helped her through the difficult period of bereavement.
After taking legal advice and being told she cannot change the arrangements under the will, she had been advised by her solicitor that one option is to raise capital on the property through Equity Release. By doing so, she will be retaining her property along with the right to reside there for the future while releasing funds to spend now and by doing so, reducing the amount she will leave to her partner’s children when she eventually dies.
Will she be discussing this with the children? No definitely not! In fact, she is now taking some comfort in the knowledge that she can maintain her lifestyle, provide for her friends and those charities who have been so supportive while ensuring the children will receive as little as possible…in her owns words, hopefully nothing!