Equity Release

What to Know About Equity Release and Children’s Inheritance

children's inheritance

If you’re a homeowner over the age of 55 and looking for some extra cash, you may be considering equity release. However, when you tap into the equity in your home, you may wonder how this will affect your children’s inheritance.   Although you may have less to leave to your beneficiaries, you can, in fact, still leave an inheritance for your children.

If you’re considering taking out equity release but want to find out how it will impact your children’s inheritance, we can help. This article will discuss what you need to know about how equity release affects your children’s inheritance.

What is Equity Release?

An equity release product will allow you to get a loan on the equity in your home to use as you choose.

A lifetime mortgage is when the amount of your loan and all accrued interest are rolled together and paid after you pass away or enter into long-term care. All funds left over and any other assets in your estate are passed on to your children.

Who Owns Your House After You Die?

When you take out a lifetime mortgage, you remain the owner of the property. When you die, the amount of the loan plus interest gets paid back to the lender to repay the money they lent you previously.

Property Value Increases

You and your children will benefit from increases in property value, even after you’ve taken out an equity release loan. Many equity release clients are in their 50s and 60s, meaning they have a substantial amount of years left to enjoy life. These extra years will certainly allow time for the property value to increase, leading to more funds available to leave as an inheritance to your children.

Equity Release and Inheritance Tax

One of the most important aspects of equity release is how it affects your Inheritance Tax liability. When you release equity in your home, not only does that decrease the value of your estate but it can also reduce the amount of inheritance tax owed by your estate after your passing.

Trust Elizabeth Middleton Solicitors to Protect Your Assets and Your Future

Equity release can have an impact on the inheritance passed to your children when you die. Knowing your options and getting your questions answered by an Equity Release Mortgage Broker before proceeding with an equity release plan is vital. And having an experienced, qualified solicitor to guide you through the process after the Equity Release Mortgage Broker has helped you choose the right product for you will ensure that the Conveyancing process runs smoothly.

At Elizabeth Middleton Solicitors, we want to help you plan for the future and protect your assets. We know that everyone’s circumstances are different, so our team will work to draft your Lasting powers of Attorney, Wills, and tax and estate planning to suit your specific needs.

Contact us today to schedule a meeting.