Equity release: why trusted legal advice matters
When you need a large injection of cash, equity release can seem like a quick and easy win. Releasing capital from your family home, however, is a major decision and can come with some high risks. It’s therefore important to seek independent legal advice to protect your interests before signing on the dotted line.
The Equity Release Council, an industry body that helps to safeguard consumers, suggests you appoint a solicitor as soon as a plan has been recommended by a financial adviser.
How a solicitor can support your equity release plans
Providing conveyancing services
As with a traditional property purchase, there are specific steps that need to be completed before you and a lender can proceed with an equity release plan. For example, a solicitor can request a copy of your title deeds and complete money laundering checks.
A solicitor can also identify if there are any factors that might affect the transaction, such as a tenants in common agreement or a trust, and help you find practical solutions.
Explaining equity release impacts
An experienced solicitor can talk you through how your equity release plans could impact the future ownership, sale and value of your home. This will depend on whether you have opted for a lifetime mortgage or a home reversion plan, as well as your lender’s terms and conditions.
Depending on your personal circumstances, equity release can have major ramifications for your loved ones. For example, if you take out a joint plan, your partner might have to sell the property to pay off the remaining loan when you die or move into permanent residential care.
Understanding how equity release might influence your future choices and relationships is also important. The average life expectancy in the UK is around 80 years old. Some people can apply for equity release from the age of 55 – your circumstances could change significantly during this time. For example, if a new partner or a relative aged 17 or over moves in, they would have to waive any rights to the property.
Safeguarding estate planning
Equity release doesn’t just impact current dependents but also future beneficiaries. Although some schemes offer inheritance protection, equity release reduces the share of the property that can be passed on to your heirs.
A solicitor can help make sure your equity release plans fit with your estate planning and assess any changes to inheritance tax liabilities. It’s a good idea to also discuss your decision with family members, so they understand how their inheritance will be affected.
Finding the right solicitor
The Equity Release Council is a good place to start when seeking legal advice. To become members, legal – and financial – advisers have to meet high standards that are designed to protect borrowers’ interests.
Attwaters Solicitors is a member of the Equity Release Council and has 30-plus years’ experience of helping people make informed decisions about equity release.
As a full service law firm, we can not only help you safely release cash from your family home, but also assist with drawing up wills and handling trusts. Get in touch to find out how we make equity release work for you.
