Case Study 6

Equity release... and a happy ending

The situation

M rs F” is a widow in her 90s in very robust health who continues to work part-time. She has one daughter and a son-in-law living in a different area of the country who do not maintain a particularly close relationship.

The daughter and son-in-law are relatively wealthy and own various properties abroad. Once a year they took Mrs F on holiday to Portugal and, during one visit, Mrs F met “Mr G” - an ex-patriate English gentleman living locally. The two became close friends. However, Mrs F’s daughter disapproved of the friendship, and even refused to offer Mrs F any more holidays in Portugal.

Mrs F consulted us with a view to arranging an equity release loan so that she could fund her own trips to Portugal. We were the third firm she had consulted: the first two had refused to arrange an equity release without her daughter’s approval, presumably because they were concerned that the daughter might challenge them at some future date.

Although we welcome the involvement of family members, we certainly do not force that to happen where clients prefer to maintain privacy. We were perfectly happy that Mrs F knew her own mind and had the capacity to give her own instructions.

The solution

Because equity release can be a relatively expensive way to raise money, we discussed all the other options open to Mrs F and the nature of equity release in meetings with Mrs F and her solicitor. Both we and her solicitor were perfectly satisfied that Mrs F understood the nature of the arrangement. And while we were slightly concerned about the involvement of Mr G and the daughter’s apparent concern about his friendship with her mother, any doubts were quickly removed by Mrs F.

We arranged a loan which ensured that borrowing costs were kept to a minimum and funds were released.

The outcome

Mrs F contacted us three months later and asked for another meeting. Our immediate concern was that Mrs F might already be looking to borrow more money, reigniting our concerns that Mr G may somehow have misled Mrs F. The only other reason for a meeting we could envisage was that Mrs F’s daughter had found out about the equity release and Mrs F wanted to let us know.

It transpired that Mr G was wealthy in his own right; and after Mrs F’s three trips to Portugal in quick succession, using the money raised by equity release, the friendship had deepened. Mr G had asked her to arrange a meeting so he could thank us personally for arranging the equity release when other firms had apparently feared to do so. He also wanted to repay the amount which Mrs F had borrowed himself.

It transpired he was also visiting to conclude the purchase of a property in the same cul-de-sac as Mrs F which had just become available so their friendship could continue.

All in all this was a really happy result for our client and we were very pleased that the courage of our convictions had helped to facilitate it.

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