Not sure if this is the best place to post but here goes. I've tried to make this as simple as possible...
Some years ago my parents used an equity release mortgage on their home to provide my sister with £30K towards the cost of her new home. In the interests of fairness they offered me the same sum which I declined as I had no need of it. (There are no other siblings).
At the same time they rewrote their wills so that when their house was sold after the second death my sister would effectively pay the equity release mortgage off out of her half of the estate so that I would not be disadvantaged.
The mounting interest was starting to worry my dad so they have been paying off the mortgage with lump sums when they can. Now they are proposing to pay off the entire amount remaining.
If they do this the interest will have amounted to £18K so they have effectively made a gift to her of £48K.
What they are now suggesting is that when the house is sold on the second death that my sister pays me half that amount (£24K) effectively sharing the gift equally between us.
Leaving aside the legal details of ensuring this would happen, is this intrinsicly fair?
I thought it was but my dad seems to be worried that I could be missing out as it could be many years until I receive 'my' £24K by which time it will be worth much less. Whereas I suppose she's had the benefit of £30K at today's value? (Not sure about this).
If the mortgage had been left to run then he seems to think I would have been better off (?) - not sure if this is what he meant though.
I'm usually good with figures but I'm having trouble getting my head around this.
My parents have always been scrupulously fair with my sister and I and I they are very keen to 'do the right thing'.
Any thoughts/comments gratefully received.
Thanks
Wacca
Some years ago my parents used an equity release mortgage on their home to provide my sister with £30K towards the cost of her new home. In the interests of fairness they offered me the same sum which I declined as I had no need of it. (There are no other siblings).
At the same time they rewrote their wills so that when their house was sold after the second death my sister would effectively pay the equity release mortgage off out of her half of the estate so that I would not be disadvantaged.
The mounting interest was starting to worry my dad so they have been paying off the mortgage with lump sums when they can. Now they are proposing to pay off the entire amount remaining.
If they do this the interest will have amounted to £18K so they have effectively made a gift to her of £48K.
What they are now suggesting is that when the house is sold on the second death that my sister pays me half that amount (£24K) effectively sharing the gift equally between us.
Leaving aside the legal details of ensuring this would happen, is this intrinsicly fair?
I thought it was but my dad seems to be worried that I could be missing out as it could be many years until I receive 'my' £24K by which time it will be worth much less. Whereas I suppose she's had the benefit of £30K at today's value? (Not sure about this).
If the mortgage had been left to run then he seems to think I would have been better off (?) - not sure if this is what he meant though.
I'm usually good with figures but I'm having trouble getting my head around this.
My parents have always been scrupulously fair with my sister and I and I they are very keen to 'do the right thing'.
Any thoughts/comments gratefully received.
Thanks
Wacca