When a loved one passes away, it can be difficult to prioritise financial arrangements – however, it is important to prepare for when such a scenario presents itself. If you have already looked at taking out an equity release plan, or have started the ball rolling, but still have questions about what happens next, you’ve come to the right place.
For many, their home is their biggest investment and largest financial asset, so if you’re planning on releasing the equity from it in your retirement, it is important you know what happens after you’ve passed away, and what your loved ones need to do.
With an agreement like this, you get a lump sum or regular payments with the understanding that the scheme provider has been repaid. However, if you should pass away first, or end up in long-term care, your home will be sold, and once the agent and solicitor fees have been paid, any remaining money will go to those in your agreement.
Many plans now come with a guarantee against negative equity, which means that the lender will ensure that any beneficiaries won’t have to repay more than the value of your home.