Jonathan Wilkey 01594 833042 Gwyn James Solicitors

1. Jonathan Wilkey01594 833042Gwyn James Solicitors Legal Workshop Issues in Equity Release

2. The property is in the applicant’s sole name. Does it need to be transferred into joint names before the equity release can proceed?

3. Offer and applicants must match – evidence of change of ownership – death/divorce? • Transfer of equity • Declaration of Trust? • Simultaneous completion with equity release • Tax advice? • Additional Costs – Conveyancing Fees. Indemnity Insurance

4. The property is in the joint names of the applicant and deceased husband. There is a Restriction on the title denoting that the property was held by them as tenants in common. This was because the husband was in long-term care before he died. Mr’s Will left a life interest in his share of the property to the wife, but the remainder to the children. What can the applicant do?

5. Wind up Trust • Consent of children/capital advance within Trust • Independent legal advice for children • Removal of Restriction • Will and LPA

6. The applicant has a leasehold flat but does not want the other flat owners in the block to know his business. Why does the solicitor have to contact the landlord/management company? The applicant says that he has paid his ground rent and service charge.

7. Requirement in Lease • Notice of Charge to the Landlord required on completion • Look at product provider’s requirements • Dispute with Landlord/Management Company? • Is the building properly insured?

8. The applicant wishes to purchase the freehold of his property. Can this be done simultaneously with an equity release?

9. Yes. Provider will usually require security on both freehold and leasehold titles. • Undertaking to pay Landlord’s costs requires money from client upfront. • Liaise with Landlord’s solicitor • Dovetail the completion dates

10. We wish to sever the joint tenancy of our home to ensure that the children from our previous marriages inherit our respective shares in the property. Will the equity release provider permit this?

11. Check product provider requirements – usually no problem • New Restriction in title as tenants in common • Who is the real property owner? For example, 50-50 or 99-1? • Declaration of Trust? • Make/update Wills/LPA

12. Our son continues to live at home with us and he has been asked by the equity release provider to sign an occupier’s agreement and take advice from an independent solicitor. The solicitor he went to is totally against equity release and said that there will be no inheritance left when we die. We are only releasing £30,000 from a property worth £380,000. Why can’t our son have independent advice from the firm we have instructed?

13. Potential conflict of interests • Check provider’s requirements – not always needed, depending on the relationship • Find an alternative solicitor?

14. My father has Alzheimers Disease and is unable to make decisions for himself. My mother wishes to draw down capital from their home to make a gift to me to extend my house and to have a sum set aside to fund my father’s care. My father made an enduring power of attorney a number of years ago, appointing my mother and myself as attorneys. Can an equity release scheme be used in these circumstances?

15. EPA registered at Court of Protection • Person signing under EPA (“Attorney”) needs to make COP application, not the spouse/co-owner. • Order from COP required for consent to the equity release and gift • Can take 21 weeks +

16. My husband and I were advised to make nil-rate band discretionary trust Wills to mitigate inheritance tax. All of our capital is tied up in the family home, valued at £560,000. My husband died last year and I am struggling financially. I want to draw down on the equity in the property to maintain my standard of living and make gifts to my grandchildren to help them on to the property ladder. How can I do this if half of the property is tied up in a trust?

17. Within 2 years of husband’s death, wind up trust as if it had never taken effect (benefit from 2 x nil rate bands) • Specialist legal advice required (usually from solicitors who drew up the Trust) • Will take time to sort out

18. I am a financial adviser and I am worried about the issue of undue influence and the possibility of a negligence claim if I interview my client with members of her family present. I was approached by my client’s son about equity release and he has insisted on being present when I visit his mother. What can I do to protect myself?

19. We are not financial advisers so seek FSA guidance • See clients alone before seeing them with family • Keep written records

20. My client is very keen on equity release. When I met her to take instructions she seemed a bit strange and kept talking about her days in the war and how she met the Beatles at a railway station in York in the 1960s. As far as I am concerned, she told me she owned her home, how much it was worth and she needed the money. What do I have to do as a financial adviser to ensure that she has capacity to give me instructions and enter into an equity release contract? What information should I record on file and how long should I retain my file and associated papers?

21. Short term v long term memory loss • Satisfied as to understanding? • Doctor’s certificate? • Keep written records as required by FSA or longer at your discretion – particularly if a gift involved