Ageing borrowers and the grand-lord boom pose estate planning risks
Recent headlines highlighting that 1 in 20 mortgage customers won’t repay their mortgage until they are over 70 years old and the headlines suggesting that the Chancellor’s Budget announcements regarding pensions will signal a boom in Buy to Let purchases amongst retirees shows the near and in-retirement market continues to be an important sector for mortgage brokers.
‘As brokers deal with these clients they will have financial implications to consider’ acknowledged Eddie Goldsmith, Senior Partner at property solicitors Goldsmith Williams ‘but they shouldn’t lose sight of the legal implications particular to this age group. For example in situations where clients are taking up a mortgage which will continue into retirement and older age it is important that they are encouraged to draw up a will. Brokers should know whether or not their client has a will in place as asking about this should have formed part of the advice fact find.
Those older borrowers who die and who do not have a Will in place could leave behind a complex legal situation for their families to address at an already stressful time. The mortgage terms and conditions coupled with the lender’s deceased policy will determine how the death of a joint borrower is addressed – for example the mortgage terms and conditions may state that the lender’s power of sale arises 6 months after only one of the borrowers dies – this already complex situation would be magnified if the deceased is intestate.
A will is also critical where Buy to Let properties have been purchased to deliver pension particularly where there is a couple involved and the survivor is reliant upon that income.
Brokers should ensure they signpost older clients to a conveyancing firm that takes a comprehensive approach to the client’s legal needs and encourages the client to take legal advice regarding estate planning. Those brokers who take this wider view can build their reputation by differentiating their service offer to this older client group.’
Content correct at time of publication