Friday, May 25, 2007
Category:
Consolidation
AA Legal Services recently commissioned a survey among 2,600 elderly parents and adult children to delve into attitudes towards inheritance.
Their research reveals that seven in ten young Brits most fear inheriting huge debts when their parents pass away.
Recent changes to inheritance tax lack appeal for millions of young homeowners. Currently young people are being offered up to six times their salary to get on the property ladder, and many fear their elderly parents will spend their inheritance during their twilight years leaving their children with a legacy of debt when they die.
Concerns were expressed by more than four in five people under 35 about what may be discovered in parent’s wills. One in three were concerned about the prospect of sibling rivalry where they feared that any wealth would not be shared equally between brothers and sisters. This may be as a result of care costs or equity release schemes. Some of the children’s fears proved to be well founded. Examples of things that would irritate children would be money being left to a charity or to a step parent (15% and 10% respectively) but were plans that parents had actually made.
In some instances, poor family communication is worsening the problem. Around three in ten parents over the age of 55 (28%) have not yet told their children about their will – and half of these have no intention of sharing the contents of their will before they die (14%).
AA Legal Services have called the fact that few adult children have actually made a will themselves alarming. Only one in five couples with children under the age of 11 say they have made a will (20%).
James Molloy, Head of AA Legal Services says: “Recent concern over the cost of care homes, equity release schemes and growing consumer debt among the elderly are changing the way many young people view the concept of inheritance. As young families take on bigger and bigger debts to get a foot on the property ladder, few are banking on a future inheritance to help clear the mortgage.
“It is also alarming that so few young couples have made a will. On buying a home it should be one of the first tasks that is undertaken, but our research is telling us that writing a will is usually lost in the excitement of choosing new carpets and opening the tin of magnolia paint.”
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Homeowners who are concerned about mounting debt and would rather not leave a mountain of unpaid bills for their offspring could look at a consolidation loan as an option to pay off their debts while they are still young. Debt consolidation loans move all existing debt into one straightforward monthly payment. Multiple store and credit card payments will be collected and paid at the same time every month with a debt consolidation loan, so homeowners can plan ahead with confidence. A debt consolidation loan is paid over a term to suit the borrower from 5 to 25 years. Homeowners should remember that repaying over a longer term will increase overall interest charges.
