Death & Equity Release in 2022

What Will Happen to My Equity Release Plan When I Die? What You Must Know
Contributors: Nicola Date, Katherine Read. Reviewed by Francis Hui
It Is an Unfortunate Reality That We All Have to Face Eventually, Everyone Dies. Death Affects Us in Different Ways, It Can Be a Difficult Time for Those Who Are Left Behind. But What Does Death Mean When You Have an Equity Release Plan?

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Are you considering equity release, but don’t know what happens when you die?

This is a very important question, but luckily we have all the answers.

In this article, we’ll cover some of the most common scenarios and talk about what you should do in each case.

Continue reading to find out more!

What Should My Beneficiaries Do When I Die?

Your beneficiaries1 need to take several steps when you die.

The first thing they’ll do is provide a death certificate and the original will of your equity release plan if one exists.

They’ll also need proof that they’re qualified as executors2 or administrators for your estate before going any further with it.

Your beneficiaries may be able to contact the company you borrowed money from to inform them about your death so that the loan can go through its normal process without interruption.

Once this has been done, they can start making decisions about how best to use what funds are available.

In addition, they can prepare themselves for whatever expenses there might be at some point down the line,

Based on what form of treatment you received through your equity release plan.

How Quickly Must the Plan Be Repaid?

If you don’t know by now, you are not obligated to make any repayments after releasing equity from your home.

When you pass away or move into long-term care, there will need to be someone designated to working with your equity release company to settle your plan.

The equity released from your home needs to be repaid immediately from the sale of your home or alternatively,

By your family members, using additional means, if they wish to retain ownership of your property.

Great News!

The equity release council ensures that your family will never pay more than the sale value of your home.

Joint and Individual Plans on Death

You can release equity with your spouse, or alone. Note that you or your partner can remain in your home, even once the other has passed away.

The plan will only come to an end when both parties are no longer with us.

Joint Plans Where the Last Applicant Has Died

Suppose you have a joint equity release plan with your spouse.

In that case, both parties will need to pass away before it is due to be repaid.

Just be sure that your family has both death certificates available when the time comes.

Both these certificates will be required, as well as original copies of the 2 wills3 so that everything gets taken care of properly.

Single Plans on Death

When you pass away, your family will need to provide your equity release company with a death certificate.

They can contact your financial adviser to assist with this.

From there, the process to sell your house will be actioned.

This entire process can take up to 6 months.

Will a Solicitor Need to Get Involved?

This will depend on what type of equity release plan you have.

Suppose you have a single equity release plan where the last applicant has died.

In that case, it’s not necessary because death certificates and original wills won’t be needed with this type of repayment agreement.

If, however, you’re dealing with joint plans that require 2 signatures or more on the application form to qualify for an offer, then yes.

In that case, they will need to get involved when one person from those who signed up before passing away dies.

In either case, your beneficiaries should contact your equity release company about how best to proceed after hearing about your death.

Should My Beneficiaries Speak to a Financial Adviser?

They should probably do this regardless of what type of equity release plan you had so that any decisions about how to use the remaining funds aren’t made without all the facts at hand.

After speaking with a financial adviser, your beneficiaries will want to decide how best to proceed,

Based on whether or not treatment was being received through an equity release plan because there are different options available for them depending on which situation applies in this case.

Making the Final Arrangements

It depends on the company and the type of equity release plan you had, but usually, these things take about 6 months.

If your family doesn’t want or is unable to wait for this process.

In that case, their beneficiaries will need to contact their estate lawyer or accountant who worked with your original solicitor.

This could also mean arranging final payments while working closely with any other assets4 leftover from your estate,

Which may include savings accounts or shares depending on how much you were left with as well as any other investments you may have had.

There’s not too much to do on the part of your beneficiaries in this case,

Because it all depends on what type of equity release plan they had and whether or not treatment was being received through that arrangement when you passed away.

So make sure to discuss everything before deciding on how best to proceed from there based on these factors first,

No matter if there is an estate lawyer or accountant involved or not at this point.

Common Questions

Can My Beneficiaries Take Over the Payments?

How Can I Be Certain That Nothing Goes Wrong After My Passing?

What Should Be Done First Before Applying for Insolvency?

What Happens If There's No Estate Lawyer or Accountant Involved at This Point?

In Conclusion

Equity release loans are different from most other forms of lending because they require property as collateral.

That means that the lender has more say in what happens with your home after you’ve died.

Essentially, it will be sold and your loan will be repaid.

Luckily, the Equity Release Council ensures that a no negative equity guarantee is in place.

This means that your family will never owe more than the sale value of your estate, even if property prices have plummeted.

If you have any dependents, like children or elderly parents, make sure they know about their responsibilities before signing up for an equity release scheme.

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Editorial Note: This content has been independently collected by the SovereignBoss advisor team and is offered on a non-advised basis. Sovereignboss may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations. Learn more about our editorial guidelines.

rachel w

Rachel Wait
Personal Finance Journalist

Rachel is an experienced finance journalist and editor with a particular interest in personal finance and consumer affairs. She has vast experience writing about money issues, property, insurance, and consumer affairs, and you’ll find her articles regularly featured in top media and newspaper publications.
John Lawson

Written by
John Lawson
Founder SovereignBoss

John is passionate about education and has made it his life-long mission to assist UK citizens on their future financial options, with a specialist interest in equity release, and SovereignBoss is the natural extension of this passion.

Reviewed by
Francis Hui
Senior Risk Manager

Having held various high-level roles across the industry, Francis is truly an expert in aiding UK citizens in their financial decisions and risk analysis. His unique insight and statistical knowledge make him the perfect person to help you take your financial future to the next level.
kath icon

Katherine Read
Consumer Affairs Writer

Since joining the editorial team at SovereignBoss, Katherine has become focused on bringing transparency to finances and opportunities for those approaching retirement age. She writes on the topics of equity release, home reversion, and mortgages.

Nicola Date
Writer & Journalist

Nicola is a financial writer for SovereignBoss and is passionate about the opportunities that equity release can open up for homeowners. Her extensive business experience and deep understanding of the industry means that she’s always up-to-date with the latest developments.

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