Equity release allows homeowners aged 55 and over to access the wealth tied up in their property, providing financial freedom in later life. However, many people wonder whether they need a Will in place when taking out an equity release plan. While having a Will isn’t a legal requirement, it is highly recommended to ensure that your estate is handled according to your wishes. In this article, we’ll explain why having a Will is important, how it can affect your equity release plan, and what happens to your estate if you don’t have one.
Is a Will Required for Equity Release?
No, you don’t legally need a Will to take out an equity release plan. However, without one, your estate—including any remaining property value after the loan is repaid—may not be distributed as you would like.
If you die without a Will, your estate will be handled according to intestacy laws, which dictate who inherits your assets. This can lead to unintended outcomes, especially if you have specific people you want to inherit from you or if you’re not married to your partner.
Why Having a Will is Important with Equity Release
1. Ensuring Your Wishes Are Followed
A Will ensures that any remaining proceeds from your estate, after repaying your equity release loan, go to the people or causes you care about. Without one, your estate may not be passed on as you intended.
2. Protecting Unmarried Partners
If you have a partner but aren’t married or in a civil partnership, they won’t automatically inherit your assets under intestacy rules. A Will ensures they receive what you intend to leave them.
3. Avoiding Family Disputes
A clear, legally binding Will reduces the risk of disputes among family members over inheritance, providing clarity on who should receive what from your estate.
4. Specifying Funeral Wishes and Executors
Your Will allows you to outline your funeral preferences and appoint an executor—someone responsible for managing your estate and repaying your equity release provider.
What Happens to Your Equity Release Loan if You Die Without a Will?
If you pass away without a Will, the process for repaying your equity release loan remains the same:
- Your executors or family will inform the equity release provider of your passing.
- The home is valued and sold to repay the outstanding loan and accrued interest.
- Any remaining funds after repayment are distributed according to intestacy laws.
This means your estate will automatically be passed to your closest living relatives, even if that’s not what you would have wished.
Can I Name My Beneficiaries in My Equity Release Plan?
No—unlike a life insurance policy, you cannot name beneficiaries directly in an equity release plan. Instead, the remaining value of your estate is distributed according to your Will (or intestacy rules if no Will exists).
To ensure your estate is handled as you wish, having a valid and up-to-date Will is crucial.
Can I Protect an Inheritance with Equity Release?
If you’re concerned about leaving something behind for your family, a lot of equity release plans allow you to ring-fence a portion of your home’s value to be passed on as inheritance.
Ways to Protect Your Inheritance:
- Inheritance Protection Guarantee: Some lifetime mortgage plans let you safeguard a percentage of your home’s value for beneficiaries.
- Voluntary Repayments: Many plans allow interest repayments to reduce the overall loan, leaving more for your heirs.
- Monitor Property Value Growth: If your home increases in value, it is likely to leave a surplus even after the equity release loan is repaid.
To explore inheritance protection options, speak to an adviser via our Equity Release Adviser page.
FAQs About Wills and Equity Release
Do I Need a Solicitor to Write a Will?
No, but using a solicitor ensures that your Will is legally valid and free from errors that could cause disputes.
Does My Will Affect My Equity Release Plan?
No, your Will does not impact how your equity release loan is handled. However, it determines how any remaining assets are distributed after repayment.
Can My Family Keep My Home After I Die?
Yes—but they must repay the outstanding equity release loan first, either by selling the property or using other funds. Learn more in our guide How Does Equity Release Work When You Die?.
What Happens If I Don’t Have a Will?
Your estate will be handled under intestacy laws, which may not align with your wishes.
Can I Change My Will After Taking Equity Release?
Yes, you can update your Will at any time to reflect changes in your financial situation or family circumstances.
Next Steps
While a Will is not a requirement for equity release, it is a crucial document to ensure that your estate is distributed according to your wishes. To take the next steps:
- Speak to an expert on our Equity Release Adviser page.
- Use our Equity Release Calculator to estimate how much you could unlock.
- Read related guides to learn more:
By having a Will in place, you can ensure that your assets—including any remaining property value after equity release—is handled exactly as you wish.
Wills are not regulated by the Financial Conduct Authority.
