john d hamilton posted

Our son is soon to get a mortgage to buy his own flat and also expects to
get married in a year or so. We have seen others having the unfortunate
experience of loosing most of their savings after a divorce. Since the
divorce rate is so high these days, we thought if I or my wife were put down
as 'owners in common' on our son's property deeds, then a future spouse
could 'not' walk off undeservedly with half of our son's property value.
Which would include his life's savings invested in the flat.

It's true that she couldn't get your share, but she could get half, or
more likely all, of *his* share.

And also the taxman will regard his occupancy of your share of the house
as a "benefit in kind" for which he should pay you the market rent, and
so they will assess you for the income tax on this imaginary rent. And
then, when you die and he inherits your share, he will pay inheritance
tax on that. Or if you give him your share before you die, you will have
to pay capital gains tax on its increase in value. It's not a good idea.

However, your problem is a common one which I too expect to face soon
enough. I have concluded that in the current legal climate there is only
one bulletproof solution. Your son should *not* marry his girlfriend
unless either (i) she is bringing an equivalent financial contribution
to the marriage; or (ii) he is prepared to wave goodbye to half his
property, and probably much more than that if they have children.

If they (or rather, she) insist on getting married, suggest your son
uses some other method to protect his capital. Pre-nuptial agreements
are these days becoming quite common and the divorce courts do pay some
attention to them (though AIUI they don't regard them as legally
binding).

Or he could put the house in some kind of discretionary trust with you
as trustees.

I do not normally say this on this group, but it is probably worth
taking professional advice on this. But *not* from a high street
solicitor. Find a qualified trust and estate practitioner. (see
www.step.org)

I am 65 next year and my wife is now 60, So I hope to make a claim for the
State Pension for both of us quite soon, which will be our sole source of
income.

But if we (my wife and I) are put down as *part owners* of our son's flat on
the title deeds, will that then be considered that we ourselves actually
'own' half the substantial savings our son will invest in the new flat?

Well, you'll own the fraction of the flat that the agreement says you
own, anyway. Doesn't have to be half. And it'll be net of the mortgage
debt.

Because if this is the case, might it not considerably reduce, or eliminate
any State Pension that might otherwise be due to us?

Pension credit, yes. Also it would compromise your entitlement to local
authority funded long-term care. As well as the disadvantages I listed
above. Don't do it.

--
Les
"God will save her, fear you not, be you the men you've been.
Get you the sons your fathers got and God will save the Queen."