Q. My wife and I have been told by our son that it would be better to co-own our house as ‘tenants-in-common’ for both Inheritance Tax and care fee planning purposes. I am not sure that he is right. Can you clarify?
A. There are two ways of owning property jointly, either as Joint Tenants (where on the death of the first of you the property passes outright to the survivor by operation of law) or as Tenants-in-Common (where each of you can dictate what should happen to your share of the property via your Will (or the Rules of Intestacy if you don’t leave a Will) or lifetime trust.)
Owning property as Joint Tenants leaves no room for any planning with your share of the property, as the whole property will pass automatically to your wife on your death, and not under the terms of your Will, lifetime planning or the Intestacy Rules.
Your son is right in that owning your property as Tenants-in-Common leaves more flexibility to plan under the terms of your Will or in your lifetime. However, it is not the owning as Tenants-in-Common alone that provides any advantage in itself, but the planning opportunity that this provides. It will be the terms of your Will or any lifetime planning that you enter into that deals with your share of the property to try and obtain the best position for Inheritance Tax or Care Home fee planning. You should therefore take appropriate advice from a suitably qualified and experienced solicitor if you are considering changing the way you own your joint property for such planning.