Financial arrangements on remarriage

[minisha]

Well, not remarriage, we are planning to live together. Or were.

I am divorced with two children under 7. I have no mortgage on my home and currently have it on the market to sell. I should realise at least 400K in equity.

 

My partner of two and a half years has a house which is in negative equity. We both agree that he should rent it out and let it appreciate. Consequently he is contributing nothing financially to the move.

 

I assumed that the title to the new house would reflect the equity that we each put in. We would split the additional mortgage 50/50 and that would also be reflected in the title.

 

I'm very surprised to hear that my partner disagrees. He says that if he is going to be a father to my children and take on financial responsibility for them then I need to split the whole title 50/50 which means that if we split up say in two years, technically he would be entitled to 200K. He says that he would never do that and that this is a) about trust and b) about power. He says we need to be equals in the house and that if I owned four fifths of the house then he would basically be a tenant and would not feel like a man.

 

I'm distressed and worried about this. I assumed that my share would stay my share. I would pass that share in the event of my death to my children; my life insurance would pay off the mortgage and he would have either a life interest or the right to stay in the property until the kids hit 21. Am I being unreasonable? Is he? I see his point and I feel like I am the one creating problems and appearing distrustful. I don't know what to do.

[InceptorsRule]

I think you need to end this relationship. It basically sounds like the only reason this guy is with you is to maneuver for 1/2 of your house value.

 

IN NO WAY should you get married to this guy or buy a house or mingle finances, certainly NOT without consulting a qualified matrimonial attorney and if you DO get married GET A PRENUP.

[minisha]

God, I find that so hard to swallow. He is saying that he will contribute financially 50/50 to the children e.g. holidays, food, clothes, schooling etc and that if over 10 or 20 years he would be left with a 5% share in our family home would be too bitter a pill to swallow. When he puts like that doesn't that sound a even worthy of consideration? Or am I turning into a doormat?

[xxoo]

If the 400k is for your children's future, maybe you should put a large portion of that money in an account for that purpose, with the help of a financial advisor.

 

Use a smaller portion to invest in the mutual family home. Buy a home that the two of you can afford without the 400k down payment, and be equal owners of the new home.

 

I do think the family home should be the family home--as much his (including on paper) as yours. I wouldn't settle for anything less, but I would compromise on a smaller home to make that happen.

[minisha]

XXoo, unfortunately it's not an option to buy a smaller home. 1. he can't get a mortgage because he's tied up in his own house and it would be stupid to sell his place at a loss and 2. I work part-time so a small mortgage is where I have to be; 3. where we're moving to, 400K plus a small mortgage isn't going to get us a large family home by any standard. We can't really get any smaller.

[PortuguesePrincess80]

XXoo, unfortunately it's not an option to buy a smaller home. 1. he can't get a mortgage because he's tied up in his own house and it would be stupid to sell his place at a loss and 2. I work part-time so a small mortgage is where I have to be; 3. where we're moving to, 400K plus a small mortgage isn't going to get us a large family home by any standard. We can't really get any smaller.

 

What I would recommend is when you do find a home and put that down payment on it...you have a lawyer draw up some sort of protection on that money! My mother did that when she moved with my sister...and was the only one that put a down payment on the house. That way at least you know your walking away with what you've put in it. If you share the mortgage with your bf and any money made on the home thereafter can be split up accordingly. I'm just wondering why you would want to risk all of this though? And secondly..if hes tied up in a mortgage already and most likely cant get a second mortgage..can his name still be on the deed?

[InceptorsRule]

God, I find that so hard to swallow.

 

You MUST at least consult with a good attorney about this. You HAVE TO protect yourself.

 

 

He is saying that he will contribute financially 50/50 to the children e.g. holidays, food, clothes, schooling etc and that if over 10 or 20 years he would be left with a 5% share in our family home would be too bitter a pill to swallow.

 

Has he actually proposed marriage to you? Has he agreed to adopt your children? If not, he has no legal responsibility to support your children. If you put his name on the title to your house, or invest your equity in a house in which his name is on the title, then he has a LEGAL RIGHT to a 50-50 share REGARDLESS of what happens to your relationship, thereafter.

 

CONSULT AN ATTORNEY.

 

When he puts like that doesn't that sound a even worthy of consideration? Or am I turning into a doormat?

 

 

Ding dong, Avon calling.

[xxoo]

XXoo, unfortunately it's not an option to buy a smaller home. 1. he can't get a mortgage because he's tied up in his own house and it would be stupid to sell his place at a loss and 2. I work part-time so a small mortgage is where I have to be; 3. where we're moving to, 400K plus a small mortgage isn't going to get us a large family home by any standard. We can't really get any smaller.

 

Do either of you earn an income that would support you in this high cost of living area? If not, why are you moving there?

 

If he has a high enough income to justify living in that area, then consider renting a family home until you are in a position to buy together. He should be able to rent in his name while owning another property.

 

Have you actually spoken to a bank about him securing a mortgage while his first property is rented? Does he have credit issues?

 

What would you (you plural--you and your significant other) do if you didn't have the proceeds from your home? Could you not afford to live together?

 

Have you seen an attorney or financial advisor to advise you about your options? 400K is a lot of money, and I'd definitely pay for advice to protect it.

[minisha]

We can afford to move to the area simply because our mortgage would be small thanks to my hefty deposit.

 

He's saying that although he won't legally be responsible (he can't adopt, father is in their lives) he will effectively be in their lives as their father figure, and would be paying financially for them. He has taken an avid interest in them and is very very good with them.. He says my reluctance to split equally shows a reluctance on my part to fully commit to the relationship and trust him and that I should just know that he would never screw me over. So if we split up, he will say that it is my fault and that my trust issues have got in the way of my and my children's happiness. He's sticking to his guns on this one.

 

xxoo, moving to this area is down mainly to the excellent schools (free) that are there. He won't move into our current home to try things out with me as it is my ex marital home -I can understand that . As for renting - far more expensive in terms of monthly payments than a mortgage.

 

It took me nearly eight months to introduce him to the children, I was very cautious about their little hearts getting involved with him. Now that they are, am I being a fool for putting their financial security above their emotional security?

 

I'm guessing we're going to split up over this and I feel very very sad about it. We haven't spoken for a week whilst we think this stuff over.

Edited August 19, 2010 by minisha

[KikiW]

I am thinking if you two haven't spoken in a week over this, your relationship is not as strong as it should be.

 

You are entitled to protect your assets, because they are what will help you with your children. He's all proud of himself because he's going to contribute "50%" of the childrens' needs? Your kids are part of the package when it comes to a life with you. Unless you are contributing all the up-front cash but then he is taking care of all the living expenses after that, then he has to realize that you are contributing a significantly larger amount. And yeah, if you put in 400K and he decides to walk in a year or 2, he gets 200K? Sounds like a nice fat payday to me.

 

My fiance and I talked at length about finances before moving in together. Our accounts are open to each other and we work on paying the bills together. Talking abut money can suck, but if you can't have a discussion about it without him getting upset and indignant, I think you need to make a change.

 

As for your kids, I understand. But they will adapt. You will take it slow next time as well, but they will benefit from having a nice guy around, whether they are there for the long term or not. Sometimes regular friends float in and out of your life - do you shield them from that, or let them enjoy their time with those friends with the time they have?

[scrybe74]

We can afford to move to the area simply because our mortgage would be small thanks to my hefty deposit.

 

He's saying that although he won't legally be responsible (he can't adopt, father is in their lives) he will effectively be in their lives as their father figure, and would be paying financially for them. He has taken an avid interest in them and is very very good with them.. He says my reluctance to split equally shows a reluctance on my part to fully commit to the relationship and trust him and that I should just know that he would never screw me over. So if we split up, he will say that it is my fault and that my trust issues have got in the way of my and my children's happiness. He's sticking to his guns on this one.

 

xxoo, moving to this area is down mainly to the excellent schools (free) that are there. He won't move into our current home to try things out with me as it is my ex marital home -I can understand that . As for renting - far more expensive in terms of monthly payments than a mortgage.

 

It took me nearly eight months to introduce him to the children, I was very cautious about their little hearts getting involved with him. Now that they are, am I being a fool for putting their financial security above their emotional security?

 

I'm guessing we're going to split up over this and I feel very very sad about it. We haven't spoken for a week whilst we think this stuff over.

 

First of all let me congratulate you on actually having this conversation BEFORE you make a life changing move. Too many couples assume too many things. We all are raised with different beliefs and relationships about money and those differences need to be hammered out beforehand.

 

Now...I think this guy has a point about his feelings on the matter...but only a small point. You have no guarantee on the many promises he's making and 400k is a BIG gamble on faith. With a 50% fail rate in official marriages (and it sounds like you two aren't even getting married) you're betting on a 50/50 chance that he'll be there for you financially, physically and emotionally the way he says he is. Promises aren't worth much nowadays. I'm sorry.

 

He needs to get over himself. Here's my solution.....set a date....say...10 years or so. Once you pass that landmark you can always change the ownership equity right? After 10 years you both agree to split all debt and equity 50/50. If he's not able to handle that then there is something very wrong.

[kuma]

minisha, you should keep his and your finances separate until you're actually married. Buying a house together is not a good idea.

[minisha]

KikiW, he tells me he would never leave me and would never screw me over. He says if he walked in two years he wouldn't take anything more than what he put in. He says HE feels insecure that in 10 or 15 years I could kick him out and what would he have to show for it? When I tell him he'll still have his house and a 50% share of whatever INCREASE in value of our home, he's not interested in hearing it. He says I should trust him and that if I was fully committed to him, i would show it by sharing everything with him especially as he is going to be looking after the children with me and providing emotional and financial support.

 

My lawyer said that if I did decide to do it 50/50 with him on my equity, he would insist I sign a disclaimer to protect him (my lawyer) from any claim for professional negligence.

 

I'm bracing myself for the sadness and loneliness that will follow when this ends. Unless he turns around and surprises me with a change of heart.

[minisha]

Scryber, I like the 10 year idea. I'll put that to him but then it feels a little like I'm going to give him a financial reward to stay with me. And at the end of the day, i still feel like it's my children's money.

 

Kuma, marriage would be worse. Here in the UK, the law favours a 50/50 split on divorce. Prenups are not taken as seriously here as in the US and I fear I would be even more vulnerable. I know from experience that divorce is all too easy.

[xxoo]

He says I should trust him and that if I was fully committed to him, i would show it by sharing everything with him especially as he is going to be looking after the children with me and providing emotional and financial support.

 

It sounds like it may be a stalemate, but I clarify that this is this children's money. You can share all your assets 50/50, but the children's money is separate. And if the children's money is invested in a home, there needs to be legal action to protect it.

[OliveOyl]

I don't get it. Why does "trust in the relationship" have anything to do with being able to walk away with $200k if the relationship goes sour?

 

They are separate issues. I would never agree to the 50-50 equity unless I was married, and even going into a marriage with such a discrepancy in resources means I'd probably set up a prenup.

 

50% of marriages fail.... and women usually fare far worse then men. Doesn't matter whether the money is "for the kids" or for you. I wouldn't do it.

[cookie2]

Here in the UK, the law favours a 50/50 split on divorce.

Err nope, you're totally wrong there. Divorce courts divide assets on a basis of greatest need. If, for example, you give up work to become a housewife and full-time mother whilst he carries on with a high-paid job, you would most likely get 100% of the house on divorce. The court would rule that you need the house for the children (whose welfare always comes first), whereas he can rent or buy a new house with his income. He would lose everything he'd paid into it.

 

I'm actually in a situation where I had to look into this, too. My house was 100% owned by me, it was in my sole name and I owned it for 5 years before even meeting STBXW, I have always paid the mortgage and all bills, which are also in my sole name. On marriage nothing changed, the house and mortgage stayed in my sole name and I carried on paying 100% of the bills from my sole bank account. She had an affair 9 months after getting married, yet if we'd had children, she could have made a claim for the house... and probably won, leaving me with nothing. How is that fair on me?!

 

It's probably worth seeing a solicitor because the laws in this respect do not really seem to follow common sense! Many solicitors do a free initial consultation, which is most likely all you'll need.

[You Go Girl]

This man is trying to outwit you, and his logic in the trust area is severely flawed.

He is concerned that he won't walk with 1/2 that money in 10 years should you split.

YOU should be concerned that he WILL walk with half that money in ONE year should you split then.

See?

How about moving into his underwater mortgage house? Maybe it's not as good of an area, but that house is the one to move to.

Anyway, I don't see a solution here. I think this man has buried himself in false logic that is severely bent to his favor.

I think this is a HUGE RED FLAG.

DO NOT jeapordize your and your children's future by giving away 200k to a man that you are not married to, or might be a newlywed with soon.

DO NOT!

A mother's loyalty is always to supporting her children first before any man.

[Simon Attwood]

My lawyer said that if I did decide to do it 50/50 with him on my equity, he would insist I sign a disclaimer to protect him (my lawyer) from any claim for professional negligence.

 

Your lawyer sounds like a wise man. I'm not normally one to make knee jerk observations based upon the limited information available but this all doesn't sound right.

[minisha]

Everybody who has replied - thank you so much!

I'm sticking to my guns on this. I was always minded to anyway but I posted because I thought maybe there was something I was missing, a perspective that I wasn't getting that might change everything - clearly not and to have so many people have the same opinion on an issue in this sort of forum is rare indeed!

 

M