Joint Ownership of home with second wife

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
scotthew
Posts: 59
Joined: Mon Mar 09, 2015 7:34 am

Joint Ownership of home with second wife

Post by scotthew » Mon Jul 30, 2018 11:36 am

I have a very difficult home ownership problem that I'm looking for advice on. I am about to embark on a second marriage and hoping to buy a house in the not so distant future. I have children and my spouse does not, so clearly I am concerned about estates and divorce as well. To compound this we have an odd mixture of financial disparity - I have much higher wealth due to having a good income for a long time, but she potentially has much higher disposable income (since she has same gross income, but no children). As far as the new house:


* The wife feels uncomfortable paying for more than 1/3 of the house, because her needs aren't as high as mine (due to the kids requiring more space)
* Both agree that the house will be joint with rights of survivorship, despite unequal ownership (she gets the house if I die, regardless of how much she puts in). I'm fine with that.
* Husband has about $400k (pre-marital) available (from previous home) to put down on a larger more expensive $600k-800k house (roughly up to half of the value of the house)
* Both spouses have about $40k-60k each additional savings available to put down on house. Generally, this would not get us to 20% for a conventional mortgage without using proceeds of my current home.
* Having been divorced, I want to protect my premarital investment in the new home - I want to receive proportional share of premarital value plus proportional appreciation in the event of divorce
*Wife does not think it is fair for her to be responsible for 50% of maintenance costs, home improvements, and taxes since she would not recover her "fair" share in the event of divorce
* To add to this, I'm happy in my current house, so would admit if I didn't have the pressure from the wife (but I understand she wants to start a new life in a new house), would stay in place.

I'm looking for guidance on how to structure the ownership and financing of this house.


*** Background update**
Me mid-40's 2 kids. Partner late 30's no kids
Current house is about 20% of my wealth, so even if she inherits the house, along with a good insurance policy, there is plenty to leave the children (from my estate)
Last edited by scotthew on Mon Jul 30, 2018 5:51 pm, edited 1 time in total.

User avatar
cheese_breath
Posts: 7928
Joined: Wed Sep 14, 2011 7:08 pm

Re: Joint Ownership of home with second wife

Post by cheese_breath » Mon Jul 30, 2018 11:59 am

Looks like you have a few items of disagreement you need to resolve before your worry about financing.
The surest way to know the future is when it becomes the past.

User avatar
Pajamas
Posts: 6015
Joined: Sun Jun 03, 2012 6:32 pm

Re: Joint Ownership of home with second wife

Post by Pajamas » Mon Jul 30, 2018 12:03 pm

There seems to be a disconnect in your statements between ownership interest while everyone is living vs. after someone dies that doesn't make much sense to me and that seems to be affecting the issue of distribution of ongoing expenses. Agreeing on relationship and ownership issues should make distribution of the costs much more self-evident.

I agree with her that it doesn't make much sense for her to pay 50% of the costs but for a different reason than share of ownership, i.e., she would be paying part of your children's housing costs.

Perhaps separate ownership costs (mortgage payments) from ongoing costs (utilities and similar). Ongoing costs could be shared equitably between everyone who lives there (husband, wife, children) and ownership and costs directly related to ownership would be divided in proportion to ownership.

Of course if she considers your children to be her children and maybe even adopts them and they would live in the house with her if you died then 50-50 might make more sense.

Might be easier for her to simply pay an equitable share of housing costs similar to rent and let you alone own the house in trust for your children.

scotthew
Posts: 59
Joined: Mon Mar 09, 2015 7:34 am

Re: Joint Ownership of home with second wife

Post by scotthew » Mon Jul 30, 2018 12:17 pm

Some of the disconnects you mentioned are driven by her, but I have no ability to persuade her otherwise ( I think that part is our American culture with emphasis on home ownership, and I have no ability to 'persuade' her that renting is much more favorable in every way for her). We are currently living in that exact arrangement where she pays monthly 'living expenses' to me, and it works quite well. I'd be happy to carry that forward, but she feels strongly about home ownership. For whatever reason, she also feels strongly about directly inheriting the house (as opposed to trusts, etc), so I'm taking that into account as an estate planning compromise.

Scott

JoeRetire
Posts: 1593
Joined: Tue Jan 16, 2018 2:44 pm

Re: Joint Ownership of home with second wife

Post by JoeRetire » Mon Jul 30, 2018 12:25 pm

scotthew wrote:
Mon Jul 30, 2018 11:36 am
I am about to embark on a second marriage and hoping to buy a house in the not so distant future. I have children and my spouse does not, so clearly I am concerned about estates and divorce as well.

I'm looking for guidance on how to structure the ownership and financing of this house.
You need to talk to a lawyer well-versed in estate planning, divorce, and prenups. You need to do it now.

You are the classic case where a little money spent devising a prenup to protect you both will go a long way.

User avatar
Pajamas
Posts: 6015
Joined: Sun Jun 03, 2012 6:32 pm

Re: Joint Ownership of home with second wife

Post by Pajamas » Mon Jul 30, 2018 12:30 pm

scotthew wrote:
Mon Jul 30, 2018 12:17 pm
Some of the disconnects you mentioned are driven by her, but I have no ability to persuade her otherwise ( I think that part is our American culture with emphasis on home ownership, and I have no ability to 'persuade' her that renting is much more favorable in every way for her). We are currently living in that exact arrangement where she pays monthly 'living expenses' to me, and it works quite well. I'd be happy to carry that forward, but she feels strongly about home ownership. For whatever reason, she also feels strongly about directly inheriting the house (as opposed to trusts, etc), so I'm taking that into account as an estate planning compromise.

Scott
Then I agree with JoeRetire that you should get advice from a lawyer experienced with estates and division of assets. It's a complicated situation. You want everyone to be okay with it and you don't want any surprises later for anyone.

User avatar
HueyLD
Posts: 6060
Joined: Mon Jan 14, 2008 10:30 am

Re: Joint Ownership of home with second wife

Post by HueyLD » Mon Jul 30, 2018 12:33 pm

What state does the OP live in?

State laws differ, and there are major differences between community property and non community property states.

California?

User avatar
DanMahowny
Posts: 511
Joined: Sun Aug 06, 2017 8:25 pm

Re: Joint Ownership of home with second wife

Post by DanMahowny » Mon Jul 30, 2018 12:33 pm

Something I'm very good at is determining if a marriage is going to work out or not.

Don't get married. Sorry man.
Funding secured

keepingitsimple
Posts: 143
Joined: Sun Mar 18, 2018 8:20 pm

Re: Joint Ownership of home with second wife

Post by keepingitsimple » Mon Jul 30, 2018 12:34 pm

JoeRetire wrote:
Mon Jul 30, 2018 12:25 pm
scotthew wrote:
Mon Jul 30, 2018 11:36 am
I am about to embark on a second marriage and hoping to buy a house in the not so distant future. I have children and my spouse does not, so clearly I am concerned about estates and divorce as well.

I'm looking for guidance on how to structure the ownership and financing of this house.
You need to talk to a lawyer well-versed in estate planning, divorce, and prenups. You need to do it now.

You are the classic case where a little money spent devising a prenup to protect you both will go a long way.
I very much agree with this suggestion. In my opinion, there is too great a divide to proceed without an estate plan and pre-nup. I will withhold comment on your fiancées perspective of how things should be divided and paid for and simply reiterate that for the protection of your children's potential inheritance and your own financial well-being, please obtain counsel on the creation of a pre-nup. If you don't, you may be regretful.

scotthew
Posts: 59
Joined: Mon Mar 09, 2015 7:34 am

Re: Joint Ownership of home with second wife

Post by scotthew » Mon Jul 30, 2018 12:52 pm

I should have mentioned, we have both retained legal counsel, we are just trying to do some homework and get on the same page before getting highly wound up with the attorneys. I currently have an estate plan in effect (which will need to be changed), and my attorney drafted a prenup (which is more or less a generic pre-nup for our state) which was submitted to her.

User avatar
dm200
Posts: 18338
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: Joint Ownership of home with second wife

Post by dm200 » Mon Jul 30, 2018 12:57 pm

If you and your (second) wife obtain a mortgage for the maximum possible and then keep debt on the home as near as possible to the value of the home, then it seems to me that the issue of the net value of the home would not be an issue.

T4REngineer
Posts: 58
Joined: Thu May 31, 2018 9:50 am

Re: Joint Ownership of home with second wife

Post by T4REngineer » Mon Jul 30, 2018 1:08 pm

Yuck

No helpful advise to give other then to second( or third+) sitting down with a lawyer and your future spouse to come up with the most equitable arrangement. I have seen this in person where remarriage occurs (both had kids) both wanted a nice home, and if one spouse died they wanted the home to go to the surviving spouse BUT they wanted the value of their half (the now dead person) to be cashed out and passed to the decedents of the deceased - works fine assuming the surviving spouse can swing the home/mortgage on their single income + any life insurance.

I don't agree with not sharing the maintenance costs 50/50 - regardless of kids the roof and siding will wear at the same rate, the AC still runs if there are 2 or 4 people in the home (ok yes it runs more with 4 people due to the extra heat and more people opening and closing the door but if you are splitting those hairs ....). Maintenance items are just that - maintenance not capital improvements

If she is inheriting the house no matter how much you put down.......then why would you put anything but your "share" down what ever that works out to be (70/30?) No chance would I put down 400k that my estate would not get back for a home I did not want (see below)

"To add to this, I'm happy in my current house, so would admit if I didn't have the pressure from the wife (but I understand she wants to start a new life in a new house), would stay in place." - Red flag to me - she wants something you do not but is asking you to pay more for it then she is.

Sounds like you are both trying to work things out to be fair and still protect everyone - Best of luck.

Nate79
Posts: 3479
Joined: Thu Aug 11, 2016 6:24 pm
Location: Portland, OR

Re: Joint Ownership of home with second wife

Post by Nate79 » Mon Jul 30, 2018 1:20 pm

Money is the #1 cause of divorce. The original post is one big red flag as this isn't a legal issue but relationship issue.

User avatar
Tamarind
Posts: 1148
Joined: Mon Nov 02, 2015 2:38 pm

Re: Joint Ownership of home with second wife

Post by Tamarind » Mon Jul 30, 2018 1:35 pm

The good news is you both agree that fully joint ownership isn't right for you. You should go through the prenup process now, (not just a boilerplate text). Consider picking up the NOLO book to serve as a guide for your conversations. Start by spending time to agree on what is important to each of you, and coming to consensus where your wishes conflict. Once you have agreement, then bring the lawyers in to do the drafting. The money is well spent as what you want is complicated and includes provisions for dividing expenses during your marriage.

Make sure the house ownership is correct on the deed. If it just says "joint tenancy with rights of survivorship" with nothing else specified, it will be split 50/50 (or per your state laws) if you divorce and whoever lives longer will get 100%, regardless of what else you agreed.

mptfan
Posts: 4663
Joined: Mon Mar 05, 2007 9:58 am

Re: Joint Ownership of home with second wife

Post by mptfan » Mon Jul 30, 2018 1:43 pm

Nate79 wrote:
Mon Jul 30, 2018 1:20 pm
Money is the #1 cause of divorce. The original post is one big red flag as this isn't a legal issue but relationship issue.
I agree with this. Don't marry or buy a house with this woman, the two of you are on different pages and it will come back to bite you eventually. Some of the issues that jump out at me are...

1) She has an issue with paying for more than 1/3 of the house, but she wants to own 1/2 of the house? I am quite sure if you ever got divorced or wanted to otherwise sell the house, she would not agree that you should get 2/3 of the proceeds. Just sayin.

2) She does not think it is fair that she should be responsible for half of the maintenance, improvements or taxes? But again, she thinks it is fair that she should be entitled to half of the ownership?

3) She claims that your needs are greater than hers because you have kids and they need more space? Big red flag. She is calculating the difference in square footage required by your kids? I would not marry someone who is already telling me before we get married that my kids are not her kids under those circumstances.

Let me be clear, I see nothing wrong in general with being a provider and paying more than half of the cost of a house for you and your wife, or providing more than half of the income for you and your wife, that's all good. The issue I have is her attitude of entitlement. I think it's a mistake to agree to provide the majority of support or financial assets to support someone who has a sense of entitlement about what is owed to them over and above what they have contributed, especially when they start off by telling you how they don't think it's fair that they should contribute half even though they expect to own half, or how they should not be responsible for "your" kids. It's a red flag to me that she is already bean counting how much of a share she should get over and above what she contributes, and she feels entitled that you should contribute more than your share, but she objects to contributing an amount equal to her share. Don't feel pressured to move and buy a house with her under these circumstances, you will regret it later. And you will think back to that anonymous person on the Bogleheads and realize it.

Let's do a thought experiment for a moment...imagine you said to her "Honey, I'm willing to pay for 2/3 of the cost of the house and 2/3 of the maintenance, but I want to own 100% of the house in my name only, and I want you to sign a prenup giving up all rights to the house to me." What do you think she would say? Here's my prediction.... "That's not fair! Why are you being so selfish? You should not be entitled to own more than what you contributed!"
Last edited by mptfan on Mon Jul 30, 2018 2:46 pm, edited 15 times in total.

User avatar
vineviz
Posts: 1695
Joined: Tue May 15, 2018 1:55 pm

Re: Joint Ownership of home with second wife

Post by vineviz » Mon Jul 30, 2018 1:45 pm

scotthew wrote:
Mon Jul 30, 2018 11:36 am
I have a very difficult home ownership problem that I'm looking for advice on. I am about to embark on a second marriage and hoping to buy a house in the not so distant future. I have children and my spouse does not, so clearly I am concerned about estates and divorce as well. To compound this we have an odd mixture of financial disparity - I have much higher wealth due to having a good income for a long time, but she potentially has much higher disposable income (since she has same gross income, but no children). As far as the new house:


* The wife feels uncomfortable paying for more than 1/3 of the house, because her needs aren't as high as mine (due to the kids requiring more space)
* Both agree that the house will be joint with rights of survivorship, despite unequal ownership (she gets the house if I die, regardless of how much she puts in). I'm fine with that.
* Husband has about $400k (pre-marital) available (from previous home) to put down on a larger more expensive $600k-800k house (roughly up to half of the value of the house)
* Both spouses have about $40k-60k each additional savings available to put down on house. Generally, this would not get us to 20% for a conventional mortgage without using proceeds of my current home.
* Having been divorced, I want to protect my premarital investment in the new home - I want to receive proportional share of premarital value plus proportional appreciation in the event of divorce
*Wife does not think it is fair for her to be responsible for 50% of maintenance costs, home improvements, and taxes since she would not recover her "fair" share in the event of divorce
* To add to this, I'm happy in my current house, so would admit if I didn't have the pressure from the wife (but I understand she wants to start a new life in a new house), would stay in place.

I'm looking for guidance on how to structure the ownership and financing of this house.
You didn't ask for relationship advice, but I'm going to start with some anyway: you guys need a frank discussion about whether you are entering this marriage with similar expectations.

As for the finances, I think the only reasonable approach is to approach the home as a 50/50 joint venture. Each put in 50% of the down payment, 50% of the monthly payments, and 50% of the capital maintenance. Then, if there is a divorce, you have at least one capital asset that's easy to split.

You'll have lots of other expenses that you can split unequally (or, if you prefer, disproportionately). You can pay more for the food, the electricity, the clothing, etc to make up for bringing more people (aka your children) into the household. And the prenup can pretty easily spell out what happens on financial assets (IRAs, savings, etc). However, I think on capital assets (home, car, etc.) you are better off financially and relationally being equal partners. I'd be shocked if your lawyer didn't agree.

If she won't agree to a large enough house to accommodate your children, you have a much bigger issue than money. If she can't AFFORD to split the down payment on a large enough home right now, you live where you are until she does. Shouldn't take long for her to save up if her income/expense ratio is as high as you suggest.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

JoeRetire
Posts: 1593
Joined: Tue Jan 16, 2018 2:44 pm

Re: Joint Ownership of home with second wife

Post by JoeRetire » Mon Jul 30, 2018 1:46 pm

scotthew wrote:
Mon Jul 30, 2018 12:52 pm
my attorney drafted a prenup (which is more or less a generic pre-nup for our state) which was submitted to her.
If that's the best your lawyer can do, it's time to fire her and get a better lawyer.

delamer
Posts: 6121
Joined: Tue Feb 08, 2011 6:13 pm

Re: Joint Ownership of home with second wife

Post by delamer » Mon Jul 30, 2018 2:16 pm

How old are both of you and your children?

Is there any chance of children with you and your new wife?

Sagefemme
Posts: 63
Joined: Mon Mar 12, 2018 9:31 pm

Re: Joint Ownership of home with second wife

Post by Sagefemme » Mon Jul 30, 2018 2:26 pm

I'm with JoeRetire--you need an actual prenuptial agreement, reflecting your actual assets and concerns, not a generic one of no use to you for the house-buying issue and probably of no use for the other pieces of the financial arrangements that are guaranteed to come up. Get the attorney to do some real work.

Sagefemme
Posts: 63
Joined: Mon Mar 12, 2018 9:31 pm

Re: Joint Ownership of home with second wife

Post by Sagefemme » Mon Jul 30, 2018 2:28 pm

And please let us know what happens. This is an interesting situation reflecting modern-day marriage and could be of interest to many on this forum. BTW, what on-line forum is she seeking advice from, if you know?

cj2018
Posts: 121
Joined: Tue Jun 12, 2018 3:49 pm

Re: Joint Ownership of home with second wife

Post by cj2018 » Mon Jul 30, 2018 2:34 pm

DanMahowny wrote:
Mon Jul 30, 2018 12:33 pm
Something I'm very good at is determining if a marriage is going to work out or not.

Don't get married. Sorry man.
Unfortunately, I agree with DanMahowny on this one :(

I know this is not what you want to hear or looking for, but just by OP’s story and description so far, your future wife will be counting pennies and “equal share” of everything every step of the way down the line beyond just houses - education for your (not her) kids for instance.

Sorry mate, having the same value and outlook, especially financially, is what makes or breaks the marriage.

Sandi_k
Posts: 778
Joined: Sat May 16, 2015 11:55 am
Location: SF Bay Area

Re: Joint Ownership of home with second wife

Post by Sandi_k » Mon Jul 30, 2018 2:55 pm

OK, so if she's willing to put down 1/3 - how about this?

- You own the house entirely. You pay for the house entirely, based on your cash and equity from current home.

- You create a trust, in which the house is titled, giving her a life estate in the house, should you pre-decease her. If *she* predeceases you, the house goes to your kids, and your estate. Both of you are trustees, and both of your signatures are required for any change in the future.

- Her cash goes to pay for utilities, vacations, retirement funds for you both, etc., but not ownership in the house.

- All of your retirement assets have direct beneficiaries - your kids. So the wife gets the house, the kids get all cash. If she's worried about paying for it should you pre-decease her, she can use her pot o' money.

H-Town
Posts: 1255
Joined: Sun Feb 26, 2017 2:08 pm

Re: Joint Ownership of home with second wife

Post by H-Town » Mon Jul 30, 2018 3:00 pm

scotthew wrote:
Mon Jul 30, 2018 11:36 am
I have a very difficult home ownership problem that I'm looking for advice on. I am about to embark on a second marriage and hoping to buy a house in the not so distant future. I have children and my spouse does not, so clearly I am concerned about estates and divorce as well. To compound this we have an odd mixture of financial disparity - I have much higher wealth due to having a good income for a long time, but she potentially has much higher disposable income (since she has same gross income, but no children). As far as the new house:


* The wife feels uncomfortable paying for more than 1/3 of the house, because her needs aren't as high as mine (due to the kids requiring more space)
* Both agree that the house will be joint with rights of survivorship, despite unequal ownership (she gets the house if I die, regardless of how much she puts in). I'm fine with that.
* Husband has about $400k (pre-marital) available (from previous home) to put down on a larger more expensive $600k-800k house (roughly up to half of the value of the house)
* Both spouses have about $40k-60k each additional savings available to put down on house. Generally, this would not get us to 20% for a conventional mortgage without using proceeds of my current home.
* Having been divorced, I want to protect my premarital investment in the new home - I want to receive proportional share of premarital value plus proportional appreciation in the event of divorce
*Wife does not think it is fair for her to be responsible for 50% of maintenance costs, home improvements, and taxes since she would not recover her "fair" share in the event of divorce
* To add to this, I'm happy in my current house, so would admit if I didn't have the pressure from the wife (but I understand she wants to start a new life in a new house), would stay in place.

I'm looking for guidance on how to structure the ownership and financing of this house.
This is where a pre-nup come in. You both need a comprehensive review of pre-marital assets and liabilities. Although you might think you only structuring the mortgage and house joint ownership, this situation calls for a complete pre-nup agreement.

Start with telling us what state you're living in.

User avatar
Meg77
Posts: 2392
Joined: Fri May 22, 2009 1:09 pm
Location: Dallas, TX
Contact:

Re: Joint Ownership of home with second wife

Post by Meg77 » Mon Jul 30, 2018 3:13 pm

I propose this:
--Buy the $700K home that is larger/nicer that you both want. Use a 90% first mortgage instead of an 80% mortgage; you can view the PMI is the cost of protecting your kids' inheritance. Or you can get a 10% second mortgage and an 80% first mortgage if PMI really bugs you that much.
--She puts down 33% of the down payment and you put down 66%. She pays 33.3% of ongoing costs, and you pay 66.6%. In the event of a divorce, she gets a third and you get 2/3 of the value, which you would spell out in a prenup.
--Wife can still get 100% of the home if you die if you both agree to that. A better idea to me might be that she gets a life estate when you die, meaning she has the right to live there until she dies, but upon her death a third of the value goes to her estate and your kids get the other 2/3 of the value.
--Meanwhile, you can put the $400K from the sale of your current home into a trust for your kids, or into a separate property marital account at least - again, as outlined in the prenup.

We don't know anything about the rest of your estate of course. If you have other assets - retirement, etc. - then you can partition off some of those for your kids instead of the cash you have on hand now. So you may be able to both buy a bigger, nicer home and put down 20% or more and protect some inheritance for the kids. An attorney can help you spell it out once you both are OK with the big picture.
"An investment in knowledge pays the best interest." - Benjamin Franklin

User avatar
MnyGrl
Posts: 232
Joined: Tue Apr 11, 2017 3:44 pm
Location: DC

Re: Joint Ownership of home with second wife

Post by MnyGrl » Mon Jul 30, 2018 3:56 pm

Second marriages, and especially those that involve kids, have a high failure rate. Really recommend premarital counseling.

So many red flags here indicate that she is not terribly happy about the presence of your children in her life, and that will make both you and your children miserable. When you go to restaurants, will she pay just for her meal and you pay for the kids and yourself? It sounds like she is asking that you pay their "rent" since they take up more space. If she has a lot more disposable income and buys frivolous stuff while you are paying all the house expenses, won't that make you resentful?

Kids know when they are not wanted, and she does not sound like she wants your kids around at all. Are you willing to risk your kids for this marriage?

dekecarver
Posts: 292
Joined: Mon Feb 22, 2010 10:24 am

Re: Joint Ownership of home with second wife

Post by dekecarver » Mon Jul 30, 2018 4:36 pm

Whatever you do, do something to protect your kids financially. If something happens to you or to the marriage and you don't have things locked down, forget it. If she is not willing to work with you on this, forget it. Once you are commingled financially especially with a big purchase house, forget it. IMOP if you need premarriage counseling, that says a lot. If your relationship feels more like a business relationship, guess what?

denovo
Posts: 4351
Joined: Sun Oct 13, 2013 1:04 pm

Re: Joint Ownership of home with second wife

Post by denovo » Mon Jul 30, 2018 5:14 pm

* Both agree that the house will be joint with rights of survivorship, despite unequal ownership (she gets the house if I die, regardless of how much she puts in). I'm fine with that.
You should not agree with that. You are screwing over your kids.
"Don't trust everything you read on the Internet"- Abraham Lincoln

Broken Man 1999
Posts: 1439
Joined: Wed Apr 08, 2015 11:31 am

Re: Joint Ownership of home with second wife

Post by Broken Man 1999 » Mon Jul 30, 2018 5:16 pm

To me, the situation boils down to this: Each party is interested in ME, and not US. Not a pretty sight.

Best of luck to you BOTH.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

JGoneRiding
Posts: 1155
Joined: Tue Jul 15, 2014 3:26 pm

Re: Joint Ownership of home with second wife

Post by JGoneRiding » Mon Jul 30, 2018 5:23 pm

Wait she doesn't want to live in your perfectly fine house but she also doesn't want tobpaybfor your kids but she also wants it all if you die...

I think you need to take 2 steps back on marriage and figure out where your kids fall in all if this and then plan as if she would screw them out of every red cent they should get.

Frankly you both need a bunch of counselling for the sake of the children before proceeding. But if you are going to do it any way insist on the title being listed as 2/3 you, 1/3 her and that in the event of death she has to "buy" the children out of 1/3 or sell and give them 1/3

User avatar
Doom&Gloom
Posts: 2233
Joined: Thu May 08, 2014 3:36 pm

Re: Joint Ownership of home with second wife

Post by Doom&Gloom » Mon Jul 30, 2018 5:24 pm

DanMahowny wrote:
Mon Jul 30, 2018 12:33 pm
Something I'm very good at is determining if a marriage is going to work out or not.

Don't get married. Sorry man.
I might soften this a bit by adding "until you work this house deal out to the penny and can be certain everyone is happy about it."

But, then again, there is a lot to be said for simplicity--and brevity.

david99
Posts: 631
Joined: Sat Mar 03, 2007 11:56 am

Re: Joint Ownership of home with second wife

Post by david99 » Mon Jul 30, 2018 5:39 pm

I think that there is too much conflict and you should get some counseling or see a mediator. As others have said there are Too many red flags. If you are not planning on having a family with her, then why rush into this? Possibly you could get married at a later time when the kids are out of the house and you won't need such a large house.

scotthew
Posts: 59
Joined: Mon Mar 09, 2015 7:34 am

Re: Joint Ownership of home with second wife

Post by scotthew » Mon Jul 30, 2018 5:50 pm

scotthew wrote:
Mon Jul 30, 2018 11:36 am
I have a very difficult home ownership problem that I'm looking for advice on. I am about to embark on a second marriage and hoping to buy a house in the not so distant future. I have children and my spouse does not, so clearly I am concerned about estates and divorce as well. To compound this we have an odd mixture of financial disparity - I have much higher wealth due to having a good income for a long time, but she potentially has much higher disposable income (since she has same gross income, but no children). As far as the new house:


* The wife feels uncomfortable paying for more than 1/3 of the house, because her needs aren't as high as mine (due to the kids requiring more space)
* Both agree that the house will be joint with rights of survivorship, despite unequal ownership (she gets the house if I die, regardless of how much she puts in). I'm fine with that.
* Husband has about $400k (pre-marital) available (from previous home) to put down on a larger more expensive $600k-800k house (roughly up to half of the value of the house)
* Both spouses have about $40k-60k each additional savings available to put down on house. Generally, this would not get us to 20% for a conventional mortgage without using proceeds of my current home.
* Having been divorced, I want to protect my premarital investment in the new home - I want to receive proportional share of premarital value plus proportional appreciation in the event of divorce
*Wife does not think it is fair for her to be responsible for 50% of maintenance costs, home improvements, and taxes since she would not recover her "fair" share in the event of divorce
* To add to this, I'm happy in my current house, so would admit if I didn't have the pressure from the wife (but I understand she wants to start a new life in a new house), would stay in place.

I'm looking for guidance on how to structure the ownership and financing of this house.

*** Background update**
Me mid-40's 2 kids. Partner late 30's no kids
Current house is about 20% of my wealth, so even if she inherits the house, along with a good insurance policy, there is plenty to leave the children (from my estate)

WhiteMaxima
Posts: 1386
Joined: Thu May 19, 2016 5:04 pm

Re: Joint Ownership of home with second wife

Post by WhiteMaxima » Mon Jul 30, 2018 5:51 pm

Money vs wife. Which one you choose?

JHU ALmuni
Posts: 96
Joined: Tue Jan 20, 2015 12:40 pm

Re: Joint Ownership of home with second wife

Post by JHU ALmuni » Mon Jul 30, 2018 6:02 pm

OP,

From my personal experience, RUN as fast as you can and DON'T look back. Your kids might suffer from this marriage more than you can imagine.

User avatar
dm200
Posts: 18338
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: Joint Ownership of home with second wife

Post by dm200 » Mon Jul 30, 2018 6:05 pm

WhiteMaxima wrote:
Mon Jul 30, 2018 5:51 pm
Money vs wife. Which one you choose?
Maybe that should be a question the officiant of a wedding should ask? :mrgreen:

ACA
Posts: 50
Joined: Wed Nov 29, 2017 7:51 am

Re: Joint Ownership of home with second wife

Post by ACA » Mon Jul 30, 2018 6:05 pm

Nate79 wrote:
Mon Jul 30, 2018 1:20 pm
Money is the #1 cause of divorce. The original post is one big red flag as this isn't a legal issue but relationship issue.
JGoneRiding wrote:
Mon Jul 30, 2018 5:23 pm
Wait she doesn't want to live in your perfectly fine house but she also doesn't want tobpaybfor your kids but she also wants it all if you die...

I think you need to take 2 steps back on marriage

Frankly you both need a bunch of counselling for the sake of the children before proceeding.
Broken Man 1999 wrote:
Mon Jul 30, 2018 5:16 pm
To me, the situation boils down to this: Each party is interested in ME, and not US. Not a pretty sight.

Best of luck to you BOTH.

Broken Man 1999
MnyGrl wrote:
Mon Jul 30, 2018 3:56 pm
Second marriages, and especially those that involve kids, have a high failure rate. Really recommend premarital counseling.

So many red flags here indicate that she is not terribly happy about the presence of your children in her life, and that will make both you and your children miserable. When you go to restaurants, will she pay just for her meal and you pay for the kids and yourself? It sounds like she is asking that you pay their "rent" since they take up more space. If she has a lot more disposable income and buys frivolous stuff while you are paying all the house expenses, won't that make you resentful?

Kids know when they are not wanted, and she does not sound like she wants your kids around at all. Are you willing to risk your kids for this marriage?
mptfan wrote:
Mon Jul 30, 2018 1:43 pm
[quote=Nate79 post_id=4044035 time=<a href="tel:1532974803">1532974803</a> user_id=111874]
Money is the #1 cause of divorce. The original post is one big red flag as this isn't a legal issue but relationship issue.
I agree with this. Don't marry or buy a house with this woman, the two of you are on different pages and it will come back to bite you eventually. Some of the issues that jump out at me are...

1) She has an issue with paying for more than 1/3 of the house, but she wants to own 1/2 of the house? I am quite sure if you ever got divorced or wanted to otherwise sell the house, she would not agree that you should get 2/3 of the proceeds. Just sayin.

2) She does not think it is fair that she should be responsible for half of the maintenance, improvements or taxes? But again, she thinks it is fair that she should be entitled to half of the ownership?

3) She claims that your needs are greater than hers because you have kids and they need more space? Big red flag. She is calculating the difference in square footage required by your kids? I would not marry someone who is already telling me before we get married that my kids are not her kids under those circumstances.

Let me be clear, I see nothing wrong in general with being a provider and paying more than half of the cost of a house for you and your wife, or providing more than half of the income for you and your wife, that's all good. The issue I have is her attitude of entitlement. I think it's a mistake to agree to provide the majority of support or financial assets to support someone who has a sense of entitlement about what is owed to them over and above what they have contributed, especially when they start off by telling you how they don't think it's fair that they should contribute half even though they expect to own half, or how they should not be responsible for "your" kids. It's a red flag to me that she is already bean counting how much of a share she should get over and above what she contributes, and she feels entitled that you should contribute more than your share, but she objects to contributing an amount equal to her share. Don't feel pressured to move and buy a house with her under these circumstances, you will regret it later. And you will think back to that anonymous person on the Bogleheads and realize it.

Let's do a thought experiment for a moment...imagine you said to her "Honey, I'm willing to pay for 2/3 of the cost of the house and 2/3 of the maintenance, but I want to own 100% of the house in my name only, and I want you to sign a prenup giving up all rights to the house to me." What do you think she would say? Here's my prediction.... "That's not fair! Why are you being so selfish? You should not be entitled to own more than what you contributed!"
[/quote]
Nate79 wrote:
Mon Jul 30, 2018 1:20 pm
Money is the #1 cause of divorce. The original post is one big red flag as this isn't a legal issue but relationship issue.
DanMahowny wrote:
Mon Jul 30, 2018 12:33 pm

Something I'm very good at is determining if a marriage is going to work out or not.

Don't get married. Sorry man.
DanMahowny wrote:
Mon Jul 30, 2018 12:33 pm
Something I'm very good at is determining if a marriage is going to work out or not.

Don't get married. Sorry man.
cheese_breath wrote:
Mon Jul 30, 2018 11:59 am
Looks like you have a few items of disagreement you need to resolve before your worry about financing.
Quotes for truth! Including the internationally double quote. This woman must be stunning (I accept PM pictures) and fun (trying to keep it clean) for you to go against conventional wisdom and try appeasing her. Without some sort of counseling, agreement and understanding, you’re asking questions about your future ex wife.

HornedToad
Posts: 887
Joined: Wed May 21, 2008 12:36 am

Re: Joint Ownership of home with second wife

Post by HornedToad » Mon Jul 30, 2018 6:06 pm

mptfan wrote:
Mon Jul 30, 2018 1:43 pm
Nate79 wrote:
Mon Jul 30, 2018 1:20 pm
Money is the #1 cause of divorce. The original post is one big red flag as this isn't a legal issue but relationship issue.
I agree with this. Don't marry or buy a house with this woman, the two of you are on different pages and it will come back to bite you eventually. Some of the issues that jump out at me are...

1) She has an issue with paying for more than 1/3 of the house, but she wants to own 1/2 of the house? I am quite sure if you ever got divorced or wanted to otherwise sell the house, she would not agree that you should get 2/3 of the proceeds. Just sayin.

2) She does not think it is fair that she should be responsible for half of the maintenance, improvements or taxes? But again, she thinks it is fair that she should be entitled to half of the ownership?

3) She claims that your needs are greater than hers because you have kids and they need more space? Big red flag. She is calculating the difference in square footage required by your kids? I would not marry someone who is already telling me before we get married that my kids are not her kids under those circumstances.

Let me be clear, I see nothing wrong in general with being a provider and paying more than half of the cost of a house for you and your wife, or providing more than half of the income for you and your wife, that's all good. The issue I have is her attitude of entitlement. I think it's a mistake to agree to provide the majority of support or financial assets to support someone who has a sense of entitlement about what is owed to them over and above what they have contributed, especially when they start off by telling you how they don't think it's fair that they should contribute half even though they expect to own half, or how they should not be responsible for "your" kids. It's a red flag to me that she is already bean counting how much of a share she should get over and above what she contributes, and she feels entitled that you should contribute more than your share, but she objects to contributing an amount equal to her share. Don't feel pressured to move and buy a house with her under these circumstances, you will regret it later. And you will think back to that anonymous person on the Bogleheads and realize it.

Let's do a thought experiment for a moment...imagine you said to her "Honey, I'm willing to pay for 2/3 of the cost of the house and 2/3 of the maintenance, but I want to own 100% of the house in my name only, and I want you to sign a prenup giving up all rights to the house to me." What do you think she would say? Here's my prediction.... "That's not fair! Why are you being so selfish? You should not be entitled to own more than what you contributed!"
I didn't read this as her wanting equal ownership, but that in the event of death she would get the house. That seems reasonable as you don't want step kids to kick you out of a house in your old age because they own 2/3. So she would get the house and presumably the kids would get cash that would make up the difference.

But in the event of divorce, she owns 1/3, she pays 1/3 of the maintenance costs and would get 1/3 of any profit.

I think you just need to talk thru it and be explicit on it with the mutual agreement.

PJmillennial
Posts: 14
Joined: Tue Nov 07, 2017 9:45 am

Re: Joint Ownership of home with second wife

Post by PJmillennial » Mon Jul 30, 2018 6:18 pm

I don't mean to pile it on you but you have serious issues here that need to be addressed.

I can't understand what the purpose of you being married to this woman would be if you aren't 100% committed to the marriage being till death. There can be no plan B, no way out when it comes to a marriage. If you can't say with certainty that you and this woman will be in it together till the end with a plan for smoothing the disagreements as they arise then you are simply entering into a business transaction.

If you can't trust her to have joint accounts and she can't trust that you would put her needs above your own( I've extrapolated the issues you have with some liberty) you will find it impossible to have a fruitful marriage.

If you can't trust her with the above you shouldn't be willing to subject your children to this situation. You're responsible to them above everything else, whether you agree with that statement or not. There is reason to be concerned if you're spouse doesn't see your kids as important to herself as you are to her. I mean seriously, how is she going to accept you as her husband but not your children as her own? This isn't about your money and your future wife, its about your children and their future step mom.

I have seen first hand how toxic of a situation you are entering into and hope you can read what I've put here without seeing red.

User avatar
8foot7
Posts: 748
Joined: Mon Jan 05, 2015 7:29 pm

Re: Joint Ownership of home with second wife

Post by 8foot7 » Mon Jul 30, 2018 6:42 pm

There are lots of ways for couples to operate financially but personally I can’t imagine not being a 50/50 partner in buying a house, and that’s directed at your fiancé, not you sir.

Why can’t you own the house 50/50 and pay for it on an ongoing basis 50/50 with a carve out in your prenup that she pays you back for any premarital money you use for down payment that exceeds the amount she contributed ? Then if you get divorced you just halve the house and then she forks over whatever amount that was in excess of what was paid by her to get into the house. Problem solved.

It’s unreasonable in my opinion for two married people to not be equally invested, responsible for their owned place of residence. She’s only going to pay for a 1/3 of, say, the dishwasher replacement? Does she only get 1/3 of the space for each load?

Your second wife really ought to think of your kids as her own though

And do NOT marry without a prenup if you’re having this kind of discussion or you will get screwed

User avatar
cheese_breath
Posts: 7928
Joined: Wed Sep 14, 2011 7:08 pm

Re: Joint Ownership of home with second wife

Post by cheese_breath » Mon Jul 30, 2018 7:09 pm

8foot7 wrote:
Mon Jul 30, 2018 6:42 pm
... Your second wife really ought to think of your kids as her own though...
Thank goodness someone finally said it. As I was reading the posts and it occured to me there's a lot of mentions about the kids, but nobody's asked how she gets along with them. Do they like each other? Are they warm? Cordial? Formal? Standoffish?

Are you going to allow her to discipline them? What if you don't like the discipline she dishes out? What if she thinks you're not disciplining them enough? Have you talked about these things?

What if it comes down to a choice between your wife or your kids?
The surest way to know the future is when it becomes the past.

dekecarver
Posts: 292
Joined: Mon Feb 22, 2010 10:24 am

Re: Joint Ownership of home with second wife

Post by dekecarver » Mon Jul 30, 2018 7:11 pm

scotthew wrote:
Mon Jul 30, 2018 5:50 pm
scotthew wrote:
Mon Jul 30, 2018 11:36 am
I have a very difficult home ownership problem that I'm looking for advice on. I am about to embark on a second marriage and hoping to buy a house in the not so distant future. I have children and my spouse does not, so clearly I am concerned about estates and divorce as well. To compound this we have an odd mixture of financial disparity - I have much higher wealth due to having a good income for a long time, but she potentially has much higher disposable income (since she has same gross income, but no children). As far as the new house:


* The wife feels uncomfortable paying for more than 1/3 of the house, because her needs aren't as high as mine (due to the kids requiring more space)
* Both agree that the house will be joint with rights of survivorship, despite unequal ownership (she gets the house if I die, regardless of how much she puts in). I'm fine with that.
* Husband has about $400k (pre-marital) available (from previous home) to put down on a larger more expensive $600k-800k house (roughly up to half of the value of the house)
* Both spouses have about $40k-60k each additional savings available to put down on house. Generally, this would not get us to 20% for a conventional mortgage without using proceeds of my current home.
* Having been divorced, I want to protect my premarital investment in the new home - I want to receive proportional share of premarital value plus proportional appreciation in the event of divorce
*Wife does not think it is fair for her to be responsible for 50% of maintenance costs, home improvements, and taxes since she would not recover her "fair" share in the event of divorce
* To add to this, I'm happy in my current house, so would admit if I didn't have the pressure from the wife (but I understand she wants to start a new life in a new house), would stay in place.

I'm looking for guidance on how to structure the ownership and financing of this house.

*** Background update**
Me mid-40's 2 kids. Partner late 30's no kids
Current house is about 20% of my wealth, so even if she inherits the house, along with a good insurance policy, there is plenty to leave the children (from my estate)
Once you commingle your finances and don't make provisions for your kids, your kids are apt to get nothing, don't ask why I say this. Again, whatever you do, lock the kids financial plans up in writing, not by "she will do the right thing" or something else along those lines based on the rest of your story.

malabargold
Posts: 491
Joined: Fri Aug 08, 2014 8:16 am

Re: Joint Ownership of home with second wife

Post by malabargold » Mon Jul 30, 2018 7:29 pm

not going to end well

badProgrammer
Posts: 36
Joined: Wed Nov 30, 2016 7:14 am

Re: Joint Ownership of home with second wife

Post by badProgrammer » Mon Jul 30, 2018 8:07 pm

I've been engrossed in this one...love the wisdom from the BHs who have posted.

My own take on this is to ask the degree to which second-wife-to-be is accepting OP as a complete package including his children and is willing to be an equal partner in his life?

It almost sounds like extracting a financial penance should OP encumber the marriage with his children (which he obviously must) when she will not be bringing children, but that's simply circumstance and we assume it was her choice to knowingly be with a man who already has children from a prior marriage. OP is not in any way at fault for bringing children when she does not.

Hopefully, we marry the whole person, along with whatever he/she brings, whether it's children, crazy relatives, debt, eccentricities, etc.

It occurred to me...what if OP had some disability that required second-wife-to-be to do a disproportionate share of home care...should OP pay a greater financial share due to the additional hardship she'd incur as a result of bringing his disability to the marriage? (The kids are NOT a disability, but my point is to illustrate accepting/marrying the other person as they are...)

scotthew
Posts: 59
Joined: Mon Mar 09, 2015 7:34 am

Re: Joint Ownership of home with second wife

Post by scotthew » Mon Jul 30, 2018 8:19 pm

Originally had considered a marriage as equals, despite the disparities, but the sig other has made it clear that she has distaste for inheritances due to experience with and perception of siblings not making good use of inheritance (I don't agree with her 100%). I have an entirely different experience - my siblings and I were fortunate enough to have some inheritance, and believe we used it for good cause - getting college educations in professional programs and investing the rest for the long term (meaning even more potential inheritance for my kids)

I digress, but that difference in a opinion lead me to make sure to have a prenup that protected the children's inheritance, mainly by defaulting all property to nonmarital. Needless to say, she did not like that or really understand concept (she's never been married so cares very little for legal aspects of marriage). So this situation is pretty ugly of estate succession dilemma (to top it off I'm pretty young, and really want to defer these decisions for later in life). I do want to leave her secure in the event of my death, but don't want to assign a number right now .

User avatar
cheese_breath
Posts: 7928
Joined: Wed Sep 14, 2011 7:08 pm

Re: Joint Ownership of home with second wife

Post by cheese_breath » Mon Jul 30, 2018 8:57 pm

scotthew wrote:
Mon Jul 30, 2018 8:19 pm
Originally had considered a marriage as equals, despite the disparities, but the sig other has made it clear that she has distaste for inheritances due to experience with and perception of siblings not making good use of inheritance (I don't agree with her 100%). I have an entirely different experience - my siblings and I were fortunate enough to have some inheritance, and believe we used it for good cause - getting college educations in professional programs and investing the rest for the long term (meaning even more potential inheritance for my kids)

I digress, but that difference in a opinion lead me to make sure to have a prenup that protected the children's inheritance, mainly by defaulting all property to nonmarital. Needless to say, she did not like that or really understand concept (she's never been married so cares very little for legal aspects of marriage). So this situation is pretty ugly of estate succession dilemma (to top it off I'm pretty young, and really want to defer these decisions for later in life). I do want to leave her secure in the event of my death, but don't want to assign a number right now .
I don't understand.

It looks like you know this won't be a good marriage, but you're going to do it anyway and worry about the problems later.
The surest way to know the future is when it becomes the past.

User avatar
Doom&Gloom
Posts: 2233
Joined: Thu May 08, 2014 3:36 pm

Re: Joint Ownership of home with second wife

Post by Doom&Gloom » Mon Jul 30, 2018 9:02 pm

Seems more like a competition. Good luck, but I don't think you and your kids are the favorites.

User avatar
Tamarind
Posts: 1148
Joined: Mon Nov 02, 2015 2:38 pm

Re: Joint Ownership of home with second wife

Post by Tamarind » Mon Jul 30, 2018 9:10 pm

scotthew wrote:
Mon Jul 30, 2018 8:19 pm
Originally had considered a marriage as equals, despite the disparities, but the sig other has made it clear that she has distaste for inheritances due to experience with and perception of siblings not making good use of inheritance (I don't agree with her 100%). I have an entirely different experience - my siblings and I were fortunate enough to have some inheritance, and believe we used it for good cause - getting college educations in professional programs and investing the rest for the long term (meaning even more potential inheritance for my kids)

I digress, but that difference in a opinion lead me to make sure to have a prenup that protected the children's inheritance, mainly by defaulting all property to nonmarital. Needless to say, she did not like that or really understand concept (she's never been married so cares very little for legal aspects of marriage). So this situation is pretty ugly of estate succession dilemma (to top it off I'm pretty young, and really want to defer these decisions for later in life). I do want to leave her secure in the event of my death, but don't want to assign a number right now .
I was thinking most of the posters above were overreacting drastically.....until you posted this. This does indicate that you have more work to do before you two would be advised to marry. I find it worrying that she is dismissive of the legal side of marriage - spending a little time on that is table stakes for anyone marrying a person who is already a parent.

I know you may wish this could be sorted out cheaply and without conflict, but it probably can't. It's an unfortunate fact that if you want to do anything other than leave everything earned or bought during the marriage to her, you need a prenup and you'll have to make decisions about who gets what now. You cannot defer them and still expect to have them enforced. And that's before we even start talking about divorce.

Plus how you handle the guaranteed conflict of negotiating a prenup is a pretty good indicator for how you'll handle conflict during your married life.

User avatar
celia
Posts: 8347
Joined: Sun Mar 09, 2008 6:32 am
Location: SoCal

Re: Joint Ownership of home with second wife

Post by celia » Mon Jul 30, 2018 9:17 pm

I think you should each put your current assets in accounts in your names only with beneficiaries you each choose. On the day you marry, all income would then be community property and go into a new account. Then buy a new house with each of you contributing the same amount to the down payment and maintenance. (If you have to build the down payments from scratch, you can temporarily live in the old house with the sale proceeds going to you alone.) The survivor will get the new house and any assets you've built together from now on.

I consider this "fair" since your kids will only live there temporarily--18 years or less. If you have kids together, they will also live there temporarily. They don't figure into the cost of the house since you would be buying a new whole house together and someday will sell the whole house in one piece. (If you didn't have kids, you would have spare rooms all the time you own it together.)

However, I think the bigger problem is that you appear to not be on the same page financially. Have you discussed retirement accounts, a future new car, vacations, and how they should be funded? What about college for 2 or more kids? Being accepting of your kids as they are is also necessary as is possibly being a mother figure for them.

I also find it interesting that you both appear to be speaking comfortably about what should happen in a divorce!

User avatar
cheese_breath
Posts: 7928
Joined: Wed Sep 14, 2011 7:08 pm

Re: Joint Ownership of home with second wife

Post by cheese_breath » Mon Jul 30, 2018 9:26 pm

I'm just wondering, what are some of the good things about this woman that make you so compelled to want to marry her in spite of all the conflicting values you've already described, because I would wager there are others you haven't told us about.
The surest way to know the future is when it becomes the past.

stimulacra
Posts: 311
Joined: Wed Dec 21, 2016 3:50 pm
Location: Houston

Re: Joint Ownership of home with second wife

Post by stimulacra » Mon Jul 30, 2018 9:27 pm

Seems like it would be in your future wife's best interest to have you sell your current (separate property) and roll or commingle that equity into a new home (communal property). I wouldn't do it. I would be more inclined to turn your old home into a rental.

That and some other things you mentioned have red flag all over it. Consult a lawyer, be an advocate for your children's interest and put your wishes down in writing. Verbal wishes and agreements have a way of changing as circumstances evolve.

Post Reply