Second Marriage & Home Title

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s1223274
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Second Marriage & Home Title

Post by s1223274 »

Dear all,
Some context to help capture your experience/thoughts.

I am a divorced man (48 yr old/have 2 minor kids from my first marriage) and now in a relationship. It looks promising and a marriage (will be the second for both of us) is most likeli going to occur. She (current partner) has 2 kids (adults) from her first marriage.

I have the following assets v/s hers as I know ...and wanted to be fair down the line and yet ensure my 2 kids get a solid inheritance from me:
MINE vs HERS
- IRA ($500K) vs ($0K)
-employer 401K ($63K) vs ($50K)
-Brokerage ($212K) vs ($20K)
- House ($700K) of which i have paid $150K downpayment by myself vs Her own house worth ($450K)

How would you all propose to create a financial framework with the above assets as of now?

Of particular interest to me is the topic of House:
- Both of us would have our own homes before marriage and hence they are separate properties
- she expects me to add her to the title of my home because she will move in and start contributing to the household expenses
- She will rent her home and that rental expense will take care of the mortgage payment for her house. I am expected to contribute nothing to that house... so this house will go entirely to her children
- I do not want to be on her house title, in exchange i will carve out her house value from my house value for work out a math for Tenants in Common Title approach.. ($700k minus $450K = $250K as her share)
- why Tenants in Common Title >? Because this will provide her comfort that she is on the title and i can preserve $450K share to be passed straight down to my children upon my death.
- the question is how can i ensure that while on Tenants in Common Title , she gets right to survivorship.. that is no one including my own kids should kick her out of the house until her death. Can this be stated in a Will?

Folks, what are the holes you see in the above thoughts?
exodusNH
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Re: Second Marriage & Home Title

Post by exodusNH »

s1223274 wrote: Thu May 12, 2022 11:14 am Dear all,
Some context to help capture your experience/thoughts.

I am a divorced man (48 yr old/have 2 minor kids from my first marriage) and now in a relationship. It looks promising and a marriage (will be the second for both of us) is most likeli going to occur. She (current partner) has 2 kids (adults) from her first marriage.

I have the following assets v/s hers as I know ...and wanted to be fair down the line and yet ensure my 2 kids get a solid inheritance from me:
MINE vs HERS
- IRA ($500K) vs ($0K)
-employer 401K ($63K) vs ($50K)
-Brokerage ($212K) vs ($20K)
- House ($700K) of which i have paid $150K downpayment by myself vs Her own house worth ($450K)

How would you all propose to create a financial framework with the above assets as of now?

Of particular interest to me is the topic of House:
- Both of us would have our own homes before marriage and hence they are separate properties
- she expects me to add her to the title of my home because she will move in and start contributing to the household expenses
- She will rent her home and that rental expense will take care of the mortgage payment for her house. I am expected to contribute nothing to that house... so this house will go entirely to her children
- I do not want to be on her house title, in exchange i will carve out her house value from my house value for work out a math for Tenants in Common Title approach.. ($700k minus $450K = $250K as her share)
- why Tenants in Common Title >? Because this will provide her comfort that she is on the title and i can preserve $450K share to be passed straight down to my children upon my death.
- the question is how can i ensure that while on Tenants in Common Title , she gets right to survivorship.. that is no one including my own kids should kick her out of the house until her death. Can this be stated in a Will?

Folks, what are the holes you see in the above thoughts?
Unless you're benefiting directly from her house rental, it doesn't seem fair to give her a claim to your house. Do household expenses at your place include helping to pay for maintenance, e.g. a new roof? If she's talking about utilities and such, I don't see how that is fair to give her a claim, since those are expenses she'd incur anywhere.

But to accomplish what you want, maybe put your house in a trust with the stipulations? A neighbor of mine did that when he remarried to make sure his children couldn't force her out of the place.
student
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Re: Second Marriage & Home Title

Post by student »

I don't think it is fair to add her to title just because she contributes to household expense. If she wants her name on the title, she needs to pay you $350k if you own your house with no mortgage. Otherwise, pay you half of the equity.
Gnirk
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Re: Second Marriage & Home Title

Post by Gnirk »

If she wants her name on the house, then she should pay you for half of the equity, especially because you aren’t receiving any equity in her house. As for the IRA, I believe your spouse must be the beneficiary unless she signs a waiver, though I’m not 100% certain.

You could also leave her name off of the title, make your children the beneficiaries of the house, and grant your wife a lifetime estate which gives her the right to live there. She would be required to maintain the house, pay the taxes, etc as long as she lives there.

As for brokerage accounts, keep those separate, and don’t use co-mingled funds to invest more into those accounts.

Personal experience, similar to OP. My DH and I have been married 27 years…second marriage for both of us. I moved into his brand new paid-for house and didn’t expect to be added to the title, nor ask to be. However, I never felt that it was “my” home, even though I purchased all of the furnishings for it. After 15 years of marriage, he decided to add me to the title as Joint Owner with Right of Survivorship. We each pay for utilities and maintenance according to our percentage of income.
Our investment accounts, which have been kept separate, except for our IRA’s, will be inherited by our respective adult children.
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HMSVictory
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Re: Second Marriage & Home Title

Post by HMSVictory »

I am sorry if this seems harsh but this is asking for trouble down the line.

Can I make a suggestion? Create simplicity and make things easy. You have wills, title issues, beneficiary issues and a lot of other balls in the air at the same time. You are going to expend a lot of emotional energy trying to carve this all out. Why not do this:

1) Sell her house. She puts $150 into your house. Now you both have $300k into the property (with both names on the deed)
2) She can invest the other $300k into a brokerage account.
3) You need a prenup to dictate who gets what and where.
4) After the prenup is done you can make the children beneficiaries of the accounts you want them to inherit.
5) Don't forget to meet with everyone and explain your wishes (while alive) to avoid any drama after your or her passing.

My mother just went through all this when my step dad passed. They had a stipulation in the prenup that the house had to be sold within 90 days.

You have similar levels of wealth so this shouldn't be that hard. If one of you was worth 10M it would be a totally different ballgame.
Stay the course!
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HMSVictory
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Re: Second Marriage & Home Title

Post by HMSVictory »

Gnirk wrote: Thu May 12, 2022 12:19 pm If she wants her name on the house, then she should pay you for half of the equity, especially because you aren’t receiving any equity in her house. As for the IRA, I believe your spouse must be the beneficiary unless she signs a waiver, though I’m not 100% certain.
This is a 401k plan that requires the spouse to sign off (which can also be included in the prenup) an IRA can have anyone as a beneficiary.
Stay the course!
JHU ALmuni
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Re: Second Marriage & Home Title

Post by JHU ALmuni »

student wrote: Thu May 12, 2022 11:57 am I don't think it is fair to add her to title just because she contributes to household expense. If she wants her name on the title, she needs to pay you $350k if you own your house with no mortgage. Otherwise, pay you half of the equity.
This^.

Why give away half the equity you built?
exodusNH
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Re: Second Marriage & Home Title

Post by exodusNH »

HMSVictory wrote: Thu May 12, 2022 12:29 pm
Gnirk wrote: Thu May 12, 2022 12:19 pm If she wants her name on the house, then she should pay you for half of the equity, especially because you aren’t receiving any equity in her house. As for the IRA, I believe your spouse must be the beneficiary unless she signs a waiver, though I’m not 100% certain.
This is a 401k plan that requires the spouse to sign off (which can also be included in the prenup) an IRA can have anyone as a beneficiary.
Doesn't it also need to be agreed after marriage? I thought I saw on another post is that since the 401k assignment is automatic after marriage, the prenup doesn't apply because it was, by definition, in place before the marriage. (It doesn't mean that the prenup would be overridden when the estate is being settled, but it could save a headache.)
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HMSVictory
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Re: Second Marriage & Home Title

Post by HMSVictory »

exodusNH wrote: Thu May 12, 2022 12:42 pm
HMSVictory wrote: Thu May 12, 2022 12:29 pm
Gnirk wrote: Thu May 12, 2022 12:19 pm If she wants her name on the house, then she should pay you for half of the equity, especially because you aren’t receiving any equity in her house. As for the IRA, I believe your spouse must be the beneficiary unless she signs a waiver, though I’m not 100% certain.
This is a 401k plan that requires the spouse to sign off (which can also be included in the prenup) an IRA can have anyone as a beneficiary.
Doesn't it also need to be agreed after marriage? I thought I saw on another post is that since the 401k assignment is automatic after marriage, the prenup doesn't apply because it was, by definition, in place before the marriage. (It doesn't mean that the prenup would be overridden when the estate is being settled, but it could save a headache.)
Yes you are correct the prenup can specify it but the spouse must sign off after marriage.
Stay the course!
THY4373
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Re: Second Marriage & Home Title

Post by THY4373 »

Trying to leave the house to the kids but also allowing your spouse to live his/her life out in the house creates all kinds of long term issues. If the spouse cannot maintain the house or doesn't want to put the money into it then it puts the kids in a bad place. Also giving her a share of your equity in your house as outlined doesn't seem "fair" to me. I really think you need to speak to an estate lawyer before you get married or agree to anything. Understand the risks of what you are doing.
Ependytis
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Re: Second Marriage & Home Title

Post by Ependytis »

It looks like, if your the average retiree, you're a little more than a decade away from retiring. I commend you for thinking about these things now before you get married.

Based on the numbers you gave, you both don't seem evenly yoked. What I mean by evenly yoked is you have a net worth of $1.475 million, and she has a net worth of $0.52 million. It sounds like you're past having children so why get married? If she lives in your house, I think you're asking for trouble.

As others have said, I would not give anybody equity in my house just because we married. If she insists, go ahead and rent your house and move into her house and have her put you on her deed. Honestly, given her current net worth, I don't know that should be able to afford to pay for maintenance of your house and living expenses without you.

If you pre-decease her, no problem, with a prenup your assets would go to your children. If she pre-deceases you you can live in the house for a certain period of time before selling it and the proceeds going to her children. The reason I say this is her kids may never get their inheritance if you live long enough and or for some reason don't take care of the house including taxes, maintenance, repairs, homeowners insurance, and HMO.
Last edited by Ependytis on Fri May 13, 2022 9:50 am, edited 2 times in total.
er999
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Re: Second Marriage & Home Title

Post by er999 »

Not to be too mean, but since this is a financial forum remember the saying of second marriages as "the triumph of hope over experience" and search out the prenup threads. I would suggest that at 48 years old with 1.4 million net worth you should be cautious to avoid any future financial setbacks if things don't work out unless you have very low expenses or the willingness to work many more years.
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Lee_WSP
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Re: Second Marriage & Home Title

Post by Lee_WSP »

Commingling assets works fine for young couples with little to no assets when they enter marriage or couples who stay married until the end. It also works okay for older couples with no children. It does not work so well for blended families.

Each family is unique and each family dynamic is likewise unique. I suggest you think long and hard about what you want to commingle, what you want to stay separate, and what you want to go to your children. Then, speak with an estate planning attorney with experience planning for blended families. Even better, one who specializes in trusts.
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8foot7
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Re: Second Marriage & Home Title

Post by 8foot7 »

JHU ALmuni wrote: Thu May 12, 2022 12:37 pm
student wrote: Thu May 12, 2022 11:57 am I don't think it is fair to add her to title just because she contributes to household expense. If she wants her name on the title, she needs to pay you $350k if you own your house with no mortgage. Otherwise, pay you half of the equity.
This^.

Why give away half the equity you built?
Agree. A compromise would be you being added to her title in the rental, assuming the values are somewhat equal (I wouldn't sweat minor differences).
You could potentially agree, if she is going to start paying half the mortgage now, to credit her with half of the principal payments made during the period she was paying 50% of your mortgage payment and then settle up by adding her, as a partial percentage owner, after a few years.
But if it were me, either everyone goes on every title, or things get left alone.
Alternately, you sell your home and then together you both purchase another "marital" home 50/50.

She needs to rethink her expectations. Not to put too fine a point on it, but her sense of "what's mine is mine but what's yours ought to be (half) mine" is a huge red flag for a second marriage. Why does she need "comfort" at your expense? Please be very careful. There is a large gulf between your assets ($70k liquid for her, 700k liquid for you, not to mention you have twice as valuable a home) and hers at a time in your life--past midway through your career, presumably--where your human capital has a greater balance behind you than ahead. While I don't mean to comment on the emotional aspect of your relationship, you stand to lose significantly more than she does if things were to go sour.
sls239
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Re: Second Marriage & Home Title

Post by sls239 »

I think this is a situation that requires an estate attorney, in particular because your children are minors.

But in general I think planning for the spouse to get the house you two will live in while married in the event you pass is probably smoother.

The exception to that would be if you have primary custody and would want the children to stay in the house (because that is where they go to school).

As you can see, these considerations can get personal and can get tricky.
DoubleComma
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Re: Second Marriage & Home Title

Post by DoubleComma »

I think this is exactly the scenario for a prenup and estate plan to be created before you take that next step. The intent isn’t to pull one over on the other, but truly to protect the future of your respective children.
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LilyFleur
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Re: Second Marriage & Home Title

Post by LilyFleur »

8foot7 wrote: Thu May 12, 2022 2:35 pm
JHU ALmuni wrote: Thu May 12, 2022 12:37 pm
student wrote: Thu May 12, 2022 11:57 am I don't think it is fair to add her to title just because she contributes to household expense. If she wants her name on the title, she needs to pay you $350k if you own your house with no mortgage. Otherwise, pay you half of the equity.
This^.

Why give away half the equity you built?
Agree. A compromise would be you being added to her title in the rental, assuming the values are somewhat equal (I wouldn't sweat minor differences).
You could potentially agree, if she is going to start paying half the mortgage now, to credit her with half of the principal payments made during the period she was paying 50% of your mortgage payment and then settle up by adding her, as a partial percentage owner, after a few years.
But if it were me, either everyone goes on every title, or things get left alone.
Alternately, you sell your home and then together you both purchase another "marital" home 50/50.

She needs to rethink her expectations. Not to put too fine a point on it, but her sense of "what's mine is mine but what's yours ought to be (half) mine" is a huge red flag for a second marriage. Why does she need "comfort" at your expense? Please be very careful. There is a large gulf between your assets ($70k liquid for her, 700k liquid for you, not to mention you have twice as valuable a home) and hers at a time in your life--past midway through your career, presumably--where your human capital has a greater balance behind you than ahead. While I don't mean to comment on the emotional aspect of your relationship, you stand to lose significantly more than she does if things were to go sour.
Your children stand to lose a lot, and your children are younger and need more of your support. This is a big red flag.
Marseille07
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Re: Second Marriage & Home Title

Post by Marseille07 »

s1223274 wrote: Thu May 12, 2022 11:14 am - she expects me to add her to the title of my home because she will move in and start contributing to the household expenses
Pretty much everyone is saying this but this line item has to be carefully considered, as the deal doesn't seem very fair.

Moving in and paying utilities (both of which she has to do anyway no matter where) should not be worth 350K of home equity. This expectation is flat out wrong in my opinion.
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s1223274
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Re: Second Marriage & Home Title

Post by s1223274 »

Thanks everyone for making good observations and provide advise. I do like to provide some clarity:

- As one of reader commented (probably a woman)... that even though she purchased furniture etc she never felt it was "her" house.. and that her husband added her to the title after 15 years.... I heard the same "will not feel as my own home" from my partner too. What is this feeling? I am unable to understand. Is this a woman thing? I am thinking that a marriage is not a formula to enrich each parties financially..

- Regarding property with 25 years to go for loans to be paid off..
- My house: Current Prop value: $700K in which Downpayment ($135K) and Loan to be paid ($565K)
- her house: Current Prop value : $450K in which Downpayment ($15K) and Loan to be paid ($360K).... current prop value = purchase price + appreciation

- So, we both have loans..... hence the rental income on her house will be to pay off the mortgage..
- Yes, I expect her to contribute to my home loan payments based on our income % and in exchange i believed it is fair to give her a title in a Tenancy In Common format

So, here is how I am thinking of the formula:

My home:
First $450K (same value as her house/offset) goes 100% to my kids.... The balance and its appreciation will be split 40% to my kids and 60% to her kids (via her) + give her right to live in the house with funds in trust for maintenance.
Her home: 100% goes to her kids

my 401K: at the moment has to be assigned to spouse (100%)
Her 401K: since her kids are adults its 100% assigned to them

my IRA: Not sure if I should provide any share to her?
her IRA: need to find is she has one, probably none

my brokerage: existing funds value (base value $212K) 100% to my kids but future growth on this base $ will be divided equally between my kids and her kids (Ex: 212K grows to lets say $500K in the future, so 212K goes to my kids and 500k minus 212k = 282K will be divided equally between all kids)
Her brokerage: 100% to her kids

I am thinking this way to just to strike a balance and these are my own thoughts.. the only expectation from her has been regarding seeing her name on my home title (as she will move in and start contributing) and she wants that sense of security and feeling on ownership.
Katietsu
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Re: Second Marriage & Home Title

Post by Katietsu »

s1223274 wrote: Thu May 12, 2022 9:13 pm Thanks everyone for making good observations and provide advise. I do like to provide some clarity:

- As one of reader commented (probably a woman)... that even though she purchased furniture etc she never felt it was "her" house.. and that her husband added her to the title after 15 years.... I heard the same "will not feel as my own home" from my partner too. What is this feeling? I am unable to understand. Is this a woman thing? I am thinking that a marriage is not a formula to enrich each parties financially..
[\quote]

This has left me speechless. Maybe someone else can explain. Have you considered pre-marital counseling with a professional therapist as well as a pre-nuptial agreement?
exodusNH
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Re: Second Marriage & Home Title

Post by exodusNH »

s1223274 wrote: Thu May 12, 2022 9:13 pm Thanks everyone for making good observations and provide advise. I do like to provide some clarity:

- As one of reader commented (probably a woman)... that even though she purchased furniture etc she never felt it was "her" house.. and that her husband added her to the title after 15 years.... I heard the same "will not feel as my own home" from my partner too. What is this feeling? I am unable to understand. Is this a woman thing? I am thinking that a marriage is not a formula to enrich each parties financially..

- Regarding property with 25 years to go for loans to be paid off..
- My house: Current Prop value: $700K in which Downpayment ($135K) and Loan to be paid ($565K)
- her house: Current Prop value : $450K in which Downpayment ($15K) and Loan to be paid ($360K).... current prop value = purchase price + appreciation

- So, we both have loans..... hence the rental income on her house will be to pay off the mortgage..
- Yes, I expect her to contribute to my home loan payments based on our income % and in exchange i believed it is fair to give her a title in a Tenancy In Common format

So, here is how I am thinking of the formula:

My home:
First $450K (same value as her house/offset) goes 100% to my kids.... The balance and its appreciation will be split 40% to my kids and 60% to her kids (via her) + give her right to live in the house with funds in trust for maintenance.
Her home: 100% goes to her kids

my 401K: at the moment has to be assigned to spouse (100%)
Her 401K: since her kids are adults its 100% assigned to them

my IRA: Not sure if I should provide any share to her?
her IRA: need to find is she has one, probably none

my brokerage: existing funds value (base value $212K) 100% to my kids but future growth on this base $ will be divided equally between my kids and her kids (Ex: 212K grows to lets say $500K in the future, so 212K goes to my kids and 500k minus 212k = 282K will be divided equally between all kids)
Her brokerage: 100% to her kids

I am thinking this way to just to strike a balance and these are my own thoughts.. the only expectation from her has been regarding seeing her name on my home title (as she will move in and start contributing) and she wants that sense of security and feeling on ownership.
This all seems very unfair to you and your children.

First, your down payment should be subtracted from your house. That's money you already put in. Then, the equity you've already built up should also stay yours. If you then want to split the value of the house based on each of your future contributions, that would make sense.

Your current IRA should be for your children. If you decide to get married, you should stop contributing to that one so as not commingle marital assets.

Your existing 401k + growth of that balance should go to your children exclusively. The contributions after marriage plus that growth could go to the marriage. But, you'll have to get her to sign off on this in a prenup AND after your get married. As noted above, once married, the 401k will automatically go to your spouse unless she agrees otherwise.

I understand the "not my house" sentiment. My partner feels the same way. There's no way to resolve that except for her to buy half of your house at fair market value.

Some of her expectations seem unfair. I'd be very careful.
midoxidil
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Re: Second Marriage & Home Title

Post by midoxidil »

BE CAREFUL!! You lose asset protection titling your home in Tenants in Common. If either you or wife is sued individually, your property can be subject to judgement. The property is vulnerable to joint debts that result in judgments. Joint Tenancy provides protection from creditors.

You can use a will to direct the tranfer your property at death.
exodusNH
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Re: Second Marriage & Home Title

Post by exodusNH »

midoxidil wrote: Thu May 12, 2022 10:41 pm BE CAREFUL!! You lose asset protection titling your home in Tenants in Common. If either you or wife is sued individually, your property can be subject to judgement. The property is vulnerable to joint debts that result in judgments. Joint Tenancy provides protection from creditors.

You can use a will to direct the tranfer your property at death.
And make sure the spouse isn't the executor. Though one thing to be careful of is that state law may prevent disinheriting a spouse absent a pre/postnup.

As others have said, and estate lawyer is essential, especially with children, and minors at that, from another relationship.
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8foot7
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Re: Second Marriage & Home Title

Post by 8foot7 »

I'm the last to run for a lawyer, but y'all need a prenup and you need your own lawyer, stat.

Your response raised even more red flags. "Not sure how much of a share I should give her in my IRA." Absolutely none! First, you can't, because it's individual, but I assume you mean adding her as a beneficiary, in which case you are not taking care of your minor children. "Balance goes 60% to her kids, 40% to my kids" -- why?! Why are you putting her kids before your own? "My brokerage growth gets split between the kids, her brokerage growth goes 100% to her kids" -- again, why?

She has earned no share in anything you already have, just as you have earned no share in anything she already has. She would earn and be entitled to an equal share of everything you build together, as you'd be entitled to an equal share of what you build after marriage.

When I remarried, my lawyer described the plan as, "leave the past in the past, build new in the present." I can't think of a more logical way to approach this And your children must be taken care of, as she will have no actual obligation to them should you predecease her and them.

Please go see a lawyer. It could be the most important conversation you have this decade. From what you have presented there is a very good chance that, in the event of a divorce, you will lose more than half your assets and perhaps earning power as well. You need to protect yourself. And her adult children would be enriched at the expense of your own minor children should you pass on soon.

As far as the comfort thing with the house, well, there's a way to couch saying this with romantic partners, but ultimately, bluntly, she just needs to get over it.
59Gibson
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Re: Second Marriage & Home Title

Post by 59Gibson »

Yes get a lawyer. I'd be very careful.. everyone I know on their 3rd marriage had a 2nd, so I think 2nd's are dangerous
THY4373
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Re: Second Marriage & Home Title

Post by THY4373 »

59Gibson wrote: Fri May 13, 2022 7:07 am Yes get a lawyer. I'd be very careful.. everyone I know on their 3rd marriage had a 2nd, so I think 2nd's are dangerous
Everybody who had a 3rd marriage also had a first too just to state the obvious, I would say all marriages where one partner has substantially more assets than the other presents a risk 1st or 5th though yeah later marriages are more likely to end in divorce so all else being equal they are probably somewhat more risky. OP absolutely needs to speak with a lawyer and he also needs to decide whether he wants to prioritize the interests of his soon to be new spouse or his kids. It is his money so his choice but he needs to be clear to himself on this point, right now I think he is trying to please everyone.
sureshoe
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Re: Second Marriage & Home Title

Post by sureshoe »

s1223274 wrote: Thu May 12, 2022 11:14 am I have the following assets v/s hers as I know ...and wanted to be fair down the line and yet ensure my 2 kids get a solid inheritance from me:
I think your main thing is to really lay out what "fair down the line" means and what "solid inheritance" means.

I'd recommend you decide what you want your kids to actually inherit - whether that's a percentage of leftover assets, fixed amount, etc.

From there, you need to agree with your potential wife on what % of expenses you cover, what she covers. Or, does the money go into a pool. Lots of second marriages keep their money completely separate. That is the philosophical conversation that has to happen.

Beyond that, I can't imagine entering a second marriage without a pre-nup, but I'm lucky that I haven't had to. There is horror story after horror story of divorces, deaths, and money shennanigans.
bsteiner
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Re: Second Marriage & Home Title

Post by bsteiner »

In deciding how to proceed, keep in mind the modest size of both the original poster's estate and the equity in his house.
THY4373
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Re: Second Marriage & Home Title

Post by THY4373 »

bsteiner wrote: Fri May 13, 2022 10:21 am In deciding how to proceed, keep in mind the modest size of both the original poster's estate and the equity in his house.
OP seems to have around $900k net worth and maybe by the standards of this forum that is "modest" but compared to the average American it is far from it. OP is doing quite well for somebody who went through a divorce and he needs to tread carefully because financially he would appear to be far more exposed than his future spouse. A mistake now could really cost him and there are a number of red-ish flags here to me at least in OP's telling of events.
Gnirk
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Re: Second Marriage & Home Title

Post by Gnirk »

Katietsu wrote: Thu May 12, 2022 9:48 pm
s1223274 wrote: Thu May 12, 2022 9:13 pm Thanks everyone for making good observations and provide advise. I do like to provide some clarity:

- As one of reader commented (probably a woman)... that even though she purchased furniture etc she never felt it was "her" house.. and that her husband added her to the title after 15 years.... I heard the same "will not feel as my own home" from my partner too. What is this feeling? I am unable to understand. Is this a woman thing? I am thinking that a marriage is not a formula to enrich each parties financially..
[\quote]

This has left me speechless. Maybe someone else can explain. Have you considered pre-marital counseling with a professional therapist as well as a pre-nuptial agreement?
Yes, I am a woman :D, so maybe it is "a woman thing"! We had a prenuptial agreement, and I had no problem with that. I was surprised by my feelings that it wasn't "my" home, but that's the way it was, though I never told my DH that.

I do believe that in second marriages, where each has children from a previous marriage, that it is best to keep finances separate. I also believe that it's good to have each person's contributions to living expenses be based upon each person's income/assets. But that is just my own opinion; everyone is different.
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White Coat Investor
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Re: Second Marriage & Home Title

Post by White Coat Investor »

Wow. This is complex. Makes the divorces look simple by comparison.

Hopefully the difference between the level of assets you each have now is trivial compared to the level you accumulate together moving forward from here.

I think I'd lean toward a His, Hers, and Ours approach, and try to maximize the Ours going forward and leave the His and Hers in place as much as possible. Then there are essentially three estate plans: His, Hers, and Ours.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
er999
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Re: Second Marriage & Home Title

Post by er999 »

s1223274 wrote: Thu May 12, 2022 9:13 pm
- As one of reader commented (probably a woman)... that even though she purchased furniture etc she never felt it was "her" house.. and that her husband added her to the title after 15 years.... I heard the same "will not feel as my own home" from my partner too. What is this feeling? I am unable to understand. Is this a woman thing? I am thinking that a marriage is not a formula to enrich each parties financially..

- Regarding property with 25 years to go for loans to be paid off..
- My house: Current Prop value: $700K in which Downpayment ($135K) and Loan to be paid ($565K)
- her house: Current Prop value : $450K in which Downpayment ($15K) and Loan to be paid ($360K).... current prop value = purchase price + appreciation



Why don’t you sell both houses and then buy a new one together, putting down the minimal possible down payment? Then it is a house that you both picked together. Only reason not to is if your kids are still at home and have an emotional tie to your current house. Sure you lose some money with realtors fees but that would be less that what you would lose with your current plan if things don’t work out, particularly with no plans for a pre-nup.
Marseille07
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Re: Second Marriage & Home Title

Post by Marseille07 »

er999 wrote: Fri May 13, 2022 4:55 pm Why don’t you sell both houses and then buy a new one together, putting down the minimal possible down payment? Then it is a house that you both picked together. Only reason not to is if your kids are still at home and have an emotional tie to your current house. Sure you lose some money with realtors fees but that would be less that what you would lose with your current plan if things don’t work out, particularly with no plans for a pre-nup.
Because her gameplan is to keep her house & rental income while getting half of his house by being added to the title.

I don't want to sound like badmouthing her, but there's literally no one saying this deal is fair.
Last edited by Marseille07 on Fri May 13, 2022 5:17 pm, edited 1 time in total.
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student
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Re: Second Marriage & Home Title

Post by student »

s1223274 wrote: Thu May 12, 2022 9:13 pm Thanks everyone for making good observations and provide advise. I do like to provide some clarity:

- As one of reader commented (probably a woman)... that even though she purchased furniture etc she never felt it was "her" house.. and that her husband added her to the title after 15 years.... I heard the same "will not feel as my own home" from my partner too. What is this feeling? I am unable to understand. Is this a woman thing? I am thinking that a marriage is not a formula to enrich each parties financially..

- Regarding property with 25 years to go for loans to be paid off..
- My house: Current Prop value: $700K in which Downpayment ($135K) and Loan to be paid ($565K)
- her house: Current Prop value : $450K in which Downpayment ($15K) and Loan to be paid ($360K).... current prop value = purchase price + appreciation

- So, we both have loans..... hence the rental income on her house will be to pay off the mortgage..
- Yes, I expect her to contribute to my home loan payments based on our income % and in exchange i believed it is fair to give her a title in a Tenancy In Common format

So, here is how I am thinking of the formula:

My home:
First $450K (same value as her house/offset) goes 100% to my kids.... The balance and its appreciation will be split 40% to my kids and 60% to her kids (via her) + give her right to live in the house with funds in trust for maintenance.
Her home: 100% goes to her kids
I don't think it is fair. Why 60% to her kids (via her)? Since you only have $135k equity, she can pay you half of that. Then house goes 50% to your kids and 50% to her kids (via her).
s1223274 wrote: Thu May 12, 2022 9:13 pm my 401K: at the moment has to be assigned to spouse (100%)
Her 401K: since her kids are adults its 100% assigned to them
What? Your 401k go to her and hers 401k goes to her kids. One-sided again.
s1223274 wrote: Thu May 12, 2022 9:13 pm my IRA: Not sure if I should provide any share to her?
her IRA: need to find is she has one, probably none

my brokerage: existing funds value (base value $212K) 100% to my kids but future growth on this base $ will be divided equally between my kids and her kids (Ex: 212K grows to lets say $500K in the future, so 212K goes to my kids and 500k minus 212k = 282K will be divided equally between all kids)
Her brokerage: 100% to her kids
What? Again one-sided. Her kids are adults. How much of a relationship you expected to have with them? You did not raise them, I don't see why you should leave them money. If you guys grow close later, fine. Certainly not at this point. It seems what hers is hers, what yours have to be shared. From the purely financial standpoint, there is no even close to being fair.
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s1223274
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Re: Second Marriage & Home Title

Post by s1223274 »

Really, wonderful feedbacks and I appreciate it.
- While my current pot is modest, i am lucky to have it
- My minor kids are sitting on $1.5M (settled as part of divorce already) + their 4 yr college is fully funded via 529......and the investments will grow (ofcourse market exposure exists)
- My intent to pitch my thought process was based my own thinking (except the house thing where she wishes to be on the title)...
- This is where I was thinking offseting or carving out equal $ value (her house value = carve out same $ from mine and then only leave the rest as husband wife portion provided she contributes to the mortgage etc)
_ Yes, contribution by % of income is perfect and appropriate.
- I am looking for a meaningful relationship and less fixated to $ but it has to be fair. Based on your inputs, i need to bit more careful and mindful..
- looking for more feedbacks
Cruise
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Re: Second Marriage & Home Title

Post by Cruise »

s1223274 wrote: Fri May 13, 2022 11:59 pm Really, wonderful feedbacks and I appreciate it.
- While my current pot is modest, i am lucky to have it
- My minor kids are sitting on $1.5M (settled as part of divorce already) + their 4 yr college is fully funded via 529......and the investments will grow (ofcourse market exposure exists)
- My intent to pitch my thought process was based my own thinking (except the house thing where she wishes to be on the title)...
- This is where I was thinking offseting or carving out equal $ value (her house value = carve out same $ from mine and then only leave the rest as husband wife portion provided she contributes to the mortgage etc)
_ Yes, contribution by % of income is perfect and appropriate.will
- I am looking for a meaningful relationship and less fixated to $ but it has to be fair. Based on your inputs, i need to bit more careful and mindful..
- looking for more feedbacks

I’ll be blunt: You will be in a world of hurt unless you stop your Pollyannish approach to the financial aspects of your new relationship. Tell her to take a hike if she insists on a lopsided deal in which your children’s interests would be jeopardized.

It sounds like she has better negotiation skills than you, as she is prioritizing her finances and you are prioritizing her.

Best of luck.
Last edited by Cruise on Sat May 14, 2022 3:46 pm, edited 1 time in total.
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StevieG72
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Re: Second Marriage & Home Title

Post by StevieG72 »

59Gibson wrote: Fri May 13, 2022 7:07 am Yes get a lawyer. I'd be very careful.. everyone I know on their 3rd marriage had a 2nd, so I think 2nd's are dangerous
:D I agree!
Fools think their own way is right, but the wise listen to others.
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galawdawg
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Re: Second Marriage & Home Title

Post by galawdawg »

s1223274 wrote: Thu May 12, 2022 11:14 am I am a divorced man (48 yr old/have 2 minor kids from my first marriage) and now in a relationship. It looks promising and a marriage (will be the second for both of us) is most likeli going to occur. She (current partner) has 2 kids (adults) from her first marriage.

I have the following assets v/s hers as I know ...and wanted to be fair down the line and yet ensure my 2 kids get a solid inheritance from me...
When the time comes for marriage, I strongly recommend that you retain the services of a well-qualified estate planning attorney who can guide you through how to ensure that in your newly blended family your intentions for leaving an inheritance to your biological children are met. Please don't piecemeal this or attempt a DIY solution as you could frustrate your goals, the consequences of which may not come to light until after you are gone and your own children are left without a legacy.

Too often in second marriages the stepchildren of the surviving spouse can find themselves without the inheritance their parent intended them to receive. That can happen if the surviving spouse favors his/her own children in his/her own estate planning. I have seen it happen. Sometimes it is intentional, sometimes inadvertent, but the result is the same.

Good luck.
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s1223274
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Re: Second Marriage & Home Title

Post by s1223274 »

Based on strong feedback from you all I have decided the following framework is a must:

1) Each party keeps their separate property separate
2) my Existing IRA, Brokerage will remain separate and will receive no more contribution = (based + growth) straight to my kids
3) Any new IRA, Brokerage will be built on joint contribution and will be available for division across all kids
4) In My house, the down payment + any equity up until the point of marriage will be separate = straight to my kids
5) The balance of the unpaid loan when serviced by both (based on %) will create a path for her to have a share in the house...

One more question:
I am progressing forward on a job interview where in the company plans to offer me Non QUalified Stock options worth $1M which will be vested 1/3rd each year starting Dec 2022... She knows this because i am interviewing with her employer... so the question is as the vesting starts post marriage and this fund can become common pool (occurred post marriage) funds right?

Thanks
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