Assets tangled with in laws, how to minimize future liabilities

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Betterself
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Assets tangled with in laws, how to minimize future liabilities

Post by Betterself » Tue Sep 12, 2017 11:13 am

Husband and I got married six years ago. Prior to that, he and in laws had the following arrangements:

Property A: in laws put 20% downpayment and my husband paid off the mortgage and the property is under my husband's name. The asset appreciated 30x and is now worth over $300k.

Property B: in laws put 20% down and my husband paid off the mortgage. Property, under my in laws name, was supposed to be a family gift to our marriage. B doubled in value and sold without consulting us for 150k. In laws gave us 50k back but "invest the rest under their name".

Recently my mother in law asked my husband to transfer property A to them and claimed the gave us 100k instead of 50 k for us for property B.

I let my husband to deal with his family and originally planned to use property A or /and B for my in laws when they need assisting cares or major illnesses. However, if they want property A back now, that may cost my family future expenses. After the financial encounters, I am really not willing to support them any more.

How can I protect my small family without totally cutting the in laws of our life? Although my husband rejects to transfer the property immediately, he may still grant to them their wishes. If so, we may lose our last lever and open our book for future liabilities.

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celia
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Re: Assets tangled with in laws, how to minimize future liabilities

Post by celia » Tue Sep 12, 2017 11:37 am

I don't understand the problem. Property A was paid for with a $2,000 down payment by the in-laws and $8,000 by your husband (assuming the $10K property grew 30-fold to today's $300K). Your husband owns that. It appears your husband was never an owner (on the title) for property B. If these properties were purchased and paid off before you married, you are not a part of it. If your husband agrees that the relatives can live in or own property A in their old age, that is your husband's choice.

What state do you live in? If you live in one of the 9 community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin), you and your husband need to recognize that anything either of you earn while married belongs to both of you jointly. Even if you don't live in a community property state, I think you two need to be on the same page financially and use your money to take care of yourselves first.

Betterself
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Re: Assets tangled with in laws, how to minimize future liabilities

Post by Betterself » Tue Sep 12, 2017 11:48 am

We live in Georgia with no prenup so property A theoretical is ours and I bring sizable assets to marriage as well. Parents live in property A now but they want the ownership right away. My husband is upset too.

I am ok to let property A and B go but where is the line? What is they used up all their money and come back for more? A is a pretection for me between his family and our small family.

Jack FFR1846
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Re: Assets tangled with in laws, how to minimize future liabilities

Post by Jack FFR1846 » Tue Sep 12, 2017 11:53 am

You won't like my solution: Sell property A. Tell in laws to get out. Keep all the profits. Never do business with family ever again.
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ResearchMed
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Re: Assets tangled with in laws, how to minimize future liabilities

Post by ResearchMed » Tue Sep 12, 2017 11:57 am

Betterself wrote:
Tue Sep 12, 2017 11:48 am
We live in Georgia with no prenup so property A theoretical is ours and I bring sizable assets to marriage as well. Parents live in property A now but they want the ownership right away. My husband is upset too.

I am ok to let property A and B go but where is the line? What is they used up all their money and come back for more? A is a pretection for me between his family and our small family.
What "happened" isn't good, in terms of "financial entanglements with family".

However, the first thing is to talk together about "no more joint ventures", etc.
This should probably include not purchasing property in the future and renting to in-laws, either, as that could snowball to lower or no rent, etc.

But you also both need to discuss in advance what your additional concerns are, about whether this suggests that if in-laws come hat in hand in the future, "what will the two of you do?".
Better to be prepared and in agreement before something "wrong" gets done "with them" again (meaning not something you both agree to).

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CAsage
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Re: Assets tangled with in laws, how to minimize future liabilities

Post by CAsage » Tue Sep 12, 2017 11:57 am

If your husband's name is on the title. Property A isn't just theoretically his, it's legally his. Was any of this documented? Does your husband feel that having paid 80% off on Property B and getting $50k back was a fair deal? He needs to sit down with his parents and sort it out. You need to understand the property rights for your own assets, which may or may not now be community depending on the ownership, and your rights to your husband's property. I have no clue what those would be! Some polite discussion is needed.... and note that they cannot extort money from you in the future without your giving it up.

delamer
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Re: Assets tangled with in laws, how to minimize future liabilities

Post by delamer » Tue Sep 12, 2017 12:15 pm

It isn't clear what "future liabilities" you are concerned about. Do you mean that you might have to support your in-laws later even if you transfer the property to them? But that could happen regardless of what you do with the property.

I don't see any legal liability if you transfer the property, but I am not an attorney.

dbr
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Re: Assets tangled with in laws, how to minimize future liabilities

Post by dbr » Tue Sep 12, 2017 12:32 pm

It's simple. Your in-laws want the two of you to support them on demand. You and your husband will need to decide how far you want to go with this, the consequences be what they may.

There is no entanglement of assets as the ownership of each property is legally clear and there are no loans or obligations in legal existence. Reneging on supposed promises that are not legally documented as contracts and making statements contrary to fact is not an entanglement of assets.

Betterself
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Re: Assets tangled with in laws, how to minimize future liabilities

Post by Betterself » Tue Sep 12, 2017 12:57 pm

delamer wrote:
Tue Sep 12, 2017 12:15 pm
It isn't clear what "future liabilities" you are concerned about. Do you mean that you might have to support your in-laws later even if you transfer the property to them? But that could happen regardless of what you do with the property.

I don't see any legal liability if you transfer the property, but I am not an attorney.
Future liabilities:

My father inlaw's pension covers their daily expenses. However, if my mother in law lives longer, we may have to chip in additional 3000 on top of 3000 we give them annually. If they need 24/7 assistance, that will be 15-20k annually. If there is a major illness, I can see more payments. My in laws live overseas.

magicrat
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Re: Assets tangled with in laws, how to minimize future liabilities

Post by magicrat » Tue Sep 12, 2017 1:10 pm

Betterself wrote:
Tue Sep 12, 2017 12:57 pm
delamer wrote:
Tue Sep 12, 2017 12:15 pm
It isn't clear what "future liabilities" you are concerned about. Do you mean that you might have to support your in-laws later even if you transfer the property to them? But that could happen regardless of what you do with the property.

I don't see any legal liability if you transfer the property, but I am not an attorney.
Future liabilities:

My father inlaw's pension covers their daily expenses. However, if my mother in law lives longer, we may have to chip in additional 3000 on top of 3000 we give them annually. If they need 24/7 assistance, that will be 15-20k annually. If there is a major illness, I can see more payments. My in laws live overseas.
Those are only future liabilities if you choose to make them such.

delamer
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Re: Assets tangled with in laws, how to minimize future liabilities

Post by delamer » Tue Sep 12, 2017 1:23 pm

Betterself wrote:
Tue Sep 12, 2017 12:57 pm
delamer wrote:
Tue Sep 12, 2017 12:15 pm
It isn't clear what "future liabilities" you are concerned about. Do you mean that you might have to support your in-laws later even if you transfer the property to them? But that could happen regardless of what you do with the property.

I don't see any legal liability if you transfer the property, but I am not an attorney.
Future liabilities:

My father inlaw's pension covers their daily expenses. However, if my mother in law lives longer, we may have to chip in additional 3000 on top of 3000 we give them annually. If they need 24/7 assistance, that will be 15-20k annually. If there is a major illness, I can see more payments. My in laws live overseas.
So the plan was that the equity in the house would cover any future expenses of your in-laws, if needed? If that is the case, then this is an issue that you have to come to an agreement with your spouse about. This is really a relationship issue even though it affects your finances.

junior
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Re: Assets tangled with in laws, how to minimize future liabilities

Post by junior » Tue Sep 12, 2017 1:24 pm

The problem, in a nutshell appears to be you are concerned that your husband is going to give more money to in laws that you would prefer. The problem, is therefore, a relationship one between you and your husband. The ideal solution would be you and your husband coming to some sort of agreement and handle it together as a couple. You and your husband have no control over whether the in laws ask for money, the only control you have is whether you give the money that is requested.

Betterself
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Re: Assets tangled with in laws, how to minimize future liabilities

Post by Betterself » Tue Sep 12, 2017 1:33 pm

We planned to use the equity for our in laws as the worst case scenario but the timing of request really concerns me about my inlaws' characters. They live rent free anyway and cannot monetize the property even if they own it.

I am pretty hands off to let my husband to deal with his family but concerned about the relationship with my in laws and financial responsibility going forward. I do not know how to start the talk.

delamer
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Re: Assets tangled with in laws, how to minimize future liabilities

Post by delamer » Tue Sep 12, 2017 1:38 pm

Betterself wrote:
Tue Sep 12, 2017 1:33 pm
We planned to use the equity for our in laws as the worst case scenario but the timing of request really concerns me about my inlaws' characters. They live rent free anyway and cannot monetize the property even if they own it.

I am pretty hands off to let my husband to deal with his family but concerned about the relationship with my in laws and financial responsibility going forward. I do not know how to start the talk.
I don't have any good suggestions for you on starting the conversation.

denovo
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Re: Assets tangled with in laws, how to minimize future liabilities

Post by denovo » Tue Sep 12, 2017 1:43 pm

Is your father an only child? If not, where are the other kids in this picture?

staythecourse
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Re: Assets tangled with in laws, how to minimize future liabilities

Post by staythecourse » Tue Sep 12, 2017 1:45 pm

I am one of the harsher posters on this site when it comes to issues like this. My opinion, give them the property, give them back the 50k they gave you, and tell them they did not contribute to your relationship financially so don't expect anything in return. It may seem callous, but you are adults and if you can't afford the down payment then just save more and wait. If they are old and waste all their money that is on them and shouldn't interfere with you two relationship. The knife cuts both ways. If they don't want to give money to you without strings later on that is their decision, but then they should not expect help back in the future.

Mixing money and family is always a potential disaster. Why take the chance.

Good luck.
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Betterself
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Re: Assets tangled with in laws, how to minimize future liabilities

Post by Betterself » Tue Sep 12, 2017 1:51 pm

denovo wrote:
Tue Sep 12, 2017 1:43 pm
Is your father an only child? If not, where are the other kids in this picture?
My father is the only living male in my family. My husband has an older brother who is asset rich but has unstable and limited income.

denovo
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Re: Assets tangled with in laws, how to minimize future liabilities

Post by denovo » Tue Sep 12, 2017 2:29 pm

Betterself wrote:
Tue Sep 12, 2017 1:51 pm
denovo wrote:
Tue Sep 12, 2017 1:43 pm
Is your father an only child? If not, where are the other kids in this picture?
My father is the only living male in my family. My husband has an older brother who is asset rich but has unstable and limited income.

Sorry typed too fast, was asking your husband is an only child. Does your husband have other siblings besides the older one?
Last edited by denovo on Tue Sep 12, 2017 2:54 pm, edited 2 times in total.

denovo
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Re: Assets tangled with in laws, how to minimize future liabilities

Post by denovo » Tue Sep 12, 2017 2:35 pm

staythecourse wrote:
Tue Sep 12, 2017 1:45 pm
I am one of the harsher posters on this site when it comes to issues like this. My opinion, give them the property, give them back the 50k they gave you, and tell them they did not contribute to your relationship financially so don't expect anything in return. It may seem callous, but you are adults and if you can't afford the down payment then just save more and wait. If they are old and waste all their money that is on them and shouldn't interfere with you two relationship. The knife cuts both ways. If they don't want to give money to you without strings later on that is their decision, but then they should not expect help back in the future.

Mixing money and family is always a potential disaster. Why take the chance.

Good luck.
I agree with you, but honestly it's only a little bit difficult because we are talking about family living overseas and likely different culture/government. I am making a confident guess, based on buying a home for only 10k, and that appreciation, that we are talking about a low-income, underdeveloped country with possibly minimal services. Here, if you cut off your parents, they can suffice on Medicaid/SSI etc, in another country it could mean being a beggar.

Betterself
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Re: Assets tangled with in laws, how to minimize future liabilities

Post by Betterself » Tue Sep 12, 2017 2:46 pm

denovo wrote:
Tue Sep 12, 2017 2:29 pm
Betterself wrote:
Tue Sep 12, 2017 1:51 pm
denovo wrote:
Tue Sep 12, 2017 1:43 pm
Is your father an only child? If not, where are the other kids in this picture?
My father is the only living male in my family. My husband has an older brother who is asset rich but has unstable and limited income.

Sorry typed too fast, was asking your brother is an only child. Does your brother have other siblings besides the older one?
I am the only child and should have limited liability from my parents' side. My husband only has an older brother who lives in the same city with my in laws.

I could understand the motive for parents to transfer their asses in exchange for support later from my brother in law, but I trust myself better than my in laws and would give the property directly after my brother in law provides physical support.

denovo
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Re: Assets tangled with in laws, how to minimize future liabilities

Post by denovo » Tue Sep 12, 2017 3:10 pm

junior wrote:
Tue Sep 12, 2017 1:24 pm
The problem, in a nutshell appears to be you are concerned that your husband is going to give more money to in laws that you would prefer. The problem, is therefore, a relationship one between you and your husband. The ideal solution would be you and your husband coming to some sort of agreement and handle it together as a couple. .
Betterself wrote:
Tue Sep 12, 2017 1:33 pm


I am pretty hands off to let my husband to deal with his family but concerned about the relationship with my in laws and financial responsibility going forward. I do not know how to start the talk.
I agree with Junior, this is a relationship matter , which no one here can answer. We have no clue how you should start the talk, if he's looking at this emotionally or rationally, or if he would be preferred to be eased into the topic or it needs to be blunt. We don't know him.

Best I can do though is try to give you other people's perspectives.

1. Presuming he paid into these assets before you got married, he may consider this his own separate money (which should also apply to what you had before the marriage) and doesn't think it should be your business.

2. He may feel personally obligated to help his parents, and maybe they funded his education and assisted him in immigrating to the U.S., so it may not be a unfair expectation, and one that would apply based on cultural obligations.

Objectively I agree based on how you described what your husband put into Properties A and B, he's getting shortchanged based on a purely numbers basis, but family relationships aren't based purely on numbers.

N1CKV
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Re: Assets tangled with in laws, how to minimize future liabilities

Post by N1CKV » Tue Sep 12, 2017 3:17 pm

Start the conversation with your husband.
It goes something like this:
I am concerned about.....
Here is the potential impact I perceive......
Here is what I think we should do about it.....
I have met a lot of people that claim to love money, but they also seem to be the same people that are in the biggest hurry to get rid of it.

msk
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Re: Assets tangled with in laws, how to minimize future liabilities

Post by msk » Tue Sep 12, 2017 3:25 pm

This is where cultures clash. IMHO expect that your husband is going to support his parents financially down to his last penny, even if you and your children end up at pauper level. Sounds as if his parents are not able to cope currently at the support level they are receiving, and maybe they are just irresponsible financially. Hence the sale of property B and possibly the coming sale of A once the title is transferred. Least harmful tact to use is for your husband just to keep on procrastinating in transferring the title indefinitely. I suspect that he is, culturally, unable to refuse outright. He ought to increase his financial support to his parents as time goes on and hope that somehow you all bumble through to a resolution that is not too painful. Not worth too much worry as to what if IMHO. If roles were reversed and it were your husband who is desperate for financial aid that his parents were in a position to provide, they would, down to their last penny. There may be no such thing as, you are now an adult, take care of yourself. Just absent-minded procrastination ought to do the trick.

PVW
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Re: Assets tangled with in laws, how to minimize future liabilities

Post by PVW » Tue Sep 12, 2017 3:27 pm

Are your inlaws concerned that you are interfering with your husband's obligation to provide for them?

Given your concerns about limiting future support to only include some appreciated investments, I can see that your inlaws might be concerned about future support they were expecting from their son. They might be trying to do what they can while they can.

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celia
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Re: Assets tangled with in laws, how to minimize future liabilities

Post by celia » Tue Sep 12, 2017 3:37 pm

Betterself wrote:
Tue Sep 12, 2017 11:48 am
We live in Georgia with no prenup so property A theoretical is ours and I bring sizable assets to marriage as well. Parents live in property A now but they want the ownership right away. My husband is upset too.

It appears your in-laws, your brother-in-law, and property A are in another country while you and your husband live in Georgia, USA. You send them $3,000 a year. Your parents are in another country too, but do not need assistance at this time.

We likely won't know or understand the property laws in another country or what the custom is for supporting elderly parents. If your brother-in-law is providing some kind of support in the form of time and energy to look after them, that might be considered equitable to the money your husband is providing.

The good thing, in one way, is that your husband is also upset with his parents. This is, therefore, a good time to be sure you are on the same page. Here are some ways to start a conversation with him:

"Do you remember when you spoke to your parents recently? Could you relay that conversation again, if you don't mind. How do you feel about it?"
or
"Were you planning on keeping property A? What do you think all your options are and how would they affect us?"
or
"I was just paying some bills today. Could we talk about OUR finances?"

Listen to what he is saying. See if he sounds overly concerned with this parents. What can the two of you do to relieve the stress? Do you agree? Does something have to change? (These are things to think about, not to answer here.)
I am ok to let property A and B go but where is the line? What is they used up all their money and come back for more? A is a pretection for me between his family and our small family.
The line is that you keep your family assets separate from his parents' assets. Your husband should also know that, but it is likely he will continue to send them $3,000 a year. That is fine as long as you are aware of it and agree.

But your parents could have a misfortune and need money too. And the two or you likely have some goals that will need money to pay for them. So you probably want to talk about "the big picture" about where your money might be used in the future and the max that you could afford to share with others. By all means, let your husband know that this worries you too.

aristotelian
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Re: Assets tangled with in laws, how to minimize future liabilities

Post by aristotelian » Tue Sep 12, 2017 4:27 pm

Why is your husband supposed to transfer Property A to them?

You may not know the full story behind who paid what and under what pretenses. It's possible that the details were never stated or agreed upon. It all sounds very complicated with a whole lot of "mental accounting" going on.

I would suggest sitting down with them, forget about the past, and come up with an agreement in writing (not to be legally binding but just to avoid any misunderstanding) that either buys them out of the properties or they buy you out. Be generous in your offer and if you get screwed you write it off as a learning expense. At least the money will be going to family. Who knows, it will probably come back to you in the end.

staythecourse
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Re: Assets tangled with in laws, how to minimize future liabilities

Post by staythecourse » Tue Sep 12, 2017 5:01 pm

denovo wrote:
Tue Sep 12, 2017 2:35 pm
staythecourse wrote:
Tue Sep 12, 2017 1:45 pm
I am one of the harsher posters on this site when it comes to issues like this. My opinion, give them the property, give them back the 50k they gave you, and tell them they did not contribute to your relationship financially so don't expect anything in return. It may seem callous, but you are adults and if you can't afford the down payment then just save more and wait. If they are old and waste all their money that is on them and shouldn't interfere with you two relationship. The knife cuts both ways. If they don't want to give money to you without strings later on that is their decision, but then they should not expect help back in the future.

Mixing money and family is always a potential disaster. Why take the chance.

Good luck.
I agree with you, but honestly it's only a little bit difficult because we are talking about family living overseas and likely different culture/government. I am making a confident guess, based on buying a home for only 10k, and that appreciation, that we are talking about a low-income, underdeveloped country with possibly minimal services. Here, if you cut off your parents, they can suffice on Medicaid/SSI etc, in another country it could mean being a beggar.
If we are talking about an issue in a third world, non social welfare country then yes then it is totally reasonable.. I am not sure we are talking about that though as the OP mentions 20% down payment on properties which is the standard down payment in the U.S. and being given 50k which is A LOT if we are talking about third world countries.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

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