Blending Finances..or not blending.
SO and I have recently talked a bit about our long term game plan. We plan on protecting ourselves with a pre-nup just because you never know. We aren't planning on blending day-to-day finances/savings, which is fine and preferable to both of us since we both have kids and assets, aside from some sort of slush fund we'll both fund for trips and stuff.
Real Estate may be an issue. I'd be moving in with him and he has significant equity in his property already. Of course, he'd keep the equity he already has and if we do something major to the house we'd split the cost and subsequent equity and I'll be contributing monetarily to the household. The original idea was I'd pay all of the utilities just based on our proportional difference in salary, but if he uses that to put back into the house, I earn no equity on that.
Realistically, we're a couple years from this, but I know it'll come up again. How do couples handle this? I don't want to live some place where I'm essentially renting, but I'm not expecting him to give up what he's put into it already simply because we get married. Is there a legal way for him to protect his pre-marriage equity and still intermingle me into the real estate portion? This is an issue long-term if something were to happen to him.
That isn't feasible in my
That isn't feasible in my opinion. If you stay in a place long enough, some work will need to be done. Unless you want to buy new construction every few years, at some point you'll need to do some major work to the house. I guess you guys could pay a lawyer to come up some type of legal agreement on how things will work.
That's really the smaller
That's really the smaller issue. We will do work to the house at some point and split the cost and equity of that. The larger is me "renting" for...the rest of our lives with no stake in the real estate from marriage going forward. I'm sure there is a legal way to do that, that's why I wanted to see how other have handled it. Again, I don't feel entitled to a dime of what he has in it already.
i'd just put $xxxxx.00 equity
i'd just put $xxxxx.00 equity is his outright, anything beyond that is split 50/50. i'd each put 50% in, and you'd each get 50% back if the marriage disolves. i wouldnt do it as % of equity based on income, *unless* your current and potential future earnings are really, REALLY, far apart
This is ideal.
This is ideal.
All good ideas. Selling and
All good ideas.
Selling and buying something else isn't an option for custody reasons for him, aside from the fact it's a new house in a great location, both of us want to be there...at least until the kids all move out. Assuming we're together that long,, which we plan to be, it will probably be less of an issue. Just want to make sure I'm covered too.
If your DH is onboard with
If your DH is onboard with this I think that is the best idea - state what his ownership in equity is when you got married and and increase after that amount is 50 / 50 split.
I know a lady who's new hubby didn't even agree with that and asked her to put money into house upgrades. She said no since she had no vested interest in the house. Well that marriage didn't last too long since he seemed to just want to use her money and her not benefit from any of it.
Oh, I hope he wouldn't dig in
Oh, I hope he wouldn't dig in his heels about that, thI don't know how I'd feel about that. If I'm contributing financially to the household, I expect I should earn a proportionate amount of equity during the marriage.I'd be very concerned about the roots of our relationship if he weren't willing to come to a fair compromise on something like this. I'm a reasonable person, and I don't want any thing I'm not putting into it. I get that he's been burned in the past, but that's why we'd be spelling it all out in a pre-nup. I didn't even want to do that at the beginning, but I see now why it's totally necessary. If we were able to move and buy a place together this wouldn't be an issue, but his custody is prohibitive of that which is more the reason I'd expect he'd understand that it's not fair to ask me to be a renter for our marriage and be expected to put time effort and money into helping him earn more equity that I'd never get back in the unlikely event we were to divorce.
anyways...It's nothing urgent or anything I don't think we'll be able to work out when the time comes, but just stuff to think about up next time the topic comes up.
Regardless of how you divide
Regardless of how you divide it, make sure that you get life residency in the prenup and any trust/will...this will ensure that any heirs for his premarital portion cannot kick you out, if he dies first.
Honestly what i would do, is you split the utilities, and you start buying in by paying the mortgage or property taxes, and become an equal owner, ASAP, then the will leaves it to you/him.
He moved my house when we
He moved my house when we married. In the prenup and my will, he had life residency. However, there were a couple of conditions. He had to pay utilities, insurance, and taxes. If he remarried he had to move. He could not have anyone living with him. And if he vacated the premises for X months he lost his residency (lawyer recommended this so if he ended up in a nursing home my kids would not have to pay to retain the house for him).
exactly, the conditions are
exactly, the conditions are appropriate and smart. I had put the same ones into my prenup (I owned the home).
Life residency is fair (with the conditions), because why would you marry someone, then be willing to have them be homeless if you die before them.
Yes, but depending on his
Yes, but depending on his age, he may be retired and not in a financial position to relocate.
My Mom who is 70, has friends who are basically divorced but have to cohabitate. He lives in the basement and she lives upstairs, they share the kitchen but are more like roommates.
If they sold the house they wouldn't get enough out of it for each of them to purchase a new place to live, not even a condo each. They would be in a position where they'd have a mortgage again or would have to rent and neither of them can afford it.
So by allowing the surviving spouse to live in the house until they either die or move into a care facility you are taking away that worry of having to relocate and wondering if they can afford it. It's a nice thing to do for someone you love.
Your DD would still get the house in the end.
We have in our prenup, that
We have in our prenup, that he gets the equity it was when we married and any equity growth after that we split. Nothing else is co-mingled. I have a house that I rent out and that remains mine. We split all the bills including mortgage on this house 50/50.
No fights over money this way....
Okay, going through a divorce
Okay, going through a divorce so I may not be a lawyer, but I've been paying for one for 6 months.
DEPENDING ON THE LAWS of your state is the #1 issue (please investigate if you are community property state or NOT. Huge ). In my state, (which is CP) his house is his house. You have ZERO claim to it if he does not put you on the deed. He puts you on the deed, you are 50% owner, regardless of WHEN he bought it and prior equity. Now, if he does not put you on the deed and you get divorced, you can claim 50% of the payments paid towards principal and 50% of any improvements done from the date of marriage (but not the increase in value overall, just what the increase the home improvements have done to the value).
I know this is how things work in CP states as I never asked my STBX to put me on the deed to his house, the house I lived in for 8 years and took care of. The house I raised his evil SD in. The house appreciated in value almost $300K and I will get less than 10% of that because I was a dumb bitch and trusted him. Don't be me.
I would work your pre-nup to give him the appraised value of the house on date of marriage. Should you divorce, you are entitled to 50% of the current value on divorce. So if his house is worth $200K on marriage, and you get divorced it is worth $400K, you will split the $200K profit. So he would get $300K and you would get $100K. Otherwise, you will get chump change.
Please understand that the money you make in rent on your house, once you get married is considered community property. So he can come after that. Once you get married, it does not matter if you keep separate checking accounts, 401K's etc. My ex and I never co-mingled anything but he courts don't see it that way.
Geez this brings up even more
Geez this brings up even more worrisome topics than the house. If I own a house when we cohabitate and get married I'd expect to give him the same deal on my house since he'd be helping me maintain a rental too. Again, I'm a fair and rational person and we've always helped each other equally.
Other things I'm now thinking about: Assuming we stay married for 30 years and then one of us dies, do we plan for the short term in the pre-nup and amend wills as time goes by or do we just assume when one of us dies our assets go to our respective kids or the living spouse? Who do our 401ks go to kids or spouse. A pre-nup is great and all, but it deals with the divorce...if it ever happens. We're setting up for long-term or else we wouldn't be waiting or getting married at all.
I guess it's ok to think about these things, but we can talk it all out when the time comes.