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A couple of ideas. First, you keep your 100K separate. He sells his house before you get married and keeps his equity separate. You both continue to live in your house, but keep track of expenses. He pays fair 'rent' and his share of household expenses into a common account. You do the same, except if you don't have enough cash you add some from your 100K account. You pay the bills and the mortgage from this common account. You make him your heir, he makes you his heir. Every three years you re-evaluate. The fun thing is you each still have your own money to take the other person on a nice date, to buy clothes, to fix your car or buy another one.
A variation on this. If he ends up saving enough beyond his expenses he can buy half the equity in the house, at that time he can become a co-owner and be added to the deed. At that time you either put his equity into your 100K account, or you take an equivalent amount from the 100K account and pay off the mortgage.
These are all fair financially and have nothing to do with how much you love and trust one another--which it sounds like you do--so congratulations on finding 'the one'.
A couple of ideas. First, you keep your 100K separate. He sells his house before you get married and keeps his equity separate. You both continue to live in your house, but keep track of expenses. He pays fair 'rent' and his share of household expenses into a common account. You do the same, except if you don't have enough cash you add some from your 100K account. You pay the bills and the mortgage from this common account. You make him your heir, he makes you his heir. Every three years you re-evaluate. The fun thing is you each still have your own money to take the other person on a nice date, to buy clothes, to fix your car or buy another one.
A variation on this. If he ends up saving enough beyond his expenses he can buy half the equity in the house, at that time he can become a co-owner and be added to the deed. At that time you either put his equity into your 100K account, or you take an equivalent amount from the 100K account and pay off the mortgage.
These are all fair financially and have nothing to do with how much you love and trust one another--which it sounds like you do--so congratulations on finding 'the one'.
That's supposed to be a marriage? Accepting "rent" from your spouse? No thanks!
That's supposed to be a marriage? Accepting "rent" from your spouse? No thanks!
That is keeping money issues OUT of a marriage. Makes for a much higher likelihood of success, especially for mature 40-year olds. Neither person feels taken advantage of and each feels more independent and in control.
Background:I'm a 40-year-old widow. I'm getting married to a man my age later this year or next year. We're living together now (in my house), and we share expenses/income and have a combined budget (I handle all the money). The only exception for shared money is $100k from life insurance on my first husband that I have in a separate account in my name only. I have no problem making this joint money once we're married, and he's fine with it being separate for now.
Jobs/Income: He works full-time and has a career where he makes a nice wage for our area. I work part-time and make only a bit more than minimum wage, so I don't bring in much. He's fine with how many hours I work and how much money I make. We see it as relatively fair, since I have assets and he has good income.
Houses: We both own homes. Mine is much nicer, and we agree that we both want to keep mine and eventually sell his (once we're closer to marriage). I have a mortgage for about $75k (house is probably worth $90-100k), which is of course in my name and my late husband's name. I would like to put my house in both of our names once we marry, but I'm not sure the best way to go about this.
Option 1: One of my options is to take out a new mortgage in both of our names, thereby closing out the current mortgage. Then we would both own the house. Of course, this would mean going through the entire process of getting a mortgage again, and paying the associated closing costs again...an expensive option! And of course we would still have a mortgage that way.
Option 2: The other option I'm considering is using my large lump sum in the bank to pay of the mortgage, then getting the deed changed to be in both our names. This would deprive me of most of my lump sum, but it would leave us with considerably lower expenses (no mortgage!), a more flush budget that would allow us to save more for retirement and other stuff, and much less mortgage interest paid over the long-term.
Additional thoughts: I'm leaning towards just paying off the mortgage entirely and being done with it. I'm smart enough about money to know this goes against most advice on the topic, but I think it's probably the right choice for us. I don't feel comfortable investing the money because I don't want it tied up and don't want to risk losing it. I worry that if it sits in the bank (earning very little) that it will be pissed away little by little until it's gone, and that won't benefit us nearly as much as a paid-off mortgage. And since neither of us is the type to borrow against our houses (and we have plenty of income anyway), the paid-off house should STAY paid off.
Thoughts?
ETA: We don't have children. We don't have other debt. We save plenty for retirement in target funds appropriate for our age (but wouldn't mind saving more). Paying off the mortgage wouldn't deplete our cash funds, and we would still have plenty in our emergency fund.
OK, I've been thinking about this a lot over the past 24 hours. So I am going to ask you some pointed questions, mostly revolving around what I've bolded above.
You are living with your boyfriend in your house right now, right? He owns his own home, but it's not as nice as yours, if I understand you correctly. This concerns me right off the bat, because though I don't know where you live, you say he has a good income and career, and yet his house isn't even as nice as yours and yours is only worth about $90k to $100k - is that what you said? Look, I don't live in a big metro area or a high cost of living area, but around here, $90k doesn't buy much. I'm not saying you live in a hovel - I'm more concerned that the house he owns isn't even as nice as yours (correct me if I'm wrong, but I'm guessing that means it's not worth as much as yours). So this man you're living with, the one with a good career, doesn't seem to own much in the way of property. I think I read in another post that if he sells his house, he won't have enough to pay off your mortgage - maybe I read he might clear $25k. Hmmmm. That isn't much to be bringing to the table.
But still - here's an option, if he wants his name on that mortgage. Have him sell his house and put WHATEVER he clears down on your house. Say it's $25k. Then you match that from your $100k. That should leave you $75k in YOUR NAME only, and should give you and your new husband a very low mortgage (you can recast your loan with that large payment without having to go through a full refinancing brouhaha and avoid many if not all of the fees - there may be a very small fee to recast the loan but nothing like refinancing it).
If you live in a community property state, from the date he moved in till you sell your house, generally speaking he will own half of the APPRECIATED value even if he pays nothing down. For instance, say you own a house worth $100k when he moves in. Say you sell it five years from now for $130k (updating, or improving market, whatever). If you got divorced, the court would probably award him at least $15k even if he wasn't on the mortgage, because while you were married, the house appreciated $30k and half of that is his.
But I digress.
Anyway, I would only match whatever he puts down on the house. Then I would take my other $75k and put it in an IRA - something that neither of you can tap into easily but you can get to in an emergency. Make him the beneficiary but keep it in your name ONLY.
Have you already paid taxes on this money, by the way?
Couple of other questions while I'm at it:
Has your future husband said ANYTHING about you moving that lump sum into a joint account? Whose idea was it to pay off the house with that money? Whose idea was it to add him to the deed? And if it was your home prior to the marriage, and your money that pays off the mortgage, why is it so critical for him to be on the deed?
You say he has a career and a good income. What sort of savings does he have? Retirement accounts? 401Ks? Inheritances? Surely he owns more than a very small amount of equity in his house.
The idea I like best is for both of you to sell your homes and buy a home together. Leave your $100k in a separate account in your name only with him listed as the beneficiary. If he has a problem with this, then that's a huge red flag. A woman who only works part time NEEDS that money as a backup plan, with or without a man in the picture. This is not his money and shouldn't BE his money. This is money your deceased husband left to YOU - to help take care of YOUR needs in the future.
OK, I've been thinking about this a lot over the past 24 hours. So I am going to ask you some pointed questions, mostly revolving around what I've bolded above.
You are living with your boyfriend in your house right now, right? He owns his own home, but it's not as nice as yours, if I understand you correctly. This concerns me right off the bat, because though I don't know where you live, you say he has a good income and career, and yet his house isn't even as nice as yours and yours is only worth about $90k to $100k - is that what you said? Look, I don't live in a big metro area or a high cost of living area, but around here, $90k doesn't buy much. I'm not saying you live in a hovel - I'm more concerned that the house he owns isn't even as nice as yours (correct me if I'm wrong, but I'm guessing that means it's not worth as much as yours). So this man you're living with, the one with a good career, doesn't seem to own much in the way of property. I think I read in another post that if he sells his house, he won't have enough to pay off your mortgage - maybe I read he might clear $25k. Hmmmm. That isn't much to be bringing to the table.
Both of our houses are in the same neighborhood, and yes, mine is nicer. My late husband and I bought a fixer-upper and fixed it up nicely. It might be worth more than I stated at this point, but I can't be sure, especially since the housing market isn't great. His house is smaller and more run down, but to be fair, he bought it when he was just starting his career and making less. And he's not the handy type, so a bunch of cosmetic stuff in his house is in dire need of attention. And I can't be sure what his house will bring in this market, either. It's all a guess.
But still - here's an option, if he wants his name on that mortgage. Have him sell his house and put WHATEVER he clears down on your house. Say it's $25k. Then you match that from your $100k. That should leave you $75k in YOUR NAME only, and should give you and your new husband a very low mortgage (you can recast your loan with that large payment without having to go through a full refinancing brouhaha and avoid many if not all of the fees - there may be a very small fee to recast the loan but nothing like refinancing it).
This could be a good option. It's something to consider.
If you live in a community property state, from the date he moved in till you sell your house, generally speaking he will own half of the APPRECIATED value even if he pays nothing down. For instance, say you own a house worth $100k when he moves in. Say you sell it five years from now for $130k (updating, or improving market, whatever). If you got divorced, the court would probably award him at least $15k even if he wasn't on the mortgage, because while you were married, the house appreciated $30k and half of that is his.
I don't live in a community property state. But even if I did, this doesn't necessarily horrify me.
But I digress.
Anyway, I would only match whatever he puts down on the house. Then I would take my other $75k and put it in an IRA - something that neither of you can tap into easily but you can get to in an emergency. Make him the beneficiary but keep it in your name ONLY.
You can't drop that much money into an IRA all at once. Nor do I want all of my money tied up in retirement funds that are invested for the long-term (in other words, in riskier investments...not a good emergency fund).
Have you already paid taxes on this money, by the way?
I don't owe taxes on the money, as life insurance isn't taxable here.
Couple of other questions while I'm at it:
Has your future husband said ANYTHING about you moving that lump sum into a joint account? Whose idea was it to pay off the house with that money? Whose idea was it to add him to the deed? And if it was your home prior to the marriage, and your money that pays off the mortgage, why is it so critical for him to be on the deed?
You say he has a career and a good income. What sort of savings does he have? Retirement accounts? 401Ks? Inheritances? Surely he owns more than a very small amount of equity in his house.
He basically has no savings, though he does have retirement money (and I'm having him raise his contribution for retirement to do better from now on). Some of it is that he went through a divorce that left him with less than he might have otherwise had by this point in life (since he and his ex decided together--no judge needed--to split their stuff pretty much down the middle). Plus, he's basically not great with money. Mind you, he's not terrible with money (though he would say so). He doesn't have debt, and he lives pretty simply. But he doesn't think about money on any deep level or try to come up with ways to handle his money better or save more or be more frugal like I do. He just doesn't think about money much (and doesn't want to...he's perfectly happy leaving the budget to me entirely, so long as I give him a little pocket money).
The idea I like best is for both of you to sell your homes and buy a home together. Leave your $100k in a separate account in your name only with him listed as the beneficiary. If he has a problem with this, then that's a huge red flag. A woman who only works part time NEEDS that money as a backup plan, with or without a man in the picture. This is not his money and shouldn't BE his money. This is money your deceased husband left to YOU - to help take care of YOUR needs in the future.
No, we are not selling my house. It's silly to me that somehow magically it's supposed to fix things if we'd only buy a house together. We already have a wonderful house for the area, fixed up to our liking and full of our stuff, and we're happy as can be with it and won't be able to find another as nice as it for as little money. It makes no sense whatsoever to buy another house in our circumstances. And I might feel differently if he hated the house or really wanted to choose a house together, but he's just not that choosy and doesn't care that much where we live. We'll stay and find some solution that is fair for both of us.
I guess that many of us have seen people taken advantage of during second marriages and do not want that to happen to you.
Of course, I hope that you work everything out and try to make it "fair" to both of you but you will never get that $100,000 back if you use it all up right now.
At least talk to a financial counselor to help you make the best decision. And take you time in making those decisions.
OP, you're not wealthy. You're 40 years old, work part time, and have very little equity in your home, and $100,000 in "savings," which isn't really savings - it's life insurance money your deceased husband left to you - for YOUR security.
I applaud you for wanting to be so fair with your boyfriend, but as a woman who filed for divorce in my forties, and who has lived through the financial devastation of divorce, I guess I'm just naturally protective of women and skeptical of any situation which requires a woman to basically give up half her net worth in one fell swoop. Actually, I'd be worried about that in a man's case as well.
Look, your boyfriend is living in your house, and you're not even married and as far as I can tell, there's no set date. So what if he's paying most of the bills - it doesn't sound like you have a lot of bills to begin with, and he'd be paying to live ANYWHERE so I'm really not blown away by his contribution as far as what you've shared with us. I mean, it's nice that he's paying bills but they're HIS bills too, since he's living in the house, using the utilities, etc.
I'm in my fifties now. I'll tell you what worked for my husband and me. When we got married ten years ago, I moved into his house. It was in his name, the equity was his, and I didn't expect him to add me to the deed or whatever. I made less money than he did too, even though I worked full time. So what we did was divide the bills up proportionately - in other words, he made twice as much money as I did, so he paid that proportion of the bills. We didn't divide things into two perfect halves, but I also didn't own the house. We kept our accounts separate for FIVE YEARS. After five years, we bought a house together, and we put each other on our accounts (though we still have separate checking accounts - just makes things easier for both of us).
I think it was very important to both of us to see how the other handled money (not bragging but we both have credit scores over 800). We had both been burned by spouses with poor financial skills and ethics, and so we know how quickly one can lose control of one's financial situation. We needed the time together, several years of living together as husband and wife, watching how the other handled financial decisions and situations, to be sure that we were ready to merge our finances completely.
Marriage DOES change a lot of things. And let me point out something else you may not have thought of. I am in my fifties now. I quit working when I turned fifty - out of necessity due to the increasing needs of four elderly parents and inlaws. This was an agreed upon arrangement with my husband and not one either of us took lightly. Now that I am in my mid fifties, I am VERY glad to be married to a very good man, because guess what - it would be very daunting to try to restart a career at this stage in my life. So basically my financial well being relies on the integrity, and the health, of my husband. Thankfully we have both saved a LOT of money in case of an emergency, but still...it's scary to realize that I'm "past my prime" career wise. I never would have thought of that when I was in my forties. I still feel young, sharp, etc - but I am not perceived that way any longer by most hiring managers. So...I'm saying this as gently as possible, but you don't seem to have an established, lucrative career. You have $100,000 and a small amount of equity in a house. You need to be VERY CAREFUL AND PROTECTIVE of this small nest egg. I can't stress this firmly enough.
Before you get mad at me, remember that you did ask for advice on a public forum! I promise you that my intentions are not to offend you, but instead to sort of verbally take you by the shoulders and shake you and beg you to be very, very careful. It's not that you shouldn't trust your boyfriend. It's just more along the lines of being a responsible middle aged woman.
OP, you're not wealthy. You're 40 years old, work part time, and have very little equity in your home, and $100,000 in "savings," which isn't really savings - it's life insurance money your deceased husband left to you - for YOUR security.
I applaud you for wanting to be so fair with your boyfriend, but as a woman who filed for divorce in my forties, and who has lived through the financial devastation of divorce, I guess I'm just naturally protective of women and skeptical of any situation which requires a woman to basically give up half her net worth in one fell swoop. Actually, I'd be worried about that in a man's case as well.
Look, your boyfriend is living in your house, and you're not even married and as far as I can tell, there's no set date. So what if he's paying most of the bills - it doesn't sound like you have a lot of bills to begin with, and he'd be paying to live ANYWHERE so I'm really not blown away by his contribution as far as what you've shared with us. I mean, it's nice that he's paying bills but they're HIS bills too, since he's living in the house, using the utilities, etc.
I'm in my fifties now. I'll tell you what worked for my husband and me. When we got married ten years ago, I moved into his house. It was in his name, the equity was his, and I didn't expect him to add me to the deed or whatever. I made less money than he did too, even though I worked full time. So what we did was divide the bills up proportionately - in other words, he made twice as much money as I did, so he paid that proportion of the bills. We didn't divide things into two perfect halves, but I also didn't own the house. We kept our accounts separate for FIVE YEARS. After five years, we bought a house together, and we put each other on our accounts (though we still have separate checking accounts - just makes things easier for both of us).
I think it was very important to both of us to see how the other handled money (not bragging but we both have credit scores over 800). We had both been burned by spouses with poor financial skills and ethics, and so we know how quickly one can lose control of one's financial situation. We needed the time together, several years of living together as husband and wife, watching how the other handled financial decisions and situations, to be sure that we were ready to merge our finances completely.
Marriage DOES change a lot of things. And let me point out something else you may not have thought of. I am in my fifties now. I quit working when I turned fifty - out of necessity due to the increasing needs of four elderly parents and inlaws. This was an agreed upon arrangement with my husband and not one either of us took lightly. Now that I am in my mid fifties, I am VERY glad to be married to a very good man, because guess what - it would be very daunting to try to restart a career at this stage in my life. So basically my financial well being relies on the integrity, and the health, of my husband. Thankfully we have both saved a LOT of money in case of an emergency, but still...it's scary to realize that I'm "past my prime" career wise. I never would have thought of that when I was in my forties. I still feel young, sharp, etc - but I am not perceived that way any longer by most hiring managers. So...I'm saying this as gently as possible, but you don't seem to have an established, lucrative career. You have $100,000 and a small amount of equity in a house. You need to be VERY CAREFUL AND PROTECTIVE of this small nest egg. I can't stress this firmly enough.
Before you get mad at me, remember that you did ask for advice on a public forum! I promise you that my intentions are not to offend you, but instead to sort of verbally take you by the shoulders and shake you and beg you to be very, very careful. It's not that you shouldn't trust your boyfriend. It's just more along the lines of being a responsible middle aged woman.
First, the amount we'll get for his house won't be enough to pay off the mortgage. Secondly, how in the world would that be fair to him if he could? That means he would have nearly paid for the entire house on his own...a house that would be half mine. That means I'd be the one getting a freebie. I'm looking for a solution that is actually fair, which is why I asked the question.
^^^
Quote:
Originally Posted by MeeMee Monster
You really come across as a judgmental prick here. Yes, I live in a LCOL area. So, what? Not everyone wants to live in a big city, and while wages may be higher in a big city, so are the prices of goods and services. I live about an hour from one of the largest cities in the country, and that's close enough for me.
Also, I never said that I had always worked part-time. I spent many years working full-time and saving for retirement. My late husband always worked full-time and saved for retirement, and I inherited his retirement fund, as well. So actually, I do have a decent amount in my retirement fund. And I continue to save for retirement. That's partly why I choose to work part-time, so that I can put money in a 401(k).
We just started living with each other recently, and we're not quite ready to tie the knot just yet. Anyway, there's no hurry. We haven't really worked through details for the wedding, but we're probably getting married in our yard with less than ten people present, at a cost of less than $500.
OP, how long have you dated your current boyfriend? How long has your husband been deceased?
Also, you say you have other retirement funds set aside. Sorry I missed that earlier - that can make a difference. Your opening post made it sound as if you didn't have a lot of other retirement money saved. What would you say your total net worth is? Just yourself, not your boyfriend.
I'll tell you something else, and I'm not passing judgment here - just commenting. I wouldn't personally tell someone I was dating my net worth, or about a big chunk I had sitting somewhere, till I had a ring and a date. That's just me, but I would rather not even have to consider whether or not a man who didn't have much of anything loved me, or loved my financial status. I'm not saying you've done this - it's just a general comment. I'd keep that sort of information to myself till WELL into a relationship. You may know each other very well at this point, I don't know. But you may not.
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