Marriage money conflict

iVillage Member
Registered: 01-15-2010
Marriage money conflict
15
Fri, 01-15-2010 - 4:20pm

Linda writes:


We have a problem which is a threat to our marriage:

Dan and I married under Dan's condition that I move into his house, which I did. The house remains owned solely by Dan and is free and clear of any debt. The utilities run $250.00 per month. The taxes and insurance equates to $150.00 per month.

Once we married and I moved into Dan's home, the home that I lived in became a rental. Since it's been available for rent I have only been able to rent it out 50% of the time. The house remains solely owned by me and I collect the rent when it is rented out. I also pay the taxes, insurance and expenses on it.

This is the second marriage for both of us. We are in our late fifties and retired. Our children are grown.

We decided not to integrate our finances or assets. Both Dan and my (previous) homes are valued the same.

The question is:

1.)

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iVillage Member
Registered: 05-18-2009
Fri, 01-15-2010 - 4:30pm

This is a messageboard for women. If you want men's advice, you should post on askmen.com or a messageboard geared toward men. There are a couple of boards here to talk about understanding men, but even then there are only a couple of regular males who post. There's also a marriage and money board with a financial expert, might be a good place to ask.

Since this isn't a problem with your relationship, it's just a problem with sorting out financial specifics, why don't you ask the help of a financial adviser?

If you want my honest opinion, and I'll put it very simply, I think if you plan to maintain separate finances then neither of you are responsible financially for the other's assets. That includes the house you live in. Dan, if your stipulation for marriage was that Linda move into your home, you should be splitting the cost of living there (utilities and groceries) but she does not owe you any money from her rental properties, nor vice versa. You should not be using one another for profit.




Edited 1/15/2010 4:31 pm ET by undercovercrab
iVillage Member
Registered: 03-26-2003
Fri, 01-15-2010 - 11:24pm
Welcome to the board, Dan and Linda ~

I agree with the suggestion of a financial adviser.

Honestly, I'm wondering why you married. It seems to me you're looking for business partners and not marriage partners. I cannot begin to relate to splitting hairs and worrying about your money vs. my money. If one of you lost everything would the other boot you out? Refuse to help you? Would they be taken in, or looked upon as a leech? Seems to me your best bet is for each of you to live in your own residence and pay your own bills. You can visit each other in your own homes as you choose but avoid all the problems of figuring out who might be taking advantage of whom or whom is paying more than their fair share -- and with that we're back to business partners, not marriage partners.

Linda's post wasn't on this board, correct? There are a few men who post on iVillage, but not a lot and none currently on this board.

Best of luck ~









"Ignoring the facts
does not change the facts"

~ Author unknown


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"Ignoring the facts
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iVillage Member
Registered: 06-24-2008
Sat, 01-16-2010 - 12:47am

Hi Linda and Dan. There really aren't any men that seem to post advice here right now, though iVIllage messageboards do have men sprinkled here and there, and there are a couple boards geared toward men. I'd ask my dh his opinion but he just fell asleep so maybe tomorrow. I'm happy to give you my thoughts, but I also have some questions.

The agreement was that you don't combine money, but living together, it seems that the agreement is a little hard to keep I guess? I'm wondering how you share grocery expenses? Are there any other expenses you end up splitting? Anything you agreed to split before moving in together in terms of expenses?

It seems to me the issue is Dan's insistence that he live in a home he owns. Dan is now claiming he could rent out his home, keep the profits from that, and you would both then have to share expenses on a third residence. You could do that, but then Dan wouldn't be living in a home he owns which was one of his three main requirements for a relationship.

I personally don't like the idea of a husband and wife paying rent to one another. Something about that just screams "business deal" and not marriage to me. I do think it's fair Linda pay something towards the living expenses in the home they live in, especially since she has the means, but only if she's not having a *loss* from her primary residence that she is partially renting. I don't think Dan has a right to any of the income from Linda's 9 rental properties. The agreement was not to combine assets, those are Linda's assets and they are investments, have nothing to do with monthly living expenses or primary residences and there seems to be nothing about your agreements up to now that one of you would share rental/investment income with the other, especially not money going one way.

However, what to do about the income/expenses from the two residences you each lived in prior seems to be a little different than the rental/investment properties, and I can see how you'd struggle to determine what is fair here.

One option might be to look at this way: the two of you together, as a married couple, own two primary residences. You could live in either one, rent out the other, and use the income to offset the monthly expenses of both homes. So let's say the rental income was $1,500/mo for either residence, but it was only rented 6 months of the year, that would provide $9,000/year income. If each home had tax, insurance and utilities expense of $400/mo, that's $800/mo for both homes, or a cost of $9,600/year cost. The rental of one of the primary residences is almost enough to offset the housing costs of both. In that example there is a slight shortfall, you could split that cost. If there was a profit, you could put it in a shared account and use it for other shared living expenses like food, travel, etc. You would still each own your separate residences, but consider the monthly income/expenses of BOTH combined to be something you shared in.

That's assuming of course that renting "either home" was truly an option. If Dan's determination that he "had" to live in a home he owns is really non-negotiable, or Linda feels she compromised something important to not live in a home she owns, then the above option probably would seem very unfair to Linda.

Linda - can you imagine a scenario where Dan had moved into your residence, rented his own, profited from that and paid you nothing toward the housing costs of your home?

Dan - did you not consider that your desire to live in a home you owned would financially benefit Linda? Also, would you feel this way if Linda could not rent her residence out, and therefore had a loss every month on that residence? Would you want her to share the costs if her portfolio was smaller than yours, or if she only had 2 other rental properties compared to your 4?

"The last of human freedoms - the ability to choose one's attitude in a given set of circumstances." - Viktor Frankl.



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iVillage Member
Registered: 02-06-2009
Sat, 01-16-2010 - 4:38am

First, I think it's a very cool idea to have both parties give their side.

Second, this is a predominantly female website. If you specifically need a man's advice, there are better sites to visit.

To answer your question, I think it's fair for Linda to pay half of the costs of the house you two share, but not to pay rent on top of that. It might be worthwhile setting up a joint account from which the utilities, taxes, insurance, groceries etc get paid, and both parties put an equal amount into that fund.

Since you are not commingling funds and have no shared children, I don't think the comparative size of the portfolios is relevant.

iVillage Member
Registered: 09-26-2006
Mon, 01-18-2010 - 2:05pm

Hi, I like the way you both presented your arguments. How to split expenses can be a huge problem. It has been a problem in my relationship, although as time goes along it is less important.

My take is that any changes due to your marriage should be accounted for on a temporary basis. I assume that in a few years the residence of the wife can be counted as just another rental, but since she is only renting it now because she got married and moved out, I see it as directly relevant in the short run. So if there is a surplus in rent from that place, I think the couple should split it, 50-50. If there is more expense than cost, I think the couple should split it.

I think the expenses of the current residence should also be split 50-50.

The other assets should be dealt with as separate estates, as you had designed.

Good luck! I hope my opinions are not too "black and white" for you; it is just how I see it.

iVillage Member
Registered: 01-15-2010
Mon, 01-18-2010 - 2:32pm

Thanks so much for taking the time to think about and respond to our dilemma.

To answer the question whether or not we split other expenses - the answer is yes. We share the cost of groceries, eating out, gas for mowing the lawn, trips, etc.

One of the reasons we chose not to combine assets/income is this. Having gone threw a lengthy divorce (in and out of court several times) just to get a 50% settlement, was not something I wanted to have to go through again in the event that it didn’t work out between Dan & me. (Being realistic, the statistics for a 2nd marriage succeeding is not very good.)

The other reason is that he and I were alone for many years. We each worked hard and sacrificed for a long time to build up our finances in an effort for security in our “golden years”. We both have children from a previous marriage and want to ensure that they will have an inheritance from the fruits of our labor.

Yes, we could combine everything, but the surviving spouse could then leave everything to only his or her own children.

Or, we could combine everything (income and assets) and had a trust leaving the deceased assets to his/her children. The problem with that is that upon the death of one or the other, the trust can be contested and be declared null and void. He/she then could leave everything to only their children. (I know someone who did just that.)

Or, we could combine all the income during our lifetime, but then how would the other feel about “paying for half” of improvements on the other’s property, which was going to be left to the other’s children? (Would each desired improvement on his/her property end up in another huge “discussion”?) There is just so much to sort threw!!!

We both agree that sharing the cost of the electric, heat, phone, cable and other living expenses (i.e. groceries etc.) is fair.

This first time around was much easier - we both started out with nothing!!!

Hope to hear back from those who wrote and from more of you. Thanks.

iVillage Member
Registered: 06-24-2008
Mon, 01-18-2010 - 3:55pm

I agree with all the reasons to keep assets separate. That is common in second marriages and between people who established themselves well before marriage. I don't think that's an issue, no need to combine or share any assets at all, or change any ownership rights.

I wonder why the need to see Linda's residence rental income as separate? That income would not exist but for the marriage, because Linda would be living in that house in that case. That money could be used to offset the insurance/taxes of both main residences, and any shortfall or surplus could be shared just like utilities, groceries, etc. Are either of you opposed to that option and if so, why?

"The last of human freedoms - the ability to choose one's attitude in a given set of circumstances." - Viktor Frankl.



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Ten Rules for Being Human
"The key to good decision making is not knowledge. It is understanding."
Malcolm Gladwell Blink

iVillage Member
Registered: 01-15-2010
Mon, 01-18-2010 - 5:10pm

You are absolutely right, if not for the marriage, there would be no rental income from my previous residence. Your (and others) suggestion has been on the table.

Unfortunately, because of the economy and rural area that we live in, I have only been able to rent it approx. 50% of the time. Therefore it operates as a net loss after taxes and insurance.

iVillage Member
Registered: 06-24-2008
Mon, 01-18-2010 - 5:31pm

How does your "net loss" compare to Dan's "net loss" You have 50% rental income less some reasonable amount of expenses, and he just has the reasonable expenses nothing to offset it, right?

If you are paying on your primary residence about what he is paying for his primary residence (on average) then you are each having about the same "primary residence cost" and it doesn't really matter which house you are living in, you are effectively sharing that cost. If that was the case, then I can see how you would be hesitant to pay Dan part of his monthly housing costs, since you'd be paying for part of two residences and he's only paying for part of one.

"The last of human freedoms - the ability to choose one's attitude in a given set of circumstances." - Viktor Frankl.



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Ten Rules for Being Human
"The key to good decision making is not knowledge. It is understanding."
Malcolm Gladwell Blink

iVillage Member
Registered: 01-15-2010
Mon, 01-18-2010 - 5:38pm

Dan is asking me to pay for 1/2 of the utilities that we use on the house we are living in (his house). This is agreeable. He is also asking me to pay for 1/2 of the taxes and insurance on it.

He is also asking me to pay $160.00 from the profits on my other rentals.

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