Blending a House Financially...Need Advice and Ideas to Consider

[cypher1]

. It seems like no matter what you do, you're either going to regret it, or he is going to be mad. Here's probably your best option. Sell everything before marriage, then purchase a house together. Still get a prenup of all your assets before marriage. Then you guys can go 50/50 on a new home, repairs, bills, maintenance, insurance, property tax, etc etc. Everyone wins. Other than that, I can see ugly storms on the horizon.

This. You probably won't like that option, but by buying a different home together, you're starting pretty even. That example reminds me of my ex and our housing situation. We both had our own houses, and basically agreed if we ever got married (obviously we didnt get that far), we'd sell ours and start over since neither of us wanted to start a life together in someone else's home/memories. Not that either of us were ever married before, but she had kids and an ex that used to live there.

[disneysteve]

Last comment for me.

The two of you NEED a lawyer AND premarital financial counseling. There are too many moving parts and incongruent expectations from both parties. Don't say I DO until you have worked through the issues and are both firmly on the same page.

Good luck to you both.

[scfr]

There must be a way for you as an individual to sell the house to the two of you as a couple, effective once you are actually married. Then you'd own it jointly and all expenses and appreciation "from this day forward, etc." would belong to the both of you equally, but you'd get all of the appreciation that occurred up to the wedding day. You'd both put in whatever amounts you agreed on toward the down payment. Hopefully he is bringing significant financial assets to the marriage, and maybe the 2-person-couple combined would have enough to buy out the 1-single-person (you) and pay "cash" with no mortgage. As far as what you the unmarried single-parent individual would do with the excess proceeds from the sale to the 2 of you as a couple, that is where you could shelter some of your pre-marriage assets for you and your child, right?

This makes sense in my head but it's hard to explain. I don't know technically how it would work. But it seems you could clean the slate and start over as a couple with the house without wiping out what you've worked for and gained so far. And no one would have to move.

[Dahlia]

Ok, I assure everyone that I am DEFINATELY going to involve a lawyer and prenup. Those two items are next steps plans of action.
I was checking with this forum to see if I had missed something. Maybe there was some option I had not considered. But going off the reactions, I have considered everything and the reality is that there is no easy to understand path forward.

I doubt we will decide to sell the house and start fresh. That was our initial plan and we have looked at houses on and off over the years. We have not found a house we like more than the current house. I have a lot of sentimental value built into the house that makes it very hard for a different house to compete. Fiancé knows I'm attached and won't push me to leave the house if I'm not ready to do so. So most likely, we are staying.

We have considered buying a home together, and me renting out my current home. But I'm hesitant to consider that because I think it offshoots tons of other problems for me, such as trying to conjure a down payment, and moving a huge amount of stuff, and adding another rental responsibility onto my plate.

So in all, I think the next step is to meet with a lawyer together and tell him/her of the situation. I am really hoping that the lawyer very boldly with no mincing words "do not mix assets". And I hope that is just what Fiancé needs to hear to clarify all of the murkiness and risk we are taking on by mingling the house. When I say it, Fiancé hears it from a person invested in a particular outcome (keeping the house in one family line). Maybe if a Professional Stranger says it, it will better outline the risks involved.

And if Professional Stranger Lawyer says "Good idea! Let's draw up paperwork that outlines the expectations to be met for Fiancé to be co-owner of the house." ….I don't know. Maybe they will be able to convince ME that co-mixing this house is a good idea.

So. That brings me to my next question...What kind of Lawyer do I hire? A family law lawyer or a real estate lawyer?

scfr- I am concerned about what happens to the house after I die. I want my daughter to be able to live in the house if she chooses after I die. Him buying me out for half does not help that concern.

[kork13]

Nice to hear from you again Dahlia, it's been a while!

3 options in my opinion:
A) Pre-nup + specific treatment in your will, or perhaps a trust for your daughter. You'll make your lawyer-of-choice very happy. What's yours stays yours in the event of divorce, and upon your death, your assets go solely to your daughter. Similarly, what's his stays his, and all of his assets pass solely to his daughter. You either maintain largely separate financial lives, or you maintain your pre-marriage assets separately & combine everything that happens from the wedding day on. The difficulty with your situation is that currently, you both appear to be treating this engagement/marriage just like you did your divorces -- as a business deal to be negotiated. Not judging at all, just observing. Unfortunately, mixing business with pleasure (love/relationships) doesn't always work out very well.

B) Sit down and talk this through like grown adults. Maybe get someone to referee the discussion for you, like a marriage counselor (way cheaper than lawyers, and way more helpful). Explain your concerns about preserving the house for your daughter in the event of your death, not wanting to create weird dynamics between him & your ex, not wanting to be at risk/obligated to him in the off-chance that your marriage goes south. That discussion is going to hurt his feelings, he'll possibly doubt your genuine earnestness in your relationship, and you're going to feel guilty and/or defensive about those things. What you both need to understand is that, at least for you, this issue is an emotional security issue -- not a strictly financial one. (If you can't see that yet, I'd say that it's even more important for you both to go meet with a marriage counselor.) So you need to deal with this from an emotional standpoint -- talk through your thoughts/concerns/feelings, and honestly listen to his. Come to an agreement that you both can accept as fair, equitable, and acceptable. Perhaps that will still include a pre-nup of some sort & caveats in the wills, but emotionally, their existence would not be a result of your fears & hesitancy, but rather out of respect for one another's feelings on these issues.

C) Recognize that this is all just a shell game, and accept the premise that once you get married, what's yours is his/what's his is yours. Assets, liabilities, income, expenses, everything. He's got cash. You've got a mortgage. You both earn respectable incomes, and participate equitably in the household finances. Combine everything -- no mine/yours, just ours. If each of you bring relatively equal (or agreeably equitable) assets into the relationship, call it even-steven from "I do", and move happily along with your lives. And don't look back.

Personally, I'd prefer C. I'd be happy with B too. A if necessary, but doing so seems fraught with unhealthy relationship dynamics.

If it helps at all, my marriage involved very similar proportions, just with smaller numbers. I was 28 y/o, earned $70k, I owned a ~$190k house we both loved (still own it, still love it), with ~$80k equity, plus $220k-ish cash/investment assets. She was 29 y/o, earned $40k, owned a $100k house with ~$10k equity, $30k in student loan debt, and less than $10k in savings/investments, and each of us carried varying degrees of various emotional/relationship baggage. Financially, we weren't even in the same ballpark. We kept everything separate while dating/engaged, but when we got married, we combined everything, paid off her debt & house, later sold her house, and rented out mine. I followed "Option C," and I've not regretted it for a second.

Have you considered (or discussed) the possibility that perhaps your fiancee is trying to help put you both on solid, equal footing for a marriage into which he wants to invest everything that he's got? And maybe he's hoping you'll agree to do the same? I dunno....call me a romantic (which really, I'm not--at times much to the chagrin of my dear, lovely wife).

[kork13]

So. That brings me to my next question...What kind of Lawyer do I hire? A family law lawyer or a real estate lawyer?

Family and/or estate lawyer. Real estate lawyers won't know the details of your states community property and divorce laws, and a thorough knowledge of both are essential if you do go the pre-nup route.

scfr- I am concerned about what happens to the house after I die. I want my daughter to be able to live in the house if she chooses after I die. Him buying me out for half does not help that concern.

This digs into your personal life a bit, so my apologies... But to what extent has your ex retained parental rights over your daughter? Will your fiancee be legally adopting your daughter? Who would you want to raise your daughter? Would you want to give your then-husband the boot from the house if you died & left the house to your daughter under the care of your ex? I'm just kinda confused by what appears to be a still-messy relationship with your ex, at least where it concerns your daughter.

[Dahlia]

Kork, will you be my counselor? LOL. Just kidding but you summed up all of my postings into a concise understanding of my mentality. I do consider the house to be my security blanket. No matter what happens, I want a roof over my head, and I'd have trouble forgiving myself if I lost this particular roof.

my Ex and I have 50/50 custody (although I pay him monthly child support...he is unemployed and I prefer to make sure there is a decent roof over my daughters head). He is an excellent dad and he would raise my daughter completely if I die. He would also probably burn through all of my money and assets in a few years, but I cant control his spending or mentality when it comes to money (I tried so many times when we were married). I understand there are options to set up a trust and I'll be exploring them.

I went through a divorce where I traded rental properties to keep the house. I was married to someone that did not financially contribute during the marriage, and then wanted half of everything when I eventually just gave up on the marriage. I had mixed my inheritance into assets purchased during the marriage- basically I bought properties using my inheritance. I had believed in the "what's mine is his" advice and I put his name on all paperwork alongside mine in the purchases. Because we were married at the time of purchase- he was eligible for half at the time of divorce. Despite that he didn't contribute to the properties. Now I'm ultra wary of mixing finances.

And I don't think that is a bad thing. I want a partnership. I want to help him succeed and him the same for me. But I definitely want to protect myself this time. Call me jaded or scared, or maybe not in the correct headspace to give up myself in the name and faith of love. But I did that before and I was slowly and subtly used. I'd like to be together with Fiancé for love reasons, rather than financial entanglement reasons.

[cypher1]

He is an excellent dad and he would raise my daughter completely if I die. He would also probably burn through all of my money and assets in a few years, but I cant control his spending or mentality when it comes to money (I tried so many times when we were married). I understand there are options to set up a trust and I'll be exploring them.

I sent the following info to my sister and BIL not too long ago, as they asked me to be the trustee in case something where to happen to them. BIL's brother would be the one to raise their kids, but they admitted they weren't comfortable with his financial decisions. With a trust you can have others make that call if you question the ex's management of finances.

http://www.barrons.com/articles/SB125936551043767209

https://www.thebalance.com/choosing-a-trustee-for-your-trust-fund-357253

http://www.elderlawanswers.com/how-to-choose-a-trustee-15384

Lot of good info. To summarize, no matter who you pick for a trustee, you may want to consider personal selection, along with co-independent trust from an Institute(they charge a fee typically 1%), so you have co-trust from both sides. Also consider a back up contact in case things change, and review the process very few years.

[LivingAlmostLarge]

I will play the devil's advocate and say buy a new house. Because I get how your partner feels. He is not "renting" If he is paying to maintain the house 50%. He is a partial owner/investor. Others may not like to hear it but it sounds like he's fully invested in the relationship. That being said if you are unhappy then don't get married but be prepared to live with the consequence.

[breathemusic]

If I were you I wouldn't be willing to let him buy into the house. Sorry, but relationships aren't guaranteed to last. We all hope they do, but it isn't reality. I don't think that taking that into consideration when you have things like a kid to plan for are a bad thing. I don't think that it means you don't love your fiance. I bought a house with my then boyfriend, now fiance, and from the start we discussed "what happens if things don't work?" And we agreed going in that since we are both savers and not spenders, that it was important that we each be able to build savings as the expectation would be that one person buys the other out. We have a joint account that we each only put an agreed upon portion of our income into and it covers all the joint expenses, but otherwise, we maintain separate finances. Given that, I kinda wish I'd just bought the house myself and we'd just agreed on a set amount for him to pay me.

If he's unhappy with not feeling like paying half the expenses is fair, then ask him what he thinks WOULD be fair if he weren't buying in? What would fair market rent be for the house? Is that a number that you can live with?

If you guys are planning to maintain separate finances in all other areas, then it really doesn't make as much sense to combine this one thing, at least not given that you both know that if things went south that you would want to keep the house. If you knew that if the marriage didn't work then you'd be fine with selling and splitting the profits or whatever, then sure, it makes sense for him to buy in. But why would you share ownership of an asset that you know you want to be the one to keep if something doesn't work?

The alternative, is that if he wants to buy in now, then agree to do that on the condition that if things don't work out in the long run, he signs documents that outline exactly what happens to the house afterwards, how much he pays (you can probably find some sort of formula for this), what happens in terms of who inherits it, etc. So then, there's no question about all of those worries.

[Dahlia]

Thank you everyone! The comments were broad, and I think the process has brought me to lean towards selling a rental property to pay off the mortgage and keep it in my name.

But I think the underlying advice is to talk to Fiancé to find a solution we both accept. Not for me to have my preference without his input. So we'll have some more conversation. And maybe involve a counselor. And then a lawyer. I like the mindset to ask him what is fair.

I wanted to check with the forum to see if there were options I had not considered. And this discussion has given me peace of mind that I'm not ignorant of options as I evaluate this situation.