“I spend a fortune on the upkeep of the house. I realize that my second husband basically lives in my house for free”: what is the fair way to distribute the costs?
I am a 62 year old retired woman. I was widowed in 2006 at the age of 46 and raised my two children alone (now 24 and 27). I used my husband’s life insurance money (about $500,000) to maintain our home, provide childcare, and allow the two children to go to college without a student loan.
I also made some investments. I saved through my 401(k) at work, at most every year. Now retired due to health issues, I have a small pension (about $24,000 a year), an investment account worth $2.5 million (from which I make about 2% a year for living expenses), a house worth about $400,000 and no debt.
I remarried 6 years ago. My husband is a wonderful man with many qualities, even if he is not good at money management. He was divorced – his wife left him and their 3 children, and he raised them alone. (They are all adults, between the ages of 29 and 35.) He is 65, now retired, was an engineer and had a well-paying job.
I fully acknowledge that his financial situation was different from mine – he never received child support from his ex and in fact had to pay child support for 4 years when I had social security and a insurance to help my finances. He saved some when he worked, but for many years didn’t invest in his 401(k). He has a pension that’s about 2.5 times the size of mine, and he starts collecting Social Security next month. He also has about $500,000 in retirement savings.
““My house is in trust for my children and the prenup gives him a life interest in the house, if I predecease him.””
When I married my husband, he sold his house, which was appraised at $100,000 more than mine, but had no equity (due to loans for house maintenance, cars and school fees). He had to take cash until closing, repaying the bank for the rest of the loan.
I loaned him that money and lent him $20,000 for painting, mold removal, and floor repairs that needed to be finished before he moved in. His first and second mortgages and living expenses took up all of his income, and he lived on credit. He owed about $50,000 on credit cards and $40,000 for college tuition for his third child (she also had a loan).
After we sold his house and got married, he paid for everything. He paid me back everything he borrowed, paid off his credit cards, and paid off the student loan (which he finally paid off in full this year).
We signed a marriage contract before we got married. My house is in trust for my children and the prenup gives him a life interest in the house, should I predecease him. We share living expenses. For the first 4 years of our marriage, this breakdown included money for the mortgage (we paid about $550 a month each). The prenup says if I sell the house, I’ll owe him $550 for every month he paid half the mortgage; it’s about $25,000 in total. I’m fine with all of that.
““He is very handy and does a lot of small repairs and maintenance himself, which I really appreciate.””
We still share the expenses, but we no longer pay $550 a month when the mortgage is paid off. However, we have made many improvements to the house. Some are upgrades we both wanted (eg replacing the worn and warped deck with a new bluestone patio) and some were necessities (eg removing the den ceiling due to leaks from ducts and repair ducts, replace ceiling and floor).
I spend a fortune on the upkeep of the house. I realize that my second husband basically lives in my house for free. He is very handy and does a lot of small repairs and maintenance himself, which I really appreciate.
All repairs and improvements benefit me more than they benefit him, because I will realize the increased value of my house when I sell it. But I’m growing resentful of covering so many big expenses and wondering if there’s a fair way for him to pay some of those costs.
I also realize that my net worth is greater than his. What is fair? Should he pay rent or other costs associated with maintenance? Or should I suck it up and pay for everything around the house and just appreciate the maintenance work it does for me?
What are your tips for a fair settlement?
Thank you so much.
Second wife in Virginia
Dear Second Wife,
Before answering your question, I would like to congratulate you on having come this far. First as a wife, widow and single mother, then as a second wife, navigating and – for the most part – avoiding those treacherous financial traps that millions of people fall prey to every day.
You are also a wonderful example of a long game. You’ve invested, paid off your mortgage, sent your kids to college, and have a big nest egg to help offset your smaller pension. Not only did you survive, but you thrived. You have led a good and, it seems, happy life.
This column is about money, mostly, if you take the title at face value, but don’t have peace of mind and try a second chance at happiness with a new relationship – like you did with your second husband – what’s the point, anyway? Money alone will not satisfy anyone.
Not only did you stay in the dark, but you helped your second husband get out of debt, provided him with a stable family life, and protected yourself with a pretty smart prenup that also generously agrees to pay back the contributions he gets. it brought to your mortgage if you sell. Cheer !
From romantic to semantic
And now I would like to move from the romantic to the semantic. Apologies in advance. You write that he feels resentment because your husband is not paying for any of the renovations, which I imagine run into the thousands of dollars, but he will benefit from them for the rest of his life.
You say you hold a grudge because you pay for renovations — not because he refused to pay. You are essentially and objectively bored with yourself, rather than blaming your husband. (He could have volunteered to pay half. Rightly or wrongly, he thinks his financial obligations to your house have been met.)
Your solution is slightly less straightforward, so it will help to be honest with him. Tell her you didn’t expect the renovations to cost so much and start by asking her what he thinks that would be a fair contribution. You can update your prenup to agree to pay off capital improvements in the event of a sale or split.
Consider the fact that you went into these renovations without understanding or intending that he would pay for them as well. It might be fair to pay 50% for the most recent essential renovations, but less than 50% for the more expensive bluestone patio.
An 11th hour surprise
However, he may very well agree to pay 50% of all of them. It’s just harder to ask him to pay you 50% retroactively, especially if you go back several years. He also has a fixed income, but nobody likes to be surprised by a bill at the 11th hour, and at such a late stage after the initial expense.
For this reason, I would also advise against asking him to pay rent. It’s too much like a coin toss and – more than that – a secret way to cover expenses you didn’t ask him or expect him to pay in the first place. You’re both retired now, after all.
It doesn’t have to be 50/50. It’s your house. You both have the benefit of living there all your life, assuming you stay married, and it will eventually go to your children. He invests in your home as a place to live, but not as an asset that he can pass on to his own children.
You conducted your financial and marital negotiations with consideration, openness and respect. There’s no reason for it to be any different. It will be easier for him to agree if you don’t present him with an ironclad, inflexible and fait accompli.
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