I am a retired 62 year old female. I was widowed in 2006 at the age of 46 and raised my two children (now 24 and 27) on my own. I used my husband’s life insurance money (about $500,000) to maintain our home, provide childcare, and get both kids to college without student loans.
I also invested some. I saved up my 401(k) at work and maxed out 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 (of which I receive 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 great man with many great qualities, although he was not very good at managing money. He was divorced – his wife left him and their 3 children, and he raised them alone. (They are all adults, ages 29 to 35.) He is 65, now retired, was an engineer and had a well-paying job.
I fully recognize that his financial position was different from mine – he never received child support from his ex, and in fact he had to pay her spousal support for 4 years while I had social security and insurance to help my finances. He saved some while he worked, but didn’t invest in his 401(k) for years. He has a pension about 2.5 times my own, and he starts collecting Social Security next month. He also has about $500,000 in retirement savings.
““My house is in custody for my children, and the prenup gives him a lifelong interest in the house, should I pass away sooner.””
When I married my husband, he sold his house, which was worth $100,000 more than mine, but he had no equity in it (because he had borrowed against it for home maintenance, cars, and college tuition). He had to bring money to close and repay the bank for the rest of the loan.
I lent him that money and loaned him $20,000 for painting, mold remediation, and floor repair that needed to be completed before he moved in. His first and second mortgage and living expenses swallowed up his entire income, and he lived on credit. He owed about $50,000 in credit cards and $40,000 for his third child’s college tuition (she also had a loan).
After we sold his house and we got married, he paid everything off. 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 prenup before we got married. My house is in custody for my children and the prenup gives him a lifelong interest in the house, should I pass him before. We split the cost of living. For the first 4 years of our marriage, that split included money for the mortgage (we paid about $550 a month each). The prenuptial agreement states that if I sell the house, I would owe him $550 for every month he paid half the mortgage; that’s about $25,000 in total. I like all that.
““He’s very handy and does a lot of minor repairs and maintenance himself, which I really appreciate.””
We’re still splitting the cost, but we’re no longer paying $550 a month once the mortgage is paid off. But we’ve done a lot on the house. Some are improvements we both wanted (e.g. replacing the worn, warped deck with a new bluestone patio) and others were necessary (e.g. removing the den ceiling due to leaking plumbing and repairing the ducts, replacing the ceiling and the floor).
I spend a fortune on the maintenance of my house. I realize that my second husband essentially lives in my house for free. He is very handy and does a lot of minor repairs and maintenance himself, which I really appreciate.
Any repairs and improvements will benefit me more than him because I will realize the increase in value of my home when I sell it. But I’m getting more and more annoyed that I’m covering so many large expenses and I wonder if there’s a fair way for him to pay some of these expenses.
I also realize that my net worth is greater than his. What is fair? Does he have to pay rent or other maintenance costs? Or should I suck it up and pay for anything home related and just appreciate the maintenance work he does for me?
What is your advice for a fair settlement?
Second wife in Virginia
Dear second wife,
Before I answer your question, let me congratulate you on getting this far. First as a wife, widow and single mother and again as a second wife, navigating and – for the most part – avoiding those treacherous financial pitfalls that prey upon millions of people every day.
You are also a wonderful example of playing the long game. You’ve invested, paid off your mortgage, sent your kids to school, and made a hefty nest to offset your more modest retirement. Not only did you survive, but you thrived. You led a good and, it seems, happy life.
This column is primarily about money, if you take the title literally, but if you don’t have peace of mind and take a second chance at happiness with a new relationship – like you did with your second husband – what’s it all for, how then? Money alone will not satisfy anyone.
Not only did you stay in the black, but you helped your second husband get out of debt, you gave him a stable family life, and you protected yourself with a pretty smart prenuptial agreement that also generously agrees to pay him back for contributions that he’s made on your mortgage when you sell. brava!
From romantic to semantic
And now I would like to go from the romantic to the semantic. Apologies in advance. You write that you hold a grudge because your husband doesn’t pay for one of the renovations, which I assume will run into thousands of dollars, but he will benefit from it for the rest of his life.
You say you’re mad because you pay for the renovations — not because he has refused to pay. You are essentially and objectively annoyed with yourself, rather than blaming your husband. (He could have paid half voluntarily. Rightly or wrongly, he believes his financial obligations to your home are complete.)
Your solution is a little less straightforward, so it will help to be honest with him. Tell him you didn’t expect the renovation to cost so much, and start by asking him what? he believes this would be a fair contribution. You can update your prenup to agree to repay capital improvements if you sell or split.
Keep in mind that you started these renovations without the understanding or intention that he would also pay for them. It might be reasonable to pay 50% of the most recent necessary renovations, but less than 50% for the more expensive bluestone patio.
A surprise from the 11th hour
However, he may agree to pay 50% of all such amounts. It’s just harder to ask him to pay you 50% retroactively, especially if you go back several years. He also has a steady income, but no one likes to be surprised with a bill at the 11th hour, and at such a late stage after the original expenses.
For that reason I would also advise against asking for rent. That seems too much like pulling a rug and – more than that – a stealthy way to cover costs that you didn’t ask or expect to pay him in the first place. You are now both retired.
It doesn’t have to be 50/50. It’s your house. You both have the advantage of living there all your life, assuming you stay married, and it goes to your kids in the end. He invests in your home as a place to live, but not as an asset to pass on to his own children.
You have conducted your financial and marital negotiations with consideration, openness, and respect. There is no reason why this should be any different. It will be easier for him to acquiesce if you don’t come to him with a rock-solid, inflexible proposition that a fait accompli.
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