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Sorting out finances when moving in together..

(22 Posts)
NewRags Wed 11-May-16 10:29:51

Ok so before I ramble on I need to point out that technically at the moment I am not a stepparent. My OH and I have been together for 5 years, we don't live together at the moment, we each own our own houses and my OH has one DC, I have none.

We are now getting to the point finally that we are thinking about either selling either just my house next year or both to buy a home together.

Just a bit of a back story - OH got divorced around 6/7 years ago and his ex wife has been in constant debt (not since the divorce btw she has always run up a lot of debt even when they were together), she doesn't earn a great deal but is on some form of tax credit, has disclosed to my OH that she "takes home" more than £1000 a month but still lives beyond her means by spending all the time. She moves house every year because she gets into debt with the LL. - She also inherited a massive sum of money and spent the entire lot in one year on clothes. parties, holidays etc- I'm well aware none of this is any of my business but it is relevant to the post.

So my OH owns his own business, he doesn't earn practically anything on paper but has a lot of assets which could be sold for a considerable sum if the occasion ever presented itself.

When my OH divorce was finalised he made a will leaving everything to his DC and they had a clean break order which meant she couldn't claim any money off him after the finances were sorted in the divorce - that's all been done and dusted btw.

Ok so onto the point of my post - I have this scenario going round and round in my head that if we were to buy a place together unmarried and something were to happen to my OH then his share would go to his DC - but if his DC is still under 18 would financial control automatically go to his DC mother (the exw)?
I am worried that if this should happen then I would either be forced to pay her my share of the house or she could somehow demand to live there or something like that?

I understand this is rather morbid, and as we haven't even got to that stage at the moment I might be jumping the gun but its something I would like to consider before making the leap and selling my own home for a joint one.

I know his DC should come before me I understand that but I'm worried that because of the debts that his exw keeps running up and is money hungry then in the event that something should happen to my OH then she would gain his share indirectly via their DC.

I have posed the question that my OH should leave the house to me but he doesn't want to do that as wants his DC to have a home left to him which is fine - but it makes me nervous to think I am making this commitment and could possibly be forced to sell it one day.

It also concerns me that as the business would be left to his DC then she could take control of it all if their DC is under 18 - I know this is out of my hands as its nothing to do with me having no share in the business etc but I hate the thought of everything OH has worked for to be pissed up against the wall as that's exactly what has happened with her previous inheritance.

So am I being overly paranoid or should I insist something is set in place (and if so then what?) before we make the decision to buy together?

JapanNextYear Wed 11-May-16 14:15:49

I think you might be overthinking this. Me and DH in similar circumstances, except kids older. Kept finances separate and made a will sorting out who got what.

You can draw up a legal agreement when buying a house so that you get your share back if you divorce and a will to sort out if one of you dies - so a trust or some sort of buy out from you of the rest of the house so the DC get their inheritance.

It's sensible to talk about this, but I think you are over thinking the ex wife part.

EmeraldEars Wed 11-May-16 14:19:40

I actually think you should be left his share and he set up and alternative way to provide for his child.

swingofthings Wed 11-May-16 16:45:19

He needs to redo his will (as you or need to make one if you haven't yet), and he needs to stipulate that any money going to his children are to go into a Trust and appoint someone (ideally two people) to be guardian of the Trust until the children are old enough to receive the money (18 or 21). The money could then only be accessed by this person (or agreement between the two appointees, so even better) and the children mother would have no say whatsoever on any of it. Your assets would be protected as stipulated in your wills.

HormonalHeap Wed 11-May-16 18:01:10

I have told my dh that there's no way if he goes before me that our home will go into trust. What if I wanted to move to be closer to my children, and step children said no? Would never put myself in that position.

Bananasinpyjamas1 Wed 11-May-16 19:57:04

Yes I do think that you or your. partner should be looked after first in finances, the home will be both of yours. In a first family it would be unthinkable that if one died the other would have to move or have their home taken away for the children.

Your husband could take out life insurance for his ex while the children are dependents, to cover maintenance.

Inheritance and wills, I'm sure a solicitor can advise.

NZmonkey Wed 11-May-16 20:26:57

I've just sold half my house to DH and it was a very stressful process because like you I thought about every possible eventuality. DSDs mum isn't even that bad but the idea of her owning half my house did my head in. Here is an even worse senerio for you what if his child has passed away when your DP finally dies and his child's next of kin inherits which would be the child's mum or possibly sibling from his mum.
What most people tend to go for is to buy together as tenants in common it means your share of the house goes to who ever you say it should in your will. If it doesn't go to your OH you usually put in your will a life tenancy/estate clause that means the OH can live in it till they die.
The other option is joint tenants that means when one of you die the other one inherits directly.
We have just brought as joint tenants as I basically wasn't willing to sell as tenants in common. Both out wills state once we are both dead DSD gets whole house. DH has life insurance so that DSD gets something straight away if he dies first.
Get some advise from a real lawyer before making any decisions about buying together just for your own peace of mind.
Hope some of this helps and that if you decide to buy together you find it a much easier process than I did.

Heavens2Betsy Wed 11-May-16 20:29:35

He's being unfair
If you buy a house together and he dies then you should inherit the house.
He should make provision for his dc in other ways.
His attitude would be ringing alarm bells to me though. Sure kids come first but he doesn't sound like he cares about your wellbeing very much.

Bananasinpyjamas1 Wed 11-May-16 22:52:13

I agree with Heavens - am in a kind of similar position and it really does make me feel that DP is not treating me like a partner at all. He's concerned about his kids inheritance before my wellbeing, as I will be homeless if he died.

I have some equity in a house, which I would have gladly put in to the house, 'our' house, a few years ago, as I thought that we were on the same page. Now I would not do this as effectively I'd be giving his children and, like you, his Ex my only money and home if he died. I have a small child with DP so this scenario doens't bear thinking about. This is all because DP has not put me in his will, only his children.

I think your DP needs to have some stark realities put in place here. If the situation were the other way around, would he feel as comfortable putting money into your home if you'd only named your child - and subsequently possibly your Ex, in your will?

NewRags Thu 12-May-16 09:14:13

Thanks all - I also think its unfair because if I were to die I would automatically leave my share of the house to OH as I have no children and it wouldn't be fair to leave to someone else in my family rather than OH.

But yes I think I will insist we go see a solicitor before buying because most of the money would come from me anyway as OH has no savings and if my house is the one to be sold then it would be me stumping up the deposit as OH wouldn't be able to afford to. I just don't want it to seem like I'm saying that because I've put more of the money in than he has, that its more my house than his (which yes technically it would be) but wouldn't want him to feel that way. Ultimately would need it written down legally so that if anything were to happen I wouldn't end up having to fork out 50% of the share when actually I own 70% or something like that etc.

Life insurance is a good idea - he doesn't have that but that's another thing I would insist he gets before we buy together.

Wdigin2this Thu 12-May-16 09:36:49

My advise is to be very careful of what you're doing here! If you sell your house and move into his, then put all the proceeds of yours into a watertight account which is accessible only to you and a nominated trustee, (not your OH, but a trusted friend or family member) in the event of your death, and write a will specifying what you want done with it!
If you sell both houses and buy one together, then get a legal document (will or similar) written up and lodged with your solicitor, specifying that should he die before you, the house is yours absolutely, but all insurances/death benefits would go to the DS, (in trust) and an agreed nominated sum, from your estate, also to go to him after your death....irrespective of what you go on to do! Obviously a pro rata arrangement should be set up in the event of you dying first!
Or a much easier solution....why not just get married?!!!

NewRags Thu 12-May-16 10:37:35

wdigin2this - yes that would be the easier solution to get married! OH is reluctant to do so though because he went through such a horrendous divorce so wants to make sure he doesn't make the same mistake again.

The situation whereby I move in with him will never come into it - his house is much smaller than mine so wouldn't make any sense - the only thing that would be possible would be to keep one of the houses and rent it out (this would more than likely be his house not mine, I don't want to be a landlord) and then buy another one together - that option may not even be feasible anyway but he's adamant he doesn't want to sell his house unless he absolutely has to - he wants to keep it and rent it so his DC can have a home when he turns 18. So most of the money would come from me.

If he has no choice but to sell then he wants his share of the new house left to his DC which from my point of view isn't particularly fair. I can totally understand he wants to leave his DC something after his days but why is it absolutely necessary that he gets left a house.

This is why even though I might be over thinking it right now - I need to have everything worked out in my head before we even contemplate looking at houses or getting mortgage advice etc, because if this is going to be a non budging point then I won't be buying a house with him.

Bananasinpyjamas1 Thu 12-May-16 12:49:41

He sounds a bit like my DP - he perhaps doesn't realise it but he is being very unfair to you. There is no reason why you shouldn't have 70/30 shares, with you able to have 70% equity to reflect this. That is fair. Your DP, like my DP, seems to carry on some guilt about his children by feeling like he has to set them up with everything. You are being generous to your relationship and to your step son.

If I were you I'd see a solicitor on your own first. Think about whether you really want to pool your resources, since you have more money, on your DP who isn't prepared to ensure that if he dies you inherit the house.

I was in your position, like I said, previously. I have more savings than my DP but would have pooled it 50/50 a few years ago. I'm now glad I didn't, as it is becoming clear that he is thinking of his kids only in inheritance terms, as soon as he dies. Whereas I was thinking of him and my children, a big difference.

HormonalHeap Thu 12-May-16 13:03:00

He's protecting his assets and dc's interest not yours. Fair enough at this stage, but 5/10 years down the line? I don't think so. There are so many different views, but mine is he should be putting you on an equal footing. You will have to see a skilled solicitor and look at the options.

I don't know, I think marriage makes a difference to the level of commitment some men feel. My dh felt no obligation to me before our marriage, but upon marriage made me an equal shareholder in his business (I did not request this) and splitting all assets equally between our children (none together).

In my view your dh should like mine have enough life insurance if possible for the kids to put down a hefty deposit so if he goes they have something. No that's not how it works in together families, but a step family is in no way like a together family because the same bonds often aren't there.

Tread very carefully and if necessary get legal advice of your own.

OutToGetYou Thu 12-May-16 14:24:21

OK, for now I have only read the OP. We were in this same position and you need to protect yourself.

I have quite a bit of insight into the situation as well because I did a law degree and a lot was focused around property rights and wills etc.

So, day to day finances - we each pay an amount into a joint account for sums we are both responsible for. This includes groceries and dp pays £100 more than me to cover dss portion. We also include some for 'long term savings' [I am a save-a-holic, dp just spends everything] which will end when it gets to £10k, and short term which is for holidays and stuff we want to do on the house.

We then each keep whatever is left of our own monthly income. We review this annually.

Dp gets a quarterly bonus from work and he puts 60% of this into the joint account and keeps [spends!] 40%.

Our circs were a bit different - dp pays child maints (even though dss now lives with us - go figure!) and he had zero assets from the divorce. He had a redundancy settlement worth a few x£10k.

So, when we bought the house my half was paid for by me. His half was part paid for and part mortgaged.

The mortgage, which is pretty low, is in both our names - it has to be because the house is. So, we faced the situation that should he die intestate his 'half' would go to his son, I would be responsible for the mortgage and so essentially his son would get some of MY money.
We are tenants in common with 50% shares - this means each of us can do as we wish with our half, importantly leave it to whoever we wish in our wills. If you are joint tenants the portion is always 50% and goes to the other joint tenant on death - which avoids paperwork but may not be what you want.

We solved this with the following:

1) a will - dp decided that actually the house would go to me, it's my home so that was what he wanted (I reciprocate in my will) - of course he can change this without me even knowing
2) insurance - dp took out life insurance to cover the cost of the mortgage AND any remaining maints for dss (who is now 15, obviously the remaining reduces over time)
3) he made ME, not the exw, the trustee for any money going to dss - he knows I am a) good with money, b) sensible, c) always fair and would have the best interests of dss at heart (exw cannot have the same said of her - she has already stolen £7k from dss bank account as well as having spent all of her settlement and is now asking for more so she can move house - she has no legal right to this but dp doesn't want any drama so is considering what he might do)
4) we have a deed of trust that says what will happen if we split up and sell the house - i.e. the mortgage gets paid first, THEN me, then dp repaid his deposit, then equity split 50/50. If this wasn't in writing it could be very tricky.

It is really important to me to protect myself. And I have no intention of marrying as we will not have children and I have way more assets (as well as half this house I have savings and decent pension pots). dp knows I would always look after dss, and I would, no matter what happens.

In terms of other assets - dp has named me and dss to have half each of any death in service he gets through work - can never rely on this as he obviously might change jobs. Your dp needs to have life insurance as he is self-employed.

dp has stated that dss gets the first £20k of any money (with me as trustee) and then we get 50/50 of the remainder - this is optimistic, dp doesn't have £20k! smile

I get everything in the joint accounts - this happens by law anyway, as joint bank accounts are assets like houses and you own them as joint tenants, so by law the money is mine when he dies anyway (and this is also why the long term savings will stop when it gets to £10k, I'm not trying to grab money from dp - but he is so bad at saving that it's just as well if I plan something. I'd probably end up giving it to dss anyway).

We also set aside £100pm from our joint money for dss into a JISA, which he cannot access until he is 18.

My will is fairly similar except my assets other than the house are split between dp and my niece and nephew, and there are bequests for my godson and a charity. If we both die dss gets the house as we have both left it to each other and to issue if the other is dead, dp to dss if I am dead. Seems fair enough to me. Neither want the other to have to move out if they die.

The key to all of this was to take good advice from a property solicitor and a lawyer who deals in wills.

The only thing we haven't got tied up is power of attorney which I want to do at least for myself so dp can make decisions (I am nc with most of my family).

OutToGetYou Thu 12-May-16 14:37:18

Having read your next post getting married would benefit him but not you!

He can still insist on the house being tenants in common and leave it to his dc. You, as a spouse, might have a claim against the estate, but it wouldn't be for all of it as his dc would have a claim too!

He, on the other hand, would come off very well if you died.

Someone said this:

Here is an even worse senerio for you what if his child has passed away when your DP finally dies and his child's next of kin inherits which would be the child's mum or possibly sibling from his mum.

I don't think that would happen.

If dp died intestate the estate would pass to his next of kin (spouse, followed by children, etc). If those people had pre deceased him, it goes to the dp next in line [siblings, parents of the dp] not the dc next in line, it skips the dc if they pre deceased.

If, however, the dp dies intestate, everything goes to dc. If dc then die intestate then, yes, it would [probably, assuming they not married, no dc of their own] go to their dm.

But, so what? Once dp has died and the money gone to dc, it is up to them to deal with it, if they don't make a will.....so what?

But, it just goes to show how important it is to make a will and all this financial stuff is much more complex for split families.

OutToGetYou Thu 12-May-16 14:40:07

Oh, by the way - we could have bought with no mortgage, using my house proceeds, plus some of my savings, plus dp contribution.

But dp wanted us to have 50/50 shares so insisted on the mortgage (for his part). He pays it, not me (though I arrange it and have made it as short as I can so it gets paid off quite quickly).

It annoys me that he pays interest when we could have avoided it, but I guess it means I get to do fun investing with my money instead of it being tied up in the house. And we now have a 2.4% mortgage and my investments are returning higher than that.

NewRags Thu 12-May-16 14:53:46

wow outtogetyou - you certainly seem to have it all in place which is great! smile yes he would be a lot better off if I died and then so would his DC.

Ultimately - he can leave absolutely everything (except the house) to his DC if he wants - that's not the worry, I just need to know that everything I am working and saving towards right now wont end up in someone else's pocket years in the future and me without a home.

Of course if we did end up having a child of our own then things would be different and I would insist he left half to that child aswell but right now I guess his loyalties lie with his DC and not me.

Life insurance definitely a must I think, but lots to think about before taking the plunge it would seem.

Heavens2Betsy Fri 13-May-16 11:53:15

he's adamant he doesn't want to sell his house unless he absolutely has to - he wants to keep it and rent it so his DC can have a home when he turns 18. So most of the money would come from me.
Oh dear. This says it all really
So you have to put all your assets into a joint home while he hangs onto his for his dc.
The words selfish and cocklodger are springing to mind here!!!

navylily Sat 14-May-16 17:58:06

There are two ways you can buy a house with someone - I think they're called something like "tenants in common" and "joint tenants", but I might have got those terms wrong. But one of them means that you jointly own the house, so if one of you dies the other automatically becomes the sole owner. The other way means that you each own 50% (or a different share if you want) and can each leave your share to whoever you please.

If you went for this latter option, your DP could also leave you what's called an "interest in possession" which would allow you to remain in the house for a period of time (that he can choose) sufficient to enable you to find somewhere else to live. Or this could be for the rest of your life if he wanted, but with his share still passing to his DC eventually. And likewise if you wanted to leave your share to him you could, or you could leave him an interest in possession giving him time to find somewhere else with your share going to someone else if you preferred.

I don't think his expectation that he should keep his house for his DC to have when they're 18 is reasonable, unless he has sufficient capital (or a mortgage) to enable him to pay his own way separately. What would he do if you weren't on the scene? He'd still need somewhere to live when the DC is 18 wouldn't he? So not fair that your home becomes the joint home and his becomes the DC's when they're only 18.

Thistly Tue 17-May-16 23:13:55

So he wants to keep his house so that dc can have it when they are 18.

But can't find it in himself to leave you his share of your joint house?

I don't get it. Why does dc need one and a half houses and you only need half a house when you could have one each?

Wdigin2this Wed 18-May-16 09:43:18

If your house is bigger (and presumably worth more) than his, he could move in with you, rent his house out and pay you exactly half of the household bills, apart from the mortgage....plus a nominal sum from the rental he receives, (after all, why should he get it all whilst living in yours, rent free).

You could then go on to get him to sign a legal document, waiving any rights to your property in the event of your death, after which your whole estate goes into trust for your DC.

Or if he's that nervous of committing to you, you could just stay exactly as you are...which I think would be my preferred option!

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