How to be objective regarding money in (second) marriage

[Interestingchanges]

Inspired by another thread on spending, I'd like to ask mns how they deal with the slightly trickier situation of being married second time round, with each having dc from former relationship.

Dh has 2 dc and I have 1, relatively similar ages, from resident (ds), 50:50 (dss) to regular contact (dsd).
Dh earns considerably more than me and contributes slightly more to common pot (own accounts), mostly though because he and his consume more (food, water, electricity, ...) then me and mine.

I think I wouldn't be asking if I hadn't made an error in judgement and bought a house with dh. We should have talked about the implications before but as we came upon a good opportunity we saw it as fate and jumped in!

As I used my savings and dh is paying back loan to (my) family member over very extended period, my present will sees ds as beneficiary, dh has however right to live there till he dies and house cannot be sold from under him (drawn up by solicitor who also cuts me out of any dh inheritance (which from gps will probably be considerable, which will go straight to his kids).

Please flame me if I'm being a selfish bitch, btw.

Dh has full knowledge of my finances, I have no secrets (and hes nosey) and always pay my half of things. But I feel he's being really petty by denying me insight into his finances, although its clear I don't want to take anything! I realize he got burned at divorce, but I can't help feeling insulted and marginalized. I looked after myself and ds as lone parent for years and am seriously great at budgeting/ saving etc.

I'd welcome any thoughts on this, particularly if experienced in the matter and somehow found right balance?
Many thanks

[missbopeep]

So you bought the home you now share outright? It was funded by your savings, and the money loaned by your sister? Presumably you don't have a mortgage at all- otherwise your DH would have had to declare his income at the time.

You have kept your flat- is it rented to tenants?

How did you come to decide with your sister how much your DH would repay each month for the loan? Did he not talk about this in terms of X% of his income- who came up with the figure?

The way it looks is as if your DH is paying the equivalent of rent for living with you- you and your close family have bought the house in effect, and as long as he is living there he pays something each month to your sister- which ties in with his 'room mate' comment. Meanwhile you have no idea what he has coming in or going out each month. How can you plan any savings, investments and longer term finances?

How do you know that he hasn't a lot of money but is keeping it quiet? To my mind it looks as if he is paying 'rent' for living with you and because it's a family arrangement ( the loan) he hasn't had to declare his income as he would with a bank loan. Does any of this show a lack of commitment to you? Just pay his way , and see how it goes kind of attitude?

[Twinklestein]

OP, it's good that your sister is mentioned in your will re the loan, but, sorry to be a bore, that's not the same as having a loan agreement.

If you already have one, ignore what I'm about to say.

A loan agreement is a legal document that formally sets down the terms, time frame, & interest rate, of informal loans.

It would outline what happens if the borrower defaults on a payment/s.

It can also provide an agreement that covers both parties in the event of all possible eventualities - however unpleasant or unlikely. What happen if you get divorced, either the lender or borrower dies etc

Is your s aware that if your h is paying interest, then she is liable for tax on the interest & must declare it to HMRC?

Without a legal document, your husband can stop repayments & you have nothing to prove that the money wasn't a gift. It help enormously that your sister's loan is recognised in your will, because that proves the fact of it legally, but even so it might be a fight to get the money back, if the unthinkable happened.

Apologies if you have this covered already.

[missbopeep]

Twinkle I am pretty sure that the OP said some time back that she is not in the UK- so HMRC etc not applicable- correct me if I'm wrong.

She also said that her Dh took out a loan from her sis as it was cheaper than via a bank- so I assume no interest is being paid.

But some points you make are worth the OP thinking about.
Being VERY cynical here - but the OP said her sister is disabled and has MS. It is possible perhaps that the sister could die before the loan is repaid- MS varies hugely so no idea of her prognosis. But it is just possible that the H is paying back a very small amount each month over many years and assuming that he will never actually have to repay the debt in full. meanwhile he is squirreling/ gambling/ investing large amounts of his earnings and living in a nice home having contributed very little to it financially. I don't know enough about how he would stand for a 50:50 share in it if they divorce. Sure he won't get the house if the OP dies first- but what would happen if they split up?

[Twinklestein]

@missbopeep As yes so she did. Does the sister live abroad too? They still need to check the tax regulations in their resident country...

It may be that they have agreed a lower rate of interest than banks charge, rather than none at all.

If the h isn't paying any interest then the sister is being diddled...

[missbopeep]

Do you think he is paying interest- honestly?
The arrangement seems to be based on the fact the the sister is disabled, doesn't need the money at the moment ......

If there was complete transparency and the OP knew his income he could pay back the sister as quickly as possible, but the impression given here is that he is paying back very small amounts over a very long period of time. What happens if he scarpers? Would he be pursued for the debt?

[Twinklestein]

I'm fondly hoping the sick sister isn't being done...

They can try to pursue him for the debt, but if he doesn't want to pay they may have to go to law.

But hey, they may have a formal document & he's not defaulted yet.

[missbopeep]

Yep, right.

I just have a really horrible feeling about this guy.....
OP you sound very honest and generous ( if you are still around, reading) but I hope he is not taking you for a ride, financially.

If he could afford say £1000 a month in repayments yet is actually only paying £20 ( as examples) then there is a very cynical reason behind that. As other people have said he is possibly hiding all sorts. eg is he still paying too much to his ex which leaves him short for this marriage? 3 kids at private school ( until recently) would in the Uk be £30K pa at least. Now that he isn't doing that, isn't it time to reassess his outgoings and the payment of the loan.

All such a muddle.

[zipzap]

Going back to the earlier thing, I think you are sensible to protect a chunk of your money as I hesitance for your dc. Somebody mentioned if all assets were combined and you had put more into the pot than your dh and then if you died first, dh got the pot, then when he died that pot was split between all the dc equally, his dc would get more than they would have done and your dc would have got less.

That's one possible outcome - but say he was an unscrupulous sort who after you had died then went and lost contact (deliberately or not) with your kids. If he were to die he could write his will to leave everything to his dc and nothing to your dc, which would be a horrible thought. And if he had remarried again too then it could be even more complicated and push your dc even further out of the picture.

When you do share the house with him, can you do the equivalent of tenants in common rather than being joint tenants? And put in details in your will exactly of the mechanism of how the inheritance of your share is to go? (voice of bitter experience).

He has an attitude that reminds me of someone I've had dealings with over family inherited stuff that when it comes to sorting it out 'what is mine is mine (and kept well away from the pot to be divided) and what is yours is ours' (and therefore should be in the pot to be divided; a win win situation for them and losses all around for my side of the family.

How well does he put away and keep hidden/password protected / under lock and key all his financial info should you go looking for it? And how does this compare with how you keep all your financial info?

The ore he keeps it away from you the more it sounds like he is doing so to keep something hidden from you. If circumstances have changed since he gave you the spreadsheet then definitely make him give you updated figures. And if your lawyer is good and you trust him and you dint have the loan agreement mentioned earlier, then could you say that when he changed your will he realised about the lack of protection for your Sis and get him to do one? Also is he paying at least enough intrest on the money to cover what she would get if she had it in a really good savings account? If not, that ought to be included otherwise your sis is losing out.

Sorry about the hotchpotch of ideas, should be Adler really! Hope they can be separated out and make sense!

[Wuldric]

With respect, I don't think you have protected your dsis totally. Protecting her totally would be not taking her money and giving it to your dh.

She might be protected in the event of your death, but what about default. I honestly think it is not very nice to take money from someone vulnerable and "loan" it to someone shady.

[nkf]

It is a bit of a mess. I can't believe that your sister has lent someone money on this basis. Not knowing what he earns, when he will pay back. And she does need that money.

I don't understand being with a man and not knowing what he earns.

Maybe he is dodgy. Hard to say, but the problem is you don't have key pieces of information. You don't know things you should know. How to find out? I honestly have no idea. But I do know that this level of vagueness and lack of information is not good.

[nkf]

He scrutinises your finances but his are secret. How can that be right? You need legal advice, I think. And financial advice. Do you have children together?

[newbiefrugalgal]

Is your husband able to have full rights to your home based on residence?
For example in oz, once you are cohabitating (less than a year) it becomes 50:50, could he claim more and your side miss out?
He is not bringing any financial properties to this relationship and you have two!

[FiftyShadesofGreyMatter]

"He scrutinises your finances but his are secret."

^ I think this is telling you all you need to know about your relationship!

[Monty27]

Me too fifty I'd be running for the hills.

[HenWithAttitude]

OP. hope you're still reading. Having everyone dissect your finances, marriage and decisions....make assumptions and then pronouncements ...can be daunting as you get drawn in trying to defend yourself rather than being able to mull things over.

FWIW I disagree with missbopeep about 2nd marriages requiring a complete sharing of finances. I think that probably works terrifically well for a beneficiary but less well for the donor. Bear in mind that 1/3 of these 2nd marriages will end in divorce, then chucking away your financial stability on a romantic plan can be risky for you and your DC (unless as I say you are the beneficiary)

I do think a completely open approach to finances is required and I think an agreement over your joint financial management including inheritance is extremely necessary. If you cannot have this open conversation then your marriage is not that secure.

Many couples have unequal financial footings later in life. I have my own house and work full time. Suppose I marry a man who isn't a home owner and on marriage he then owns 50% of a house I have worked full time for 26 years to pay for... On divorce I have to move my DC out to give his half to him? Stuff that. I might love him on marriage but I can promise you I didn't marry him planning to give him half of my life's financial work. I marry for love and sharing of life, not financial gain or loss.

I'm not suggesting marriage should be cohabiting as separate financial entities but I think the 'one pot' idea works in the now. I.e. day to day finances should be equitable, but larger assets should be discussed prior to marriage and if you cannot agree what a legal split should be, should you divorce, then perhaps you're not ready to marry.

However this is just shutting the stable door for you isn't it? For now: get independent financial advice and secure your financial future (and that of your sister). Work on the marriage but that does not mean you throwing your financial security away. One does not preclude the other.

[Interestingchanges]

Thank you for your replies.

Yes, it has been a bit daunting so I had to stop reading for a day or two.
But it has been so rewarding reading your contributions, and I think I know what must be done.

The general consensus seems to be that dh should pay back loan to dsis (with interest) asap, I agree, as then we could move forward, particularly re the inheritance issue of the house, the full disclosure of dh finances, and work as a team.

Yes, to the point that "what is mine is mine.... " Dh does have a tendency to be generous with my assets and yes, I feel a need to protect my ds interests. This came about when exw was completely demonized by dh and I got the crazy feeling there was nothing to stop her coming after my assets too!

Yes, I'm a naive idiot too trusting, but I've got a very independent nature and pride myself on my self sufficiency (lone parent for 8 years).

I'm going to have to reread some posts on the shared finances, but its difficult imagining how completely shared finances could work, the joint pot filled with an equal % from both parties sounds fair and doable.

And on a more personal note, I'm going to have to come to terms with the fact that I didn't marry Prince Charming, and I'm going to have to toughen up a bit and get on with my life and not walk on eggshells!

Thanks again everybody, I'm really touched at your thoughtfulness and willingness to share and helping me get back on track, xxx

[2rebecca]

I think leaving everything to your children and nothing to your spouse if you die is fine if you die young, but if you live to an old age there is likely to be nothing left to leave.
If for instance my husband dies tomorrow and leaves half our savings and all his pension benefits to his kids (I have to get the house and contents as it's in joint names) then they get money and my kids and I get none. If I live to be 94 it's unlikely there will be any money to leave my kids and I will have struggled financially when my husband dies.
Leaving something to your kids and something to your spouse seems a more sensible compromise.

[missbopeep]

Hen There's some sense in what you posted, but it doesn't just apply to 2nd or even 3rd marriages, and I wonder how you feel about inequality in 1st marriages? What about for instance marriages where one spouse earns considerably more than the other, where there are no children, and where the couple divorce? Someone I know was on the brink of divorce - they hadn't worked for years and years while their partner earned millions over that period. If they split up the non working partner would still get 50 % of the assets- this was discussed with the legal team.

I take your point about protecting your assets if you remarried, but it seems like the only way you could do that would be with a pre-nup agreement, because in law any spouse would be entitled to half, if you divorced.

[missbopeep]

2rebecca
Is that how pensions work though? I stand to receive 50% of DH's pension ( for life) once he dies. It's a good final salary pension. As far as I know our children are not entitled to any of it , even if we divorced and he remarried.

[Interestingchanges]

2rebecca, I agree on the sensible compromise idea.
Unfortunately, atm things are far from sensible, I've just booked an appointment with my solicitor for Friday to talk about legalities and consequences if house is listed in both names.
Dh and I have life assurance naming each other as beneficiaries should we die before 70, but otherwise dh has nothing to give me. I knew when I married him that all his assets stayed with exw (and as her parents are relatively wealthy, his dc are well taken care of anyway, regardless if he has anything to leave them).
My family was never wealthy but frugal and apart from the inheritance I also managed to pay off mortgage on own flat myself. Unless dh parents die very soon before spending their assets (god forbid), he has really nothing to share, except bis income (which he doesn't want to).

I've literally taken a leaf out of his book, I.e. his need, mounting to obsession, so see his kids get what they're entitled to, I.e. his money. My self sufficiency has really been used against me as he sees no reason, quite rightly, to support me financially in any way, or heaven forbid, my ds!
At the end of the day, all this fussing about finances etc is down to dh still acting like an entitled brat, and raising his kids to be the same.
I'm all about work and saving and ds has been talking about getting summer jobs since he was 13.
I did not see this coming. Must have been wearing bloody blinkers!

[missbopeep]

you only have his word that his ex got 'everything'- that would be very unlikely- it's usually 50-50, or thereabouts. who's to know he doesn't have a nest egg stashed away for emergencies? would you know?

He's painted her as money grabbing but that's only his side- which may suit him very well to spin that line to you.

Rebecca's idea on pensions- I could be wrong but I don't think an employee can pass company pension onto a child rather than a spouse, in the event of divorce.

People I know who have remarried, have always shared everything, although for day to day expenses some have put in a fair % of their salaries into a joint account, then kept the rest for themselves as spending money. However, on divorce (I know someone who is 3 x divorced) the house was split 50-50, and all the assets too. In that instance, one partner was left much worse off- they had bought the marital home for £400K+ and was left with just over half on divorce whilst the other partner had benefited as their own home ( pre marriage) was much smaller.

Good that you are taking legal advice.

[Interestingchanges]

Re assets from first marriage, they had a massive mortgage on luxury penthouse flat and exw decided to keep it and pay it off, so he got a small lump sum (she has moved back to a flat her mother owns to rent out mortgaged flat atm, will never sell it though as its in posh part of town she feels entitled to live in... Yes, they are both ego maniacs, but turns out she's tougher).
He did keep a v modest nest egg from her though which magically appeared when we had to pay for renovations (we always go 50/50 on all home improvements) and after all the suggestions in that direction I'm thinking that yes, he is probably doing the same with his secret finances right now.
God, its so laughable! The trouble is, even if I confront him and he actually tells me the truth, he will feel entitled to do this and keep the amount a secret too. Talk about man-child...
It's even more laughable though that I was actually going to offer dh all sorts of convenient ways to instate him as part owner and smooth his ruffled feathers, when it has become quite obvious that I'm only capable of seeing half the plot .

Ps I'm the (hopefully legal) guarantor for dsis loan as I wrote her a formal IOU, and have my old flat as collateral should dh skip the country...

[nkf]

This man is refusing to be transparent and open regarding his finances. With you. Please stop talking about what he has said about his ex wife. It is not necessarily true.

[missbopeep]

But you don't know what he has- do you?

The small nest egg she gave him ( why should she give him that?) and her buying him out of the penthouse- you simply don't know what he ended up with, because he won't tell you.

And neither do you have any real proof of whatever he was supposedly paying as maintenance, I assume. It's all based on what he told you- you haven't seen his accounts, I guess?

[2rebecca]

Both my husband and I get to decide ourselves who our pensions go to. I earn more than my husband so at the moment his children are beneficiaries of his pension if he died suddenly. My pension is larger and split between my husband and my kids. Kids can only be beneficiaries under my pension until they are 23, after that age it's spouse or civil partner only or "qualifying partner" whatever that is.