I am a 62 year old retired woman. I was widowed in 2006 at the age of 46 and raised my two children (now 24 and 27) on my own. I used the money from my husband’s life insurance (about $500,000) to maintain our home, provide childcare, and put both kids through college without student loans.
I also made some investments. I saved through my 401(k) at work, maxing out each year. I am now retired due to some health issues, have a small pension (about $24,000 a year), an investment account valued at $2.5 million (from which I withdraw about 2% per year for maintenance), a home valued at about $400,000, and no debt .
I remarried 6 years ago. My husband is a wonderful man with many great qualities, although he is not good at money management. He was divorced – his wife left him and their 3 children and he raised them alone. (All are adults, ages 29 to 35.) He is 65 years old, now retired, and was an engineer and had a well-paying job.
I fully realize that his financial situation was different than mine – he never received child support from his ex and actually had to pay her spousal support for 4 years while I had social security and insurance to help your finances. He saved a little when he worked, but for many years he didn’t invest in his 401(k). He has a pension that is about 2.5 times mine and he starts getting Social Security next month. He also has about $500,000 in retirement savings.
““My home is in trust for my children and the prenup gives him a life interest in the house if I leave him before his death.”“
When I married my husband, he sold his house, which was valued at $100,000 more than mine, but he had no equity in it (due to loans against it for home maintenance, cars, and college tuition). He had to take money to closing by paying the bank the balance of the loan.
I loaned him that money and loaned him $20,000 for painting, mold removal, and refinishing the flooring that needed to be completed before he moved in. His first and second mortgages and living expenses ate up all of his income and he was living on credit. He owed about $50,000 on credit cards and $40,000 on his third child’s college expenses (she also had a loan).
After we sold his house and got married, he paid it all off. He paid back everything he had borrowed, paid off his credit cards, and paid off his student loan (which he finally paid off in full this year).
We signed a prenuptial agreement before we got married. My home is in trust for my children and the prenup gives him a lifetime interest in the house if I leave him before his death. We split living expenses. For the first 4 years of our marriage, this split included money for the mortgage (we paid about $550 a month each). The prenuptial agreement stated that if I sold the house, I would owe him $550 for each month he paid half the mortgage; that’s about $25,000 total I’m fine with all of that.
““He is very handy and does a lot of minor repairs and maintenance himself, which I really appreciate.”“
We still split the costs, but no longer pay $550 a month since the mortgage is paid off. However, we have made many improvements to the house. Some are improvements we both wanted (eg replacing the worn, warped deck with a new bluestone patio) and others were necessary (eg removing the living room ceiling due to leaking pipes and repairing the ducts, replacing the ceiling and the floor).
I spend a fortune on home maintenance. 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.
Any repairs and improvements benefit me more than him as I will realize the increased value of my home when I sell it. But I am increasingly resentful of covering so many large expenses and wonder if there is a fair way for him to pay some of those expenses.
I also realize that my net worth is greater than his. What is fair? Does it have to pay rent or other maintenance costs? Or should I suck it up and pay for everything related to the house and just appreciate the maintenance work he does for me?
What is your advice for a fair settlement?
Thank you so much.
Second wife in Virginia
Dear Second Wife,
Before I answer your question, I want to congratulate you for making it 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 traps that millions of people fall prey to every day.
You are also a wonderful example of playing the long game. You’ve invested, paid off your mortgage, put your kids through college, and have a substantial amount to help offset your more modest retirement. You not only survived, you thrived. You have led a good and apparently happy life.
This column is about money, first of all, 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 – as you did with your second husband – what is it all for, anyway? Money alone will not make anyone happy.
Not only did you stay in the black, but you helped your second husband out of debt, provided him with a stable home life, and protected yourself with a pretty smart prenuptial agreement that also generously agreed to pay him back the payments he made toward your mortgage if you sell. Well done!
From the romantic to the semantic
And now I would like to move from the romantic to the semantic. Apologies in advance. You write that you feel offended because your husband isn’t paying for any of the repairs, which I assume add up to thousands of dollars, yet he will benefit from them for the rest of his life.
You say you are resentful because you they pay for the repairs – not because he has refused to pay. You are essentially and objectively annoyed with yourself instead of blaming your husband. (He could have volunteered to pay half. Rightly or wrongly, he believes his financial obligations to your house are complete.)
Your solution is a little less simple, so it helps to be honest with it. Tell him that you didn’t expect the repair to cost so much and start by asking him what he believes it would be a fair contribution. You could update your prenuptial agreement to agree to recover capital improvements if you sell or separate.
Keep in mind that you undertook these repairs without the understanding or intention that he would pay for them. It might be fair to pay 50% of the most recent major renovations, but less than 50% for the more expensive bluestone patio.
An 11th hour surprise
However, he may agree to pay 50% of all of them. It’s just harder to ask him to pay you 50% retroactively, especially if you’re going back a few years. He also has a fixed income, but no one likes to be surprised with a bill at the 11th hour, and so late after the initial expense.
For this reason, I would advise you not to ask him to pay rent. This seems too much like pulling the rug and – more than that – a sneaky way to cover expenses you didn’t ask or expect him to pay in the first place. After all, you are both retired.
It doesn’t have to be 50/50. This is your house. You both have the benefit of living there for the rest of your lives, 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 he can pass on to his own children.
You conducted your financial and marital negotiations with care, openness and respect. There’s no reason this should be any different. It will be easier for him to agree if you do not come to him with an iron, inflexible proposal that is fait accompli.
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