I am a remarried father of three boys and three girls; three of those children are from a previous marriage. My wife and I are looking to buy a house next year.
She recently told me that she is going to put it in her name only, as she is worried about my previous kids staking a claim on their portion of the house from my contribution. She said she is looking out for our three shared kids, but she is not considering my other three children.
When my wife’s father died he had other children, and an estate dispute ensued. I told her that we can establish conditions in our will to determine how the home is divided. I have reservations about jointly purchasing a home only to have my three kids cut out of any inheritance it may generate.
I understand that my wife wants to ensure our mutual kids are cared for. But if we are going to equally pay for the mortgage, my prior children deserve a part of that investment, right?
Loving Father Divided
Dear Loving Father,
Right. Don’t pay for a house if your name is not on the deed. Your wife may be fearful about her children’s future based on her own family history, as you say. But there shouldn’t be a winner and a loser in this scenario. Even if she did as she says, this house would most likely be treated as marital/community property, anyway. Bottom line: You are partners, as well as husband and wife.
“If you were to take a Joint with Rights of Survivorship, then it would not go through probate and, in theory one of you would have 100% ownership, if the other one was to die and could dispose of it as he/she saw fit,” said Victoria Wertz, principal of North Star Title Services in Marietta, Ga. With a will, she added, you could each leave your 50% to your own children.
‘If you were to take a Joint with Rights of Survivorship, then it would not go through probate and, in theory one of you would have 100% ownership.’
And if you wanted to divide the house up between all six children? “You could only leave your 50% interest as you don’t have any control over your wife’s interest, and how she chooses to disburse it.” Wertz added. This, she said, raises larger questions about estate planning and the division of other assets. “What about a life insurance policy? Retirement accounts upon both of them passing?”
That said, there are many ways to slice this cake. No. 1: Treat all six children equally, while taking account of any lump sum that you each contributed. No. 2: Slice the pie nine ways, and give your shared children two slices each, and give your own children one slice each. That seems like a meticulous, if slightly churlish, way of splitting this inheritance. Assuming there will be one.
Here is another option (No. 3) from a reader, who read your letter and my answer and said that he enjoyed the “thought experiment” of helping to solve your dilemma. “My first instinctive approach was that if we consider the argument that every parent owns half of the house, we should simply divide their respective parts among all children each of them has,” he wrote.
‘Slice the pie nine ways, and give your shared children two slices each, and give your own children one slice each.’
Your wife has 3 children, so her half goes to these 3 equally. You have 6 children, so your half goes to all 6 equally. As a result, the children get 1/6th + 1/12th = 1/4th each. Your children get 1/12th each. This reader noted that the discrepancy between what the children from the two groups get is smaller with my option, and wondered which answer was fairer.
In an ideal world, divide the house six ways and treat all six children the same. That would honor the “what’s yours is mine, and what’s mine is ours” marital agreement in spirit and practice. That is easier for you, of course, than your wife. But given your wife’s concerns, suggestion No. 2 or 3 may be the most realistic option. To the reader’s point, there comes a time when you listen to your instincts.
Like splitting a bill in a restaurant, there comes a time when you must balance your forensic accounting with what is palatable for those at the table. You can go too far with the slicing and dicing, but not with making an estate plan that explores all possible scenarios. Please do let me know what you finally agree upon. I am interested to know the outcome.
This letter was updated on March 20, 2021.
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