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Dear Quentin,
I have a situation that needs unbiased direction regarding inheritance, marital living arrangements, and aging in place.
My husband and I are both in our second marriages. We have been married seven years, so far. He has no children, I have adult children beginning their independent post-education lives. I am in my late 40’s and he is mid-50’s. When we married, we lived in Louisiana, my home state, a community-property state. There was no prenup.
Before our marriage, my husband spent his entire life savings to save a family property in Maine. His mother put herself into a financial bind, with a reverse mortgage on the property and hiding it from her children.
She spent all the money, and then could not afford to keep up the maintenance. My husband’s two siblings were either unable or unwilling to assist with the purchase of this property to keep it from going to the bank. My husband verbally agreed to allow his mother to continue living in the house as long as she paid the utilities and could safely live there alone.
For context, this property was appraised at $500,000 when refinanced just after our marriage before the cottage renovation. Last month, it appraised at $900,000 before renovations of the larger home.
We renovated my mother-in-law’s former property
After our marriage, my husband refinanced the property and we both renovated a one-bedroom cottage for rental purposes. I also purchased all the interior furnishings and home goods.
After the cottage was completely renovated, and booked solid throughout the rental season, my husband’s siblings began to question who would inherit the property, and called me a gold digger. Their concern was that the property might go to me should I outlive my husband, and then to my children. This began an emotionally painful discussion that has caused tension in our marriage.
At the same time as this discussion, my mother-in-law decided to move to an “efficiency apartment” with one level living, closer to civilization. My husband’s property is located in a rural coastal area.
I also inherited property from my late parents
Also, both of my parents passed away within a year of each other, leaving me my own undeveloped property in Tennessee and half of the rest of their estate. The other half went to my sibling. I retired from my 26-year career and now receive a generous state pension.
My husband and I agreed when we married that when the time came for me to retire, we would relocate to his mother’s former property in Maine that he purchased from her. His career allows him to live anywhere in the U.S.
He asked me to invest my inheritance in the renovations of his family’s property. He also said his last will and testament gives me life rights, with the option to sell and receive 50% of the proceeds and his siblings, and their heirs receiving the other 50%.
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‘He asked me to invest my inheritance in the renovations of his family’s property. He also said his last gives me life rights.’
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I did not feel comfortable with this as wills can be changed at any time, without my knowledge. I asked my husband to add a quitclaim deed or something more solid filed in court records that would give me more security should he pass before me. After settling a number of my own family estates, I’ve seen what can happen to a vulnerable person after losing their spouse or if they become incapacitated.
My husband had a conversation with his siblings, and stated we were going to make this our marital home. This triggered one sibling to become angry, and yell and cry. My husband decided he couldn’t change the deed and that I would just have to be satisfied with the current will.
If something happened to my husband, his family would throw me out on the street in a heartbeat.
I moved 1,800 miles in good faith
Due to this, I ended up purchasing my own house nearby using part of my inherited funds. I recently placed it on the market at $100,000 more than I paid, and there is a good bit of interest. My husband still insists we move to his property and wants me now to invest my inherited funds and the proceeds from the sale of my investment property to use to renovate his property.
We sold our marital home in Louisiana and used 100% of the proceeds to begin renovations on his separate property. I have no idea how much he earns until we file taxes each year. We have a joint checking and savings account, yet he doesn’t make deposits into that account, keeping his finances separate.
I’m tired of this argument. I’ve lost my parents, left my home, left my career, moved 1,800 miles in good faith. I want to put down roots with my husband in a safe and secure space. I want to make new memories with my children here, as well.
I made provisions for my husband to receive half my pension for life should he outlive me. Am I wrong in asking to be added to the deed so that I have a home? Should I sell my investment property and end our marriage and move on to somewhere else? I love my husband. He claims if I love him, I wouldn’t be asking for this deed change.
I feel I’m trying to make sure all loose ends are tied up for life-estate planning needs. I have no objection to him wanting to leave part of his estate to his siblings. I just want to make sure I’m not vulnerable and destitute should I be fortunate enough to live a long life.
Preparing for the Worst, Hoping for the Best
You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com, and follow Quentin Fottrell on Twitter.
Dear Preparing,
Your letter contains legal, financial and familial disconnects. The legal is the one that is easiest solved, and should provide the most clarity. If your husband purchased his mother’s home with marital funds — money earned during your marriage — this house becomes marital property. As it is, you used marital funds to improve it. One way or another, you own it jointly. On the financial front: don’t use your inheritance. And as for his family? Their irrational ire has nothing to do with you.
“It is possible for one spouse’s separate property, or the appreciation of that separate property, to become marital property,” according to Cordell Cordell, a domestic litigation firm. “The income from and appreciation of separate property during the marriage may be classified as marital property if the non-owning spouse proves that both spouses substantially contributed to its preservation and appreciation.”
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‘He wants you to invest your money and live in a home that has become a toxic dumping ground for all of his family’s grievances.’
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What’s more, investing some of your own money in this property would also result in commingling assets, if it were not marital property. “Commingling occurs when separate property is ‘inextricably mingled’ with marital property or with the separate property of the other spouse,” Cordell Cordell adds. “If separate property is treated as marital property, a presumption arises that there has been a gift of the separate property to the marital estate.”
A lawyer will advise you on any changes in the status of your mother-in-law’s former property — based on how it was acquired — should you invest some of your own money. Assuming that the property is not considered separate property under the law, trust your instincts and avoid pouring your own inheritance — which is separate property — into this house, particularly given its difficult history and sense of ownership your husband’s siblings have over it.
Your husband is being unreasonable at best, and opportunistic at worst. He likely incorrectly believes that his mother’s house belongs solely to him. He is falling into the same trap his siblings have fallen into: a sense of entitlement does not equate to actual ownership. Your husband wants you to invest your money and live in a home that has become a toxic dumping ground for all of his family’s grievances. His siblings missed their chance to buy this home.
That’s their problem, not yours.
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