Pros and Cons of Putting House in Trust

[Anonymous]

Stepmom from hell mysteriously doesn't answer the question was he married when you started dating him. I think we all know the answer.

[Anonymous]

Anonymous wrote:DH and I will be buying a home soon but I will be putting down the down payment and paying the mortgage for the foreseeable future as DH cannot afford to contribute. He has two children from a previous marriage will need to pay child support for at least 10 more years. We also have two children together. I would like this house to go to our children together when we die. Spoke to a lawyer who suggested that I put the house only in my name or put it in a trust. What are the pros and cons of putting it in a trust? He explained that when I want to refinance, I'd need to pay to take it out of the trust temporarily and put back in.

Before people bash me for not wanting to also provide for my stepchildren, I am fine dividing our joint accounts and any future assets equally among all children, but since this home will be purchased using funds ($200k) I had before we were married, and I will be paying for the mortgage, I would like it to go to our children together.

Hi OP, I am in a similar situation - my SO is a teacher and makes less than half of what I do. He pays CS for his kids. I have my own two kids. But I'm also kid "from the first marriage" as both my parents remarried and had subsequent children.

I don't think you should approach the house issue this way. You married him and (presumably) have accepted his children as part of your family. You may not see them as equal to your children -- which is completely understandable -- but you should treat the children as equals. They all came from the wonderful man that you married. You could be hit by a bus the day you close on your new house and your husband would still be responsible for all four kids. The question you really should be asking is, "What can I do to make sure he is able to live comfortably in the event of my death." If he's not a high earner and you don't have a lot of liquid assets for him to conduct his life after you die -- he'll probably sell that house, move into something smaller, and use the remaining cash to fund life. So, if I were you, I would just leave most of your assets to him (including the house) with a set-aside for your children's education.

The bigger issue is the off-chance that you both die at the same time. The better approach than 'my money to my kids' is that your children are younger and will logically need more funds as his children will reach the age of self-sufficiency earlier. So come up with a formula to divided the assets based on their ages.

Also, you'll want to make sure that whatever proceeds go to his kids are controlled by someone you both trust and can't be obtained by your husband's ex.

Bottom line: Don't make this about you and your money. Frame it so that it's about making sure ALL the children in your life are taken care of appropriately. Appropriately doesn't necessarily mean equally.

[Anonymous]

OP I'm the adult child - this is a great idea, I wish my parents would have done this. My older step siblings were in high school when my parents married. My mom and dad paid for their college and bought them condos from their common funds so they won't have to have mortgages. Now, 30 years later, they told my parents they also expect 1/2 of the house that my parents bought with my mom's money. There's no stop to the greed and entitlement.

[Anonymous]

Thank you above poster for introducing the OP to how to stepparent appropriately.

[Anonymous]

OP here - we have only been married 4 years so we have very young children.

The reality is that my stepchildren have two parents that are to provide for them and my kids have two parents to provide for them. Stepkids will also receive support and inheritance from their mother and mother's side of the family.

My other option could have been to put my $200k in a fund for our kids and start from scratch saving for a house together but purchasing a home with the funds is a better investment. And if I were to die first then of course I would want my husband to have the house and funds but the reality is we have two young kids that will need support and would not get it from anyone else, unlike stepkids. As I mentioned before, other assets could and should be divided equally.

[Anonymous]

This sounds perfectly reasonable. I can't believe you're getting flamed for it.

[Anonymous]

Anonymous wrote:I hope he designates his current assets and life insurance solely to his "previous" kids should he die, in that case- you know- to be fair. Since they were entitled to it before your "new kids" came on the scene. When he does first your kids (and you) should not get a dime of it based on the way you think.

People like you make me sick.

The children that he has now with OP are also his biological children. His children from his previous relationship are not OP's biological children. False comparison.

[Anonymous]

Anonymous wrote:OP here - we have only been married 4 years so we have very young children.

The reality is that my stepchildren have two parents that are to provide for them and my kids have two parents to provide for them. Stepkids will also receive support and inheritance from their mother and mother's side of the family.

My other option could have been to put my $200k in a fund for our kids and start from scratch saving for a house together but purchasing a home with the funds is a better investment. And if I were to die first then of course I would want my husband to have the house and funds but the reality is we have two young kids that will need support and would not get it from anyone else, unlike stepkids. As I mentioned before, other assets could and should be divided equally.

I really hope someone answers your question from a financial standpoint, OP.

I'm a single mom and my XH is a bit of a nightmare----I'm talking calls to the police and a CPS investigation, not he talks with his mouth full. I have also been given the advice to put the house in a Trust. The children, like yours, are very young and I NEED to make sure that they'll have something when I'm gone. As I've been counseled, it's not a sure thing to simply leave it in your Will to the children (and of course you wouldn't want to put them on the deed or anything like that). I've wondered about refinancing ahead of time and locking it all in and just forgetting about it.

Please, finance super stars, respond to OP's question so that we can all benefit from understanding the tax implications and possible obstacles in the future.

[Anonymous]

Anonymous wrote:This sounds perfectly reasonable. I can't believe you're getting flamed for it.

If she had stated upfront that her SC are to be provided for and she just wants to make sure hers are as well, I believe the tone would have been different in the responses.

When talking about mothers of sons leaving their jewelry (in another thread from a few weeks ago), people were savvy, sensitive, creative, and understanding.

Like you, I don't see why that wouldn't be the case here. Leaving children 50% of everything is an Estate nightmare, if you have items of significant worth. They should be parceled out with care, balancing the value (sure, why not) but making distinctions among one's stuff is damn helpful after you're gone----otherwise, everything has to be sold or bartered among the beneficiaries (paintings, carpets, dishware, etc.)

[Anonymous]

Is your husband cool with this? Because I can't imagine how that conversation would go :/

[Anonymous]

Anonymous wrote:

Anonymous wrote:This sounds perfectly reasonable. I can't believe you're getting flamed for it.

If she had stated upfront that her SC are to be provided for and she just wants to make sure hers are as well, I believe the tone would have been different in the responses.

When talking about mothers of sons leaving their jewelry (in another thread from a few weeks ago), people were savvy, sensitive, creative, and understanding.

Like you, I don't see why that wouldn't be the case here. Leaving children 50% of everything is an Estate nightmare, if you have items of significant worth. They should be parceled out with care, balancing the value (sure, why not) but making distinctions among one's stuff is damn helpful after you're gone----otherwise, everything has to be sold or bartered among the beneficiaries (paintings, carpets, dishware, etc.)

For the record, in my original post I stated the following and still got flamed:

Before people bash me for not wanting to also provide for my stepchildren, I am fine dividing our joint accounts and any future assets equally among all children, but since this home will be purchased using funds ($200k) I had before we were married, and I will be paying for the mortgage, I would like it to go to our children together.

[Anonymous]

OP: your questions and goals are 100% legitimate. Just happens that a few pps with their own step issues got involved.

[Anonymous]

You and your husband sound like quite the team. not.

[Anonymous]

OP, I understand rationalizing and am on your side and would use a trust.

Side note, this is why my Dad promised my Mom that he would never have more kids after thier divorce. And he never did.
My Mom is stingy as hell when it came down to dividing the property and making sure her kids would get their entitled share of future assets.

Yup, the Holiday season is in full effect.

Anonymous wrote:You and your husband sound like quite the team. not.

[Anonymous]

It is ridiculous that OP is being flamed. I'm a wills & trusts attorney, and this is a common and legitimate concern in blended families. OP - talk to a T&E attorney and ask about a QTIP trust, which you could then place your house into. This kind of trust allows your husband to access and manage the trust assets after you die (and thus would be used for the support your children and SC, i.e., everyone could live in the house), but when your husband dies, the assets in the trust would go to your children.