Should Adult SD pay rent on DH's inherited property?
The couple who raised my DH have both passed in the last 3 years and my DH recently inherited their small home and farmette. SD24 and her 26 year old fiancee moved into the house a month later. DH and I do not see eye to eye on SD and her fiancee paying rent.
Both of these young adults bring home a combined income of around $90,000 a year. The fiancee drives around in a $50,000 truck, SD24 just bought a new car.
My DH and I have argued non stop over this. Finally he told her she needed to pay a pathetic $400 a month. She has paid twice now and my DH now says he just doesn't feel right cashing her check.
My feelings are life is not a free ride and what are you teaching her. He has the mentality that if you can help your kids you should. These two young adults do not need help! If she was a single young Mom struggling then I could understand.
He then suggested they pay atleast enough to cover taxes and insurance which would equal to around $100 a month which I think is absurd.
Maybe I'm in the wrong, the property is souly in my DH's name, so maybe this is none of my business.
We've been together 16 years now and I've always felt his two daughters were entitled brats. We've always kept our money separate for this exact reason. Up until 2 years ago my DH was carrying this same adult daughter on his car insurance policy and paying for her to have 2 vehicles on this policy all the while I was on my own separate policy. That has since changed but just an example of the ridiculousness of it all.
Yes, I know, this is a major husband problem and it's taken a toll on our marriage and my feelings toward him.
Would you guys be responsible
Would you guys be responsible for repairs, like a roof or emergency plumbing? I can see both sides but at the very least, I would say rent should cover cost for insurance and taxes and establish a reserves fund for when major repairs are due
It’s not free, it’s worth whatever the market value is
My SD reasoned that since he received free phone and laptop upgrades from work, DH should give his spare ones to her because he got them for free. And I nipped that right in the bud. They're not free, they're worth whatever the going rate is. By giving her a "free" phone we would deprive ourselves of whatever a random would've paid on ebay. In the case of a phone that's a $600 difference.
What is the going rate for rent for a property like yours? By letting SD stay rent free or reduced rent, you're depriving yourselves of hundreds of dollars every month. Let's say normally a property like that brings in $1400 per month. If she's only paying $400 then you're losing $1000 every month. Imagine if you guys did put that property up for rent. Would your DH think it reasonable to hand over thousands every year from his rental income to SD just because? It's essentially what's happening now.
OP, just think how much more
OP, just think how much more comfortable your retirement could be if you invested the rent from a place like that rather than throwing the potential away on SD and her bf. Think of the holidays and trips you could have with it. Just food for thought. In the end it's your DH's property to do with as he chooses, but maybe he hasn't considered all the possibilities.
It's DH's property, so I'd
It's DH's property, so I'd say let him decide. But make sure your money ain't going towards upkeep.
It depends on how deeply
It depends on how deeply entwined finances are in the marriage. I view money as "our money" that funds "our lifestyle". And I would lose it if we gave up our holidays so my SD could get a free ride. But I know in some marriages, especially second marriages keeping seperate accounts is the only way to have some peace.
Yep, that's what I was
Yep, that's what I was getting at.
Also, vacations and retirement get funded ahead of money going to SD. He needs to pay his share of that, too. If he's wealthy enough to do all of it, then fine.
OP, even if you and DH have
OP, even if you and DH have separate funds, you don't have separate finances. Being legally married, his debt is your debt most likely. How funded is his retirement? Does he have the ability to pay for his half of renovations on your mutual home if it's needed? If his inherited home needs a new roof, will he have to skip a vacation with you in order to pay for it, or put himself into debt that you'd be responsible for if he became incapacitated before it was paid off?
Separate funds mean you don't get to tell him he can't grab Starbucks on his way to work, but this house is both an asset and liability that can impact your collective financial health. Perhaps the compromise here is that he collects rent and puts it into a savings account. If the house needs a new roof, he pays for it out of that account. If he never has to make a repair on the home, he can give SD the money back at the end as a down payment on a new home, etc. All because he cashes the check doesn't mean he has to spend the money, and even if he spent her money to fix the roof, she and her FH are still getting a steal for a house.
I say all of this assuming your DH has the funds to offer this home to SD without needing her money. If he is loaded down with debt, can't pay his portion of the bills, etc then he needs to find a better way to use that house as an asset. It's unfair to your mutual financial future if he is already in the red and goes even further in the red to "help" his capable adult daughter. It's a hill I would die on.
tax and legal consequences?
I have no idea what the current fair market rent is on the house DH is letting them use rent free. But, in many areas the amount of rent would trigger the need for DH to file a gift tax form with his taxes. The alternative could be that the IRS would consider the fair market rental amount as income to SD.
Does DH have landlord type insurance? If something happens and he gets sued (and he would as he is the legal owner), is he legally protected?
Im the OP and my H has money
Im the OP and my H has money that was left to him from this couple, not a ton but enough for the upkeep on this property, taxes and insurance. He uses that account to pay for anything there. He also part-time farms this small farmette and any money he makes selling hay, corn or soybeans goes back into that account. My DH is not a spender and very good with finances. I guess maybe I need to pick my battles. The whole thing just irks me. If the situation was flipped I would absolutely expect my bio's to pay rent. They are all adults now. The going rate for this house would probably be in the $1200 a month range. I think my many years of ill feelings toward this SD in particular and all the bull crap from her just fuels my anger even more.
Im the OP and my H has money
Im the OP and my H has money that was left to him from this couple, not a ton but enough for the upkeep on this property, taxes and insurance. He uses that account to pay for anything there. He also part-time farms this small farmette and any money he makes selling hay, corn or soybeans goes back into that account. My DH is not a spender and very good with finances. I guess maybe I need to pick my battles. The whole thing just irks me. If the situation was flipped I would absolutely expect my bio's to pay rent. They are all adults now. The going rate for this house would probably be in the $1200 a month range. I think my many years of ill feelings toward this SD in particular and all the bull crap from her just fuels my anger even more.
Funding SD and her Fiance
SO, my mother did this for us because she wanted us to buy the house from her. And figured we could save up to do so within a certain amount of time. She charged us $800/month to cover taxes and insurance. The going rate in our area for something comparable was $1,800 (its has gone up since then).
So, if your husband is trying to help them buy the house or save up for the wedding thats one thing. If its so they have money to buy new stuff and go on vacations and do things, thats another. Isnt this the SD that you helped raise, had a falling out, are shunned by, and loathe?
You really need to look at the big picture. Does he have a will and are you taken care of? What is the end game of coddling SD and giving her free ride? Does your husband have a healthy retirement plan in place?
So, I take it that FIL did NOT gift the SD that property down the street? Maybe your husband is feeling guilty about that?
Yes, the land is still being
Yes, the land is still being given to SD to be built on. Still waiting on some issues with water and sewer. It wasn't technically "gifted" in the will but my DH will still give it to her as that's what my FIL had promised her. It's 2 acres.
I'm embarrassed to say we do not have a will. I know we need one. Why haven't I you ask, becuase I'm scared of him screwing me over his kids. I know that sounds awful. So I have proscrasinated. I could be judging his response to a will incorrectly, we've not had that conversation but have both agreed we need one. We do not have kids together but have built a life together. He is the bread winner between the two of us.
Healthy retirement plan, not really. It exists but it's not healthy. He worked for himself until about 4 years ago so he has always been a saver of cash and hides it all over the house which I know is stupid. House burns down, cash is gone. With his job now he has a retirement plan and then he also has a small IRA. He will work unitl the day he dies or can no longer physcially. He is the hardest working man I know and loves to work. Workaholic honestly.
I just wish I could mentally let this situation go and have peace about it. I think it's not even about the rent, I think it's all the underlying issues with these skids all these years and my DH never dealing with them or having boundaries to protect me and our marriage.
I suggest you talk to a
I suggest you talk to a divorce attorney, just to find out where you stand and what you'd be entitled to in the event of a divorce. This will give you solid info, and you can then open a dialogue with your H about making wills.
Knowledge = power. And if you don't look out for you, who will? I'd also go on an Easter egg hunt, ferret out that stashed money, and put it in a safe place.
It sounds like it is time to
It sounds like it is time to get serious about retirement and estate planning. Especially as his financial situation has recently changed with this inheritance. Remind him that as much as he may want to work until he drops, that not everyone's health allows that to happen.
If you know that your future is secure (or have a relaistic plan to make sure it is) then you will feel better about him giving his kids rent free use of his property. Alternatively if he is shown that he will struggle in later life and leave you (and his kids) with little to nothing, he may be persuaded that he should be charging his daughter at least some rent, even if it is not full market rate, so that he can help to meet financial goals.
And maybe buy him a fire/flood proof safe for his money hidden around this house if you can't persuade him to deposit it in a bank?
Over the years we've had many
Over the years we've had many stories from stepparents who "rented" to skids, and got screwed six ways to Sunday for doing so. I would never, EVER rent to family.
If your finances are comingled, your H is squandering an asset. Which is fine if you're wealthy and have fully funded retirement accounts AND it's a joint decision. What you need is a neutral third party - financial advisor, counselor etc - who can mediate this. I'd also consider separating finances.
The argument that you and
The argument that you and your DH are having is the same one that my SS's SpermGrandHag and SpermGrandPa have been having for three decades over their idiot son (SS's SpermIdiot).
SpermGrandPa has wanted to cut their POS son for ever. SpermGrandHag has been subsidizing him for his entire life. He is 51yo. In the early years as long as his breeding partner of the moment was knocked up or living with him with their young child(ren) SpermGrandHag allowed the SpermIdiot et al to live in one of their rental properties rent free. As soon as he would break up with the baby mama of the moment, SpermGrandHag would kick him out of her rental property.
Finally SpermGrandPa moved into a small apartment in their garrage and left his Hag wife to live alone in their house. He works on his cars all day and pretty much has nothing to do with his Hag wife or their indiot children or any of the grandchildren except for my SS's younger half sister (#2 of the spermidiot's 4 all out of wedlock spawn by three baby mamas).
IMHO... your Skids pay rent or ... they are out. That should be a performing marital asset for you marriage and not a haven for entitled failed family progeny. Not only should they pay rent, they should pay market rates with very firm property care stipulations.
IMHO of course.