kdamron
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Post by kdamron on Apr 26, 2011 9:26:36 GMT -5
I am curious how much the past and people you are close to affect your financial views. Some of you may know the basics of my story, my house is currently being leased by a lovely couple. I live with DF, we have his two girls approx 50% of the time. Our plan is to sell his house in about 3 years and build one together. DF will use the equity of the house sale for his down payment, I will pay mine in cash. I do not want to sell my house, and a lot of my reasons are because of the stories of two widowed friends and my mother. Windowed friend #1 was widowed about ten years ago in her early fifties. Her husband had been middle management and started being effected by layoffs about ten years before his death. They have no children. In their early years they did everything right, signed up for IRA's and 401K's as soon as they became available. Good careers, at one point owned their own business. After his death she had two layoffs that totaled around 4 years. She has a good job now, but a lot of the money she and her husband had set aside in their younger years is gone. She needed it to survive. Widowed friend #2 was widowed about three years ago in her mid forties. Her husband was about 15 years older. He died about three weeks after major open heart surgery. In the weeks before the surgery he made a new will. It was written by him, witnessed by two people and notarized. He had two 'original copies'. In it he left everything to her. Her step-children (whom she had known for 20+ years) sued her for the life insurance money. It took her over two years before the case was thrown out (it was rejected in the first court, they appealed it, when they lost the appeal their lawyer declined to pursue it further). It cost her about 50K to defend, but more importantly it destroyed her relationship with his children whom she sincerely loved. Ironically, she would have ended up giving them a decent amount of the money. Mom - was widowed about 3.5 years ago (my step-father, not my dad). She found out when he died that a number of the things he had told her he taken care of weren't true and she was significantly worse off than she thought she was. When she went to sell the house that they owned she needed his daughters to sign an affidavit of heirship, even though they weren't in the will (I don't think the will has been probated). Apparently my step-dad had taken a loan out from his sister that he never paid back. On the notarized document they had to sign one of the girls wrote that there was a lein on the house due to this loan. There was not. The title company told mom repeatedly that she was under no legal obligation to pay the loan at closing. But of course she paid it because it was the right thing to do. What upset her so greatly is that instead of just calling her and asking to make sure the money got paid back her step-daughter (again that she had known for 20+ years) tried to make it sound like legally mom couldn't sell the house until this was paid. I find that these stories greatly affect my life and color my view. DF's will currently has everything going to his girls. I totally understand that. When we buy a house he will change it so that everything we own joint comes to me and vice versa with my will. This is a large part of why I don't want to sell my house. Well, that and the fact that like any good YMer I plan on having a mini-real estate empire when I die... Also, their lives and their stories have made me be better with my money, spend lest and invest more and have generally been a large part of the reason that I work so hard for financial security. So I wonder, do the lives of the people close to you affect your decisions in your own financial life? Oh, and before anybody asks, no DF doesn't have an issue with me keeping the house.
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Small Biz Owner
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Post by Small Biz Owner on Apr 26, 2011 9:32:50 GMT -5
Of course they do. I just make sure if I pass away I have enough life insurance so that they should never have to worry about money for a long time, if ever, in their lifetime.
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Gardening Grandma
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Post by Gardening Grandma on Apr 26, 2011 10:11:04 GMT -5
I don't have an issue with you keeping the house either. DH owns a house - he had it long before we were married. It is rented out and the rental income is his "allowance"....
He divorced twice before we married and I think that somewhere in the back of his mind, the house is his "Plan C" if anything should happen. I'm totally OK with it.
I'm not too worried for myself. I manage the finances so I know exactly where we stand. I have my own pension and SS. In addition DH's pension has a survivor's benefit, so if he goes first, I'd be OK financially. (Emotionally I'd be a mess)
I think I'm affected less by others' experiences than by my own...
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kdamron
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Post by kdamron on Apr 26, 2011 10:23:41 GMT -5
I don't have an issue with you keeping the house either. DH owns a house - he had it long before we were married. It is rented out and the rental income is his "allowance".... My hope is that the rental income will be a part of our joint retirement portfolio some day. I just like the security of having it still. And yes, the older I get I do realize that my own past influences me quite a bit too!
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busymom
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Post by busymom on Apr 26, 2011 10:35:49 GMT -5
Absolutely! If you grew up in a household without a lot of money, it DOES affect how you see money, and the world. Growing up I had a family member who was in and out of the hospital all the time. Many of the neighbors had cabins "on the lake", which we too could have had, if it were not for all of the medical bills. I was so impressed that my Dad made good on all those bills, and even set up his retirement so that when he died, my Mom had an excellent monthly pension (not all of his coworkers were so kind, as some set up their pensions to get the maximum amount while they were alive, and when they died, it left the wives with nothing). Now DH & I are living in a world with no pensions, and with only a little of Social Security and managing our own retirement is how we have to plan our future. Because we have no pensions, we have included life insurance in our plan should either of us die too young.
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Deleted
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Post by Deleted on Apr 26, 2011 10:43:22 GMT -5
Sure. My family is a set of financial train wrecks. I'm glad I wised up when I was in my mid 20s.
Multiple marriages can make some uncomfortable funerals. DH's parents have/were married 3 times. Nothing like dealing with 3 ex-wives when you're grieving for your father.
Even smart people can make some big financial mistakes. I'm really glad I found this board.
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kdamron
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Post by kdamron on Apr 26, 2011 10:44:53 GMT -5
Even smart people can make some big financial mistakes. I'm really glad I found this board.
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Deleted
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Post by Deleted on Apr 26, 2011 11:00:03 GMT -5
It is the current case for my wife and I:
I was raised by a mother that struggled, working 2 jobs, never seeing her to support us. It shaped me into wanting to save and expecting the worse.
My wife was an only child and was never told no. In her mind, her mom is always plan B in case something goes wrong, and she thinks I am the weird wrong for refusing to rely on my parents financially.
But we have been together 8 years, and slowly we are rubbing off each other. She spend less now and I understand the importance of enjoying life while saving (just spent $75 on games).
Also, thank god for Your Money!
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Deleted
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Post by Deleted on Apr 26, 2011 12:14:05 GMT -5
But we have been together 8 years, and slowly we are rubbing off each other. She spend less now and I understand the importance of enjoying life while saving (just spent $75 on games). My husband and I are opposites too. We both grew up without much. My mom was a single mother with no support from my Dad. She was very frugal, but I never felt poor, and we still had a good life. My husband's family was extremely poor. Seven kids, very little money, and they had almost nothing growing up. I took on my mother's ways and squirrel money away and he is a big spender. I think he felt when he got out and got a job he had it made and everything he wanted he got because now the money was there. He didn't save and got himself in trouble with a rental when the renters stopped paying at the same time he lost his job. Ended up getting the house foreclosed and declaring bankruptcy in 2006. We sometimes butt heads, but, for the most part, it's been working out pretty well for both of us. Because of me he won't be eating dog food in retirement, and because of him I'm forced to loosen up and enjoy life more.
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kdamron
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Post by kdamron on Apr 26, 2011 13:25:17 GMT -5
From what you posted, it seems there are issues in the above with step-situations. And, before your spouse just automatically leaves everything to you, i do think he should be setting up something for his daughters as well or that could lead to a bitter situation in the end. I never said a thing about him automatically leaving it all to me. I said, everything we own jointly (house, boat etc.) comes to me. If I have put a down payment on it and made payments on it I do not ever want to be in the position of having to buy his kids out of the equity. I will do the same and make sure that my interest in all joint purchases go to him. All life insurance, 401K etc I fully expect will still go to them.
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Post by stl76 on Apr 26, 2011 14:25:44 GMT -5
"All life insurance, 401K etc I fully expect will still go to them. "
You should not expect all of this to go to them only. You should have a share in these assets and so should any kids you may have together.
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kdamron
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Post by kdamron on Apr 26, 2011 14:37:43 GMT -5
"All life insurance, 401K etc I fully expect will still go to them. " You should not expect all of this to go to them only. You should have a share in these assets and so should any kids you may have together. I know that a lot of this will change as time goes on. The more we combine our financial lives and start growing our assets together, we will both sit down and talk about what is right and fair to all involved. I would never expect him to leave his girls nothing, and assuming our lives go on as planned, we will no doubt both leave what's left of our estate to them. I wanted to point out that I am not the wicked stepmom who would leave them penniless... ;D
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Post by stl76 on Apr 26, 2011 14:51:45 GMT -5
"I wanted to point out that I am not the wicked stepmom who would leave them penniless... " I am sure you are not, but the girls may just turn out to be the wicked step daughters that may want to leave you penniless The whole point is if those were your kids together, if your spouse passes away, nobody would expect you to not get anything and leave everything to the kids. So why should this be any different? Plus they are only half his kids, they have another parent who will be leaving them something (or not) so if you do end up having kids together, I think that should be taken into consideration. I think that would only be fair. Does that make sense?
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kdamron
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Post by kdamron on Apr 26, 2011 16:37:33 GMT -5
"I wanted to point out that I am not the wicked stepmom who would leave them penniless... " I am sure you are not, but the girls may just turn out to be the wicked step daughters that may want to leave you penniless The whole point is if those were your kids together, if your spouse passes away, nobody would expect you to not get anything and leave everything to the kids. So why should this be any different? Plus they are only half his kids, they have another parent who will be leaving them something (or not) so if you do end up having kids together, I think that should be taken into consideration. I think that would only be fair. Does that make sense? That makes total sense, and I do sometimes struggle with balancing doing the right thing for everyone else with doing the right thing for me.
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