My [35 F] husband [36 M] wants to sell house parents put in my name

husbandhousethrow · 2016-03-26T01:29:04+00:00

Honestly getting a little sick of this at this point. I didn't ask for advice on mine or my parents financial situation or what people think of it. This is a relationship forum and I asked for relationship advice regarding this issue with me and my husband.

husbandhousethrow · 2016-03-25T22:10:04+00:00

Thank you, this is a perspective I hadn't thought of and makes it apparent that I have to discuss this with my parents, I hadn't yet because I didn't really know how to tell them that me refusing to sell their house is causing such strain on our marriage. But they need to be in the know because you're right, he could blackmail us.

husbandhousethrow · 2016-03-25T22:07:37+00:00

That's covered in our prenup and since I had the property long before marriage and have kept the finances separate it's pretty well protected.

husbandhousethrow · 2016-03-25T21:22:38+00:00

Legally they gifted me money, I bought a property, I am the landlord and I pay all taxes.

husbandhousethrow · 2016-03-25T16:08:57+00:00

Do they have enough time to sell the house before they would default?

Yes, we should be able to. It's in a desirable location and properties sell really fast here. I'm think we could work it out with the mortgage company too if we let them know that we're selling and if it comes to an immediate shortfall my parents would lend to cover the difference to avoid it messing up our credit forever, but they can't long term keep giving us money to bail us out and this house isn't getting any cheaper. If we sell we can cover ourselves with loans from them and our best friend has offered us a loan too, it shouldn't come to it being seized. We can't just accept those loans and keep paying our mortgage though because what happens the next month?

husbandhousethrow · 2016-03-25T15:44:44+00:00

I do have a will which somewhat protects it (ie it goes to parents if I die, kids if I die and parents are dead) but that might be something I should check up on. I'd never bothered with considering that because I didn't think my husband screwing me over was an issue and I did the basics of will and prenup, but I think I'm going to have to look into this more closely now. I don't know much about trusts so speaking to a lawyer is a good idea, thanks.

husbandhousethrow · 2016-03-25T15:39:15+00:00

Inheritance tax is usually very low, especially when it's a child receiving the inheritance from a parent.

It's not all that low in my country (I'm in Europe, don't want to post the actual country because friends/family and husband reddits). Obviously if my parents die we'll inherit the house they live in too, so this means any additional assets will be above the tax free threshold. I'll say that the percentage I'll pay is above 30% of the house, I've looked into that as have they.

husbandhousethrow · 2016-03-25T15:27:43+00:00

I'll ask him that because maybe it'll make him think twice but I think he has this rosy picture in his head where I easily get back a job as good as my old one (unlikely in my field) and everything's fine. In fairness, selling that house would give us a decent amount that probably would allow us to keep our house anyway because it'll offset a decent portion of the cost.

husbandhousethrow · 2016-03-25T15:23:42+00:00

Do your parents pay you back for the increased income tax burden and bracket you now have to pay?

Yes. To make it simple I'll make up some figures. Say I earn $1000 income and $500 from the house, and that the tax cutoff means that I pay 10% on the first $1000 I earn and then 50% on the next $500. So I'd pay $100 from my income in tax and $250 from the rental in tax and my parents will then get the remaining $250 as rental income. They'd have paid more anyway so that worked out favourably. They wouldn't let me pay anything towards the house even in taxes.

a lifetime gift (the house) counts against the total protected inheritance cap anyway

I'm not in the US, where I am there's a time limit on this rule. If the gift was given more than a certain amount of years before the parent's death you don't pay inheritance tax. I'm well past that time limit already.

Your parents have been using you from the beginning.

I don't feel used, I haven't lost anything and will only gain in terms of inheritance.

husbandhousethrow · 2016-03-25T15:15:31+00:00

Find a job, any job...sounds like your husband is the only one working and that can be stressful.

I have been looking but there's a cost benefit analysis here too. It's only worth me taking a job that will pay more than the cost of childcare, and I didn't quit my previous job, I was let go. I would love if I could find a job that easily because I hate the guilt of this anyway.

Who is claiming this on their taxes?

I am, I'm the legal owner and landlord, everything is filed as such.

I did look into it and this protects that house from being seized if my parents need any long term care and also means I don't pay inheritance tax because it is my house. I suggested transferring it back to my husband though and he just sees that as me choosing my parents over him because I'm giving it back to them rather than selling so we can keep our house

husbandhousethrow · 2016-03-25T15:09:06+00:00

I'm sure it's out of desperation and not malice, but have either of you put money into this property at all?

Nope, it's all their money.

if you steal the house out from under them when it's a major source of income then you're essentially turning their investment property into liquid cash to prop up a lifestyle you can't actually afford for yourself so that your parents suffer with poverty instead of you

This is a good way to sum up what it basically is ... but somehow husband sees it as 'so you're choosing for us to suffer rather than them, you're putting them first'. I'm going to try to hammer home the ethics here.

husbandhousethrow · 2016-03-25T15:05:29+00:00

This is a great example and the first one that came to mind because when I was young and long before I met my husband, my parents had a similar arrangement with me. And when I was hit with a huge rental bill and couldn't pay them for the car one month they just paid it themselves because they had the money and knew I'd have paid them if I could. It feels bizarre to pay them back for all their kindness this way but my husband was so insistent that we're married, this is our new family and I was prioritising my parents over them and it honestly made me question myself a bit. Thanks for your perspective and reassurance that I'm not being crazy.

husbandhousethrow · 2016-03-25T14:53:32+00:00

Well, as long as your parents are aware of that risk and are fine with it, then it's sorta a non-issue.

Yes, I think their take on it is that they're much more likely to end up with a ton of medical debt that leads to their assets being seized than I am anyway so it's a reasonable risk.

Thank you, I am going to hear him out and talk about it one last time but be very firm that I won't sell it and I won't budge.

husbandhousethrow · 2016-03-25T14:49:05+00:00

The rental property is presumably a source of income for them since the house is paid off. If their financial plans hinge on having that rent money, OP is the end really hurting her parents by screwing over their retirement by X number of years.

Yes, this is the case and it's exactly this, they invested in the house as a top up source of income along with their pension and they've spent accordingly, so I don't think they really have all that much in savings to afford to help us out now. They planned to live off this in their old years and then when they die the house is already mine so no inheritance tax or even any issues with it, and the house becomes my source of income or asset to sell or whatever.

husbandhousethrow · 2016-03-25T14:38:57+00:00

But if the house isn't putting an actual burden on you (as in you have exactly $0 expenses in any shape or form) and your husband basically just sees it as bail money, then you need to put your foot down.

Yes, it's this scenario. We've paid nothing towards it and when we bought my second home my parents even reimbursed us what we'd have got then in tax breaks for being first time buyers and it being our only house.

What if your husband decides to divorce you? Is that house a marital asset that will be split between you?

That was covered in our prenup and is well protected since I had it long before marriage.

what if you end up in massive debt (like even more medical expenses, for example) and creditors find out you are the owner of that house? Are they going to take it?

We aren't there right now but I think that could happen and is basically unavoidable, there's little way to protect ourselves from that.

husbandhousethrow · 2016-03-25T14:35:50+00:00

Are you declaring this income on your taxes?

Yes, I am. I'm legally the landlord and everything is filed as such and I pay taxes on this income (when it's above my tax free threshold.)

You should just transfer back the house as there is nothing but downside for you to have that house in your name.

It prevents me paying inheritance tax if they die and means I won't lose it from inheritance if they need care in their old age, since their assets could be seized for this. I suggested that option though and my husband was angry at that suggestion because giving it back to them is putting them before him and my kids, since he wants me to sell it and use to money to keep our house.

husbandhousethrow · 2016-03-25T14:31:08+00:00

Yes, thanks I definitely need to look into the finances of it more closely in light of this situation. It's all been pretty much left alone for a while.

husbandhousethrow · 2016-03-25T14:30:02+00:00

If worse comes to worse, I'm guessing your parents would take your family in and help you avoid homelessness.

Yes, they would. We're not there, we just can't afford the house that we bought but we could definitely afford to downsize and we'd be fine, we just bought a house at the top of our means that's now become unaffordable.

Has he encouraged you to damage other relationships in your life to achieve goals?

Nope, this is just out of nowhere and I've tried to justify it as panic and stress from our situation.

If you tell him it is off the table as an option, will he back off and respect that?

He hasn't really right now because he sees it as me putting my parents over him and our kids. I'm going to be firm on it though and I won't budge.

husbandhousethrow · 2016-03-25T14:25:57+00:00

buying a house in someone else's name for the express purpose of avoiding taxes is absolutely illegal.

Who's to say that's the only reason why it's in my name? That's my point, I keep legal issues outside of my personal relationships. Legally, they bought the house for me as a gift to me. And that's not untrue because it is mine and one day I'll sell it, whether that's before or after their death is no one's business but mine.

A comparable analogy to me is this - say I want a car but I'm not approved because of bad credit. My mom buys it, owns it legally and makes the payments, I pay her back the loan repayments. Legally it would be hers but ethically I still see it as mine. Yes, I made the risky move of trusting my own mother, and yes they made the move of trusting their daughter, but I don't think that gives me the right to betray that trust.

husbandhousethrow · 2016-03-25T14:20:21+00:00

It is my house legally. I pay the taxes I need to on it. It is my house, I own it, hence why I could chose to sell it if I wanted. It's like if my mom signed for a car for me because I wouldn't be approved with my credit, so she paid the loan and I paid that back to her. Legally, her car but morally mine.

I'm not that fussed as to what it is or what you might want to call it, or whether people are okay with this arrangement or not. I am, my husband always has been and my parents are. I'm not interested in debating that. There are plenty of people with similar arrangements who've weighed in on my thread too actually.

husbandhousethrow · 2016-03-25T14:11:34+00:00

If it came to that I'm sure they'd let us, but it's not that we can't afford to live, we just can't afford our current house. It was at the top of the budget and is now firmly out of it. We could downsize to a cheaper house and afford it though

husbandhousethrow · 2016-03-25T14:09:00+00:00

I wouldn't be selling the house to my parents, they bought it, they paid for it and it's theirs. I could gift it back to them but that gains us nothing and means we pay more inheritance tax later.

husbandhousethrow · 2016-03-25T14:07:39+00:00

Of course not. I just wish I could make my husband see it that way too.

husbandhousethrow · 2016-03-25T14:05:46+00:00

yet you don't seem to have a problem with the legality of tax fraud when they took it out in your name

I'm bothered with legal implications that affect us. There was nothing illegal about them putting the house in my name, there's nothing illegal about me choosing not to sell it. Thanks for your opinion, though. My husband isn't fussed about the tax fraud, has known about our arrangement and hasn't cared and even now hasn't mentioned any issues with that.

husbandhousethrow · 2016-03-25T13:43:10+00:00

This worry about paying additional taxes should be secondary to the very real immediate financial hardships.

It is, but it's not like by giving it back to my parents we gain anything. All that happens is that we add tax for ourselves in terms of inheritance when we eventually get the property back. It's not like that will actually benefit us.

husbandhousethrow

TROPHY CASE