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The Moneyist

Jan. 23, 2021, 3:28 p.m. EST

I married my husband 20 years ago. He has 4 kids and I have one. I paid for our home. How should we split it after we’re gone?

‘The majority of the purchase price was from my condo sale and my inheritance savings, but my husband did contribute several thousand dollars’

By Quentin Fottrell, MarketWatch


MarketWatch photo illustration

Dear Moneyist,

Twenty years ago, I was married at age 60 to my second husband. He has four grown children; I have one. When we married, we lived in my condo, which we later sold to buy a new home. The majority of the purchase price was from my condo sale and my inheritance savings, but my husband did contribute several thousand dollars. We have mostly shared our living expenses and keep separate bank accounts.

Several years ago, we had our wills prepared and we agreed that upon our death or deaths, the home would be sold with half the sale being divided among his children, and half going to my child. My conscience sometimes tells me the home sale should be divided equally among our children. However, since it was mostly my money that purchased the home, I feel it is fair. Please give me your thoughts.

J.K.

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Dear J.K.,

I have received several letters over the years about the division of a family home, and some have been more complicated than others. In this scenario, for example, a couple wondered how to divide their home among their three shared children, and the husband’s three children from a previous marriage. I suggested they split the pie nine ways, and give their shared children two slices each. When I answered their letter, I thought that was the most meticulous — or, as I said, “churlish” — of the options facing them, but now I believe that word was too harsh, and that it was among the fairest options.

Your predicament, as much as it could be regarded as one, is somewhat simpler. You not only chose the fairest option, you compromised upon what is actually known as the “compromise price effect” by retailers. You were faced with three options rather than two: the most generous for your own child (she gets the house, minus the initial investment and other costs), the middle option (the one you have settled upon) and the least generous option for your own child (you divide the house equally among your child and your husband’s three children).

The Moneyist: My son inherited money after his father was killed in an accident. A woman came forward with another legal heir. What now?

There’s a hefty body of academic research — like this Journal of Marketing Research study by professors of marketing at Yale University and Stanford University — showing the middle option as a “compromise” for consumers. When people are presented with three tip choices — 20%, 25% and 30%, for instance — they’re more likely to choose the middle option even if it’s more than the traditional 20%, according to an analysis of 13 million New York City taxi rides by the University of Chicago’s Booth School of Business published in the American Economic Journal.

So I agree with your decision. It may be wiser to put your home in a trust, with instructions for distribution after you are both gone. If you predecease your husband, he could decide to change his will. But as far as your decision goes on how to divide your home, I agree with your joint decision. Your husband’s children are receiving a gift as much as an inheritance. Your own child would have received a larger inheritance had you not remarried. This way, you acknowledge and dignify both contributions, and make sure no one is forgotten in the will.

As Kristen Wiig’s “ Target Lady ” says: “Approved!”

The Moneyist: My mother’s husband died. Her savings are dwindling, yet she pays my sister’s bills. Should I intervene?

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