Q: My wife is reluctant to buy a home with me because she has more money for a down payment than I do. Is there a way we could buy a home and have a legal contract stating that she put 80 percent down and I put 20 percent down on the home and have those equity percentages protected in case of divorce or death?
We live in Michigan. I would really appreciate hearing from you.
A: The short answer is, of course, yes. You can purchase property and keep the ownership in unequal shares. One way to do this would be to change the way you own the property. Instead of owning the property it as joint tenants with rights of survivorship, you can own the property as tenants in common and designate that your wife owns 80 percent of the property.
You can also set up a revocable trust specifically for the property purchase and make your wife the beneficiary of 80 percent of the trust, while you get the rest.
But there are other ways to equalize the down payment issue. How will you split up the expenses of the property? Will you contribute equally to the maintenance, upkeep, mortgage and taxes? If you’re going to shoulder more of that burden going forward, then perhaps the fair thing to do is to keep track of how much you put in on an annual basis, and split the ownership of the property equally.
Finally, you and your wife could simply purchase the property with less money down. If you can put down $10,000, ask your wife to match your down payment. Once you know how much you have to put down, you can decide if you are both able to float a bigger mortgage or you can decide to purchase a less expensive property.
There are plenty of creative ways to overcome your problem. But it seems to me that there are bigger issues behind your question. Money is a powerful subject in marriage and I’m wondering if your wife really wishes she had signed a pre-nuptial agreement with you, in order to protect her assets. (Although you are now married, you and she can always write a post-nuptial agreement that spells out the division of assets in case of divorce or death.)
Perhaps she feels nervous in some way about the relationship that has nothing to do with you but everything to do with a previous relationship she had, or the relationship she witnessed between her parents.
You also didn’t mention in your letter if this is a second or third marriage for you and your spouse. Often, in second (or later) marriages, spouses with grown children from previous relationships are concerned about passing down the wealth to their own children specifically.
I think you and your spouse need to talk to each other — perhaps in the presence of a trained counselor who can help you figure out what’s at the root of her insecurity about money and making this commitment with you.