Dear Quentin,
I’m 71 and have been married to my second wife for 20 years. My wife moved to another state four years ago because she said she wasn’t in love with me anymore and wanted to be close to her family. A year before we were married I purchased a house for $240,000. Because she had terrible credit and didn’t make much I took out the loan, put down the 20% down payment, and have paid all the payments, insurance, taxes and repairs.
About eight years ago I was diagnosed with cancer and I needed to lower my payments because of expected medical bills, so I refinanced and added her to the deed (not the loan). After she moved out she said she wants 50% of the house when I sell. I owe $110,000 on the house and it is worth $300,000. I haven’t pushed for the divorce because selling and finding a nice place with the same monthly payments is impossible in this economy.
‘Do I get my $44,000 down payment back before we split given that we weren’t married at the time?’
The house is getting too much to manage as I get older, so I need to start thinking of getting my affairs in order. I have $500,000 in an annuity with my sons as the beneficiaries, and I also moved $400,000 in funds for my kids years ago to put into long-term CDs at 6% so they make a nice amount of interest, but I have a notarized document stating that the principal is mine. This took place 12 years ago, and my wife has no idea.
I made great money when I was working, and I have $300,000 in cash and gold in a safe-deposit box under my son’s name. I’m pretty well set since my Social Security insurance, pension and annuity withdrawal is more than I need to live on. But I’m in a pickle: What is my best option with the house? If I sell, do I get my $44,000 down payment back before we split given that we weren’t married at the time?
Any advice is greatly appreciated.
Help in Ohio
Dear Ohio,
That pickle, I’m sorry to say, is of your own making.
You did two things that have made life somewhat harder for you financially. You put your wife’s name on the deed of your home and you moved money without her knowledge. You bought this house before you were married and, as such, it was separate property.
Ohio is an equitable-distribution state where assets are divided fairly, if not always equally. Property owned before you were married is separate property, unless it was in some way commingled. By putting your wife on the deed, you effectively put it in the jar with that pickle.
Putting your wife on the deed to the house, but not on the mortgage itself, also means that while she now owns 50% of your property, she is not legally obliged to pay off the mortgage, even if the house went into foreclosure. I suggest cutting your losses and selling it ASAP.
The second pickle in your jar: moving $400,000 of marital funds — I assume — to CDs for your children and putting $300,000 in a safe-deposit box for your kids. This could be problematic if you cannot prove that they are separate funds.
Do not assume that marital assets will be split 50-50. A divorce court may take other factors into account when splitting your property.
A divorce judge may not treat you kindly if he believes that you did this to hide the money from your wife, even if the accounts are in your name with your kids named as beneficiaries. You could also end up slipping on those pickles, particularly if a judge decides you acted improperly.
Marital law varies by state. But “Ohio law permits the court to compensate the offended spouse with a larger share of the marital assets if the other spouse committed financial misconduct,” according to Cincinnati law firm Robbins, Kelly, Patterson & Tucker.
“Financial misconduct includes, but is not limited to, the dissipation, destruction, concealment or fraudulent disposition of assets,” the law firm adds. Consult a lawyer and be 100% transparent with the lawyer about your finances before filing for divorce.
Do not assume that marital assets will be split 50-50. A divorce court takes other factors into account when splitting your property, in addition to those above. They include how much each spouse contributed to the marriage and their financial circumstances postmarriage.
A judge will not treat you kindly if he believes you did this to hide money from your wife, even if the accounts are in your name with your kids named as beneficiaries.
Ohio law states: “If an equal division of marital property would be inequitable, the court shall not divide the marital property equally but instead shall divide it between the spouses in the manner the court determines equitable.”
When making that decision, the law considers the duration of the marriage, the assets and liabilities of the respective spouses, the liquidity of the property to be distributed and the economic desirability of retaining an asset or interest in an asset.
The good news is that your house is large, so you can downsize and hopefully find something in a cheaper price bracket, and you can look forward to the next chapter of your life single, free and happy (hopefully). As long as you are comfortable and pay your bills, you’ll be OK.
When your divorce is final, you can then change your priorities and finalize your estate plan, find a home that takes into account reduced mobility in the years ahead, and make sure that your children are provided for and, critically, that the money you leave them is yours to give.
English 
