Category: Stocks

The Moneyist: Is my boyfriend of 13 years entitled to half my house? I bought it 12 years ago — and he never helped with the bills

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Dear Quentin,

My boyfriend and I have separated after 13 years of dating. Twelve years ago, I purchased a home. We have never shared finances and none of his money was used in purchasing the home. He has never helped with the bills or the mortgage payments, and I never asked. He is now claiming that he’s entitled to half the value of the house when I purchased it 12 years ago.

Am I correct that he is entitled to nothing?

The Ex

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com, and follow Quentin Fottrell on Twitter.

Dear Ex,

Living with you rent-free does not a legal beneficiary make.

Some states acknowledge common-law marriage, but it is difficult for your ex-boyfriend to prove and enforce. For instance, you would have had to present yourself as married to friends, family and/or clubs or employers etc. Chief among those prerequisites is consent: both parties must typically consent to being engaged in a common-law marriage.

I received a very similar question last year from the other side of the equation, a man who wondered whether he was entitled to millions of dollars of his boyfriend’s earnings while they were together. You can read my response here. As I explained, common-law marriage derives from an old law, and exists in a handful of U.S. states, as an elective option.

“The phrase ‘common law’ originates with England and refers to those non-ceremonial marriages that were valid under English law. In the 1877 case Meister v. Moore, the U.S. Supreme Court held that a non-ceremonial marriage was a valid enforceable marriage, unless a state’s statute forbade it,” according to The Harris Law Firm in Colorado.

“Colorado’s statutes have not invalidated common law marriages and, consequently, they continue to this day. In addition to Colorado, only nine other states and Washington, D.C., continue to allow the establishment of a common law marriage. Those nine states are Iowa, Kansas, Montana, New Hampshire, Oklahoma, Rhode Island, South Carolina, Texas, and Utah.”

He wants a payoff after 13 years? He’s out of luck.

Hello there, MarketWatchers. Check out the Moneyist private Facebook US:FB  group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

Encore: What happens when worker benefits are cut? Some suggest that workers offset benefit loss with more saving elsewhere

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The economist’s simple life cycle model predicts that workers will respond to a $1 decrease in their defined benefit savings by increasing their supplemental savings by $1. Whether this prediction holds in practice may turn out to be very important for state and local workers.

Read: Saving for retirement? Here are 4 key lessons

Although the common story is that these workers spend a full career in government and retire with substantial defined benefit pensions, that often is not the case — all plans are not equally generous, many plans may lack the funding to pay full benefits, and one in four public sector workers is not covered by Social Security.

Read: What’s the best place for you to retire? Pick what matters most — you may be surprised

In other words, a lot of reasons exist for state and local workers to augment their pensions with outside saving, and all state workers and most local workers have access to supplemental defined-contribution plans — namely 457s, 401(k)s, 401(a)s, and 403(b)s.

To see whether public workers take advantage of these options, my colleagues estimated the relationship between participation in a supplemental defined-contribution plan, on the one hand, and low wealth accumulation in a defined-benefit plan, low plan funded levels, or lack of Social Security coverage, on the other. To do this analysis, they merged individual-level data in the Survey of Income and Program Participation (SIPP) with plan-level data from the Public Plans Database (PPD).

Read: The 5 most affordable Caribbean islands to retire to — and 2 to avoid

The key results suggest that workers do respond to low contributions to their primary defined-benefit plan — the solid red bars in figure 1 below — but the magnitudes are tiny. For example, a one-percentage-point increase in the employer contribution rate is only associated with a 0.19-percentage-point decrease in the participation rate, relative to a baseline of 21%. And the striped bars in Figure 1 show that workers do not respond at all to having a very poorly funded pension plan or not having Social Security coverage.

The bottom line is that people do not always respond as theory would suggest. State and local workers may simply not be aware of how much saving is taking place through their defined benefit pension; they may not appreciate the extent to which their plan is adequately funded; and they may not understand the implications of not being covered by Social Security.

Read: This no-nonsense strategy can get you the retirement you want

Whatever the reason for the lack of response, states and localities cannot count on their workers making up for reduced pension income through supplemental savings.

The Moneyist: I saved $1.1M for retirement, earn $128K and have $56,000 on my mortgage. Can I afford my dream car — a Nissan GTR?

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Dear Quentin,

I’m looking to purchase a used Nissan GTR and spend about $80,000.

I’m 41, single, no kids, and have always been a big saver. I currently make $128,000 a year, and have a combined $1.1 million in my 401(k), Roth IRA, and brokerage accounts. I’m saving 15% of my pre-tax income with 4% contribution from my employer.

Can I afford my dream car?

I have $56,000 left on my mortgage of which I’m paying an extra $500/month towards principle and planning to pay off within 5 years. I have about $150,000 equity in my condo and about $22,000 in savings.

Dealership appraised my current car, which I paid cash for, at $6,500, but I may end up keeping it as there are some activities I don’t/can’t do in the GTR (e.g. parking in the city, transporting bike, moving semi-large / dirty items, etc.).

1. Can I afford my dream car?

2. If I can, how should I go about financing it? Should I pay it off? Loan?

Any assistance you can provide would be greatly appreciated.

Thanks in advance for reading this.

Would-Be Dream Car Owner

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com, and follow Quentin Fottrell on Twitter.

Dear Dreamer,

I don’t want to quash your dreams of owning the car of your dreams. (Like I did with this guy.) But your circumstances are different to that good fellow: namely, you are financially independent, and you are in a very comfortable position for retirement, notwithstanding any unforeseen circumstances. You have worked hard to have the car you want. Bravo, my friend!

But should you get it? Think on this: It’s more than 62% of your gross salary, and it will make you happy (for about five minutes). Yes, that feeling typically depreciates along with the value of the car. I don’t know what this model means to you, but I do know that — from what you say about your finances — you are not the type to give in to your impulses at the expense of your financial security.

The biggest and best dreams don’t cost $80,000.

It’s an expensive toy and it’s a pricey piece of machinery. Automobiles serve both functions: They get you from A to B, and they give you that Christmas-Morning feeling when you get the keys. Keep that in mind before buying. Alternatively, consider leasing the car first to see if it’s an everlasting love.

I haven’t said you should buy it, and I haven’t said you should not buy it, mostly because I think if you really knew it was the right move, right now, you would not seek a second opinion from The Moneyist. I will say this: It’s a relatively modest dream for a not-so modest price. Here’s a secret that should not be a secret: The biggest and best dreams don’t cost $80,000.

People should generally not buy a car with cash when the price exceeds their own liquid savings, and/or during a time when interest rates are so low. Given your $22,000 in cash, buying a car of this price with a low rate of financing would make more sense. But the cash vs. financing question depends heavily on the price. If I were you, would I buy it? No. For all of the above reasons.

And if you did buy it with financing? Even though you would still enjoy driving it, there may come a day when you owe more on this car than it’s worth.

All too often in America, that’s the stuff that dreams are made of.

The Moneyist: I’m a farmer in my late 30s, live a frugal lifestyle, and my son has a disability. Should I pay extra on my mortgage — or save for retirement?

Hello there, MarketWatchers. Check out the Moneyist private Facebook US:FB  group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

The Moneyist: My sister’s home is in foreclosure, so she’s moving in with our parents. She posted on Facebook that she deserves their home

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Dear Quentin,

My sister and her partner lost their house. It’s in foreclosure. She is moving into my parents’ house, where she will pay no rent. She claims the reason is to take care of our elderly parents. She is the worst with money, and doesn’t make a ton. She has always borrowed money.

Anyway, my parents do need the help. She is the power of attorney for my parents and will be executor of their will. I don’t know why my dad did that. My suspicion is that he is not of sound mind. She is the closest sibling, and has no kids at home. She has been helping them the most, even though I come down weekly.

We said they can stay in the house, but when they pass it will be split 5 ways as it’s the family home, she seemed upset, like I can’t hardly even describe it. She posted on Facebook and other social media, saying that we fight for the will, but not for the care. I come down weekly to see my parents, as does my sister.

What’s more, she is getting a payment from Veteran Affairs to take care of them. Any advice will be appreciative. The will states that my parents’ home will be split equally.

HJL

You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com. Want to read more?Follow Quentin Fottrell on Twitterand read more of his columns here.

Dear HJL,

You have put your sister on notice of your intentions. Without knowing her, I would say that if she is posting on Facebook about private family matters, and portraying herself as someone who wishes to help your parents (rather than help herself to your parents’ house) she is not being entirely honest with you, or herself or, indeed, her followers.

It’s early in the process to take credit for taking care of your parents, of course. If she is someone who does not do well under pressure and/or does not shoulder responsibility well, it seems that her time at your parents’ home may not go smoothly. Just because she will be paid by the VA as a care giver, does not mean she will follow through on those duties.

I receive many letters from siblings who are care givers and, as such, believe they are automatically entitled to receive their parents’ home. Often times, it’s after they have lived there for many years and their siblings have provided varying levels of support. In one such case, a daughter spent $125,000 on a home only to learn that the house was placed in a trust for the family.

‘There is no one size fits all when it comes to children and who gets the family home.’

— The Moneyist

In another scenario, a brother asked his brother to waive any inheritance rights should he predecease him. His sister-in-law wondered whether that was fair. I told her that the brothers should split the house 50/50 and/or give the resident single brother a life estate, but given that she had no financial worries, I suggested she give up her rights to the house.

I tell you these stories because no situation is the same, and my responses differ based on the circumstances. There is no one size fits all when it comes to children and who gets the family home. In this case, you have been forewarned. Keep a close eye on your sister, talk to your parents and let them know you are there to help.

Given your sister’s history and current opinion on your parents’ will, assuming she knows there is a will, she makes a risky proposition as power of attorney and executor. Talk to your parents about the reasons for their choices, and at the very least suggest a co-executor and an independent party, such as a family lawyer, as power of attorney.

A power of attorney is someone who should represent the wishes of the elderly relative, and an executor is someone who should be prepared to carry out those wishes. The social media posts should be saved in case you need more evidence to challenge your sister’s role as executor of your parents’ will before or after they pass.

Your sister has laid her cards on the table face up. Now you must decide what to do about them.

The Moneyist: ‘I cut his hair because he won’t pay for a haircut’: My multimillionaire husband is 90. I’ve looked after him for 41 years, but he won’t help my son

Hello there, MarketWatchers. Check out the Moneyist private Facebook US:FB  group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

Mutual Funds Weekly: These money and investing tips can hold your portfolio together if the stock market cracks

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Don’t miss these top money and investing features:

These money and investing stories, popular with MarketWatch readers over the past week, can guide you through any choppiness and uncertainty in the financial markets as investors anticipate and react to economic data and political developments.

Sign up here to get MarketWatch’s best mutual funds and ETF stories emailed to you weekly!

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Homebuilder ETFs jump on strong new-home sales data

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Exchange-traded funds with exposure to homebuilders, home renovation companies, and the residential real estate industry rallied Friday after a stronger-than-expected new-home sales report. Sales ran at a seasonally adjusted annual 1.02 million rate in March, the Commerce Department said. The SPDR S&P Homebuilders ETF XHB, +0.77% gained 0.5%, and the iShares U.S. Home Construction ETF ITB, +0.61% was up 0.3%. The Hoya Capital Housing ETF rose 0.1%. ETFs in this sector have surged since the start of the year, as the housing market stays hot and interest rates manageable for would-be buyers. XHB is up nearly 29% in 2021, and ITB has gained 28%.

New home sales soar to highest level since 2006

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New home sales occurred at a seasonally-adjusted annual rate of 1.021 million in March, the U.S. Census Bureau reported Thursday. It represented the fastest pace of new home sales since 2006. Month-over-month, sales rose 20.7%. Additionally, the Census Bureau revised the sales figure for February up to a rate of 846,000, from the originally reported rate of 775,000. The inventory of homes for sale at the end of March remained unchanged from the month prior, but was down 7% from a year ago.

The Moneyist: My coworker wants to sell her house as prices have skyrocketed. The co-signer on her mortgage demands 25%. Can she sell without his permission?

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Dear Quentin,

My coworker has spent the past few months prepping her house for sale. She currently lives with other family members due to the high cost of housing in our area, but this has also afforded her a big opportunity to sell up. (We live in the Denver metro area.)

Housing prices have skyrocketed since the purchase of her home, so her family wants to sell the house and split the proceeds with the other family members, with her moving back with her parents temporarily to save some money for a larger home and other expenses.

Yesterday, she mentioned she had a co-signer of the mortgage who is a distant relation and has never resided in the home. This person has never contributed anything financially to the mortgage or the house. They need this individual’s signature to put the house up for sale.

Upon being asked, this person demanded 25% of the profit from selling the house, and told her she was lucky he wasn’t asking for 50%! It seems this person is entitled to nothing, but as he was a co-signer of the loan, my friend is in a tough spot.

Is there any way she can sell her house, or get this distant relative off her mortgage so she can sell the house?

Concerned Coworker

Dear CC,

This is a cautionary tale. If you must buy a home with someone or have a co-signer to help you qualify for the mortgage because your salary or credit rating does not meet the bank’s requirements, don’t jump at the first person who offers help.

Even if it is someone you know well, ask yourself if they have another reason for volunteering. If it’s a distant relative, that requires even more caution. Why would he agree to this if he barely knows your coworker? He has shown his true colors. He wanted a slice of the pie!

That works both ways: If you are a co-signer, you are liable for the loan if the primary applicant and/or the person on the deed fails to pay the mortgage. In this case, your coworker should ensure this relative is a co-signer and not also on the deed of the house.

If he is only a co-signer, he is effectively a guarantor who is also responsible for the loan should your coworker not pay. He cannot object to her selling the home. He is either mistaken in the leverage he holds, or your coworker has confused co-signer with co-owner.

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com, and follow Quentin Fottrell on Twitter.

The mortgage agreement may have a co-signer release by which your friend can release the co-signer after a specified period of time and/or having met other conditions. It could be two years of on-time payments and an increase in her credit score.

Alternatively, ask the lender or refinance. The latter is often the most convenient option for people in this situation, but your friend may be unwilling or unable to do this given her timeline to sell and the costs involved in refinancing for a short period.

Your coworker did not buy this house alone, and she cannot sell it alone. She needs to seek the counsel of a real-estate attorney to sort through the paperwork, liaise with the lender, and figure out the best way forward. Only then can she make an informed decision.

First and foremost, she should know the status of this person: co-signer, or co-signer and co-owner? If it’s the former, she could decide to give her distant relative a monetary gift as thanks, with the advice of the real-estate attorney.

Given his demands as a co-signer, I would not be gilding any lilies anytime soon.

The Moneyist: ‘I cut his hair because he won’t pay for a haircut’: My multimillionaire husband is 90. I’ve looked after him for 41 years, but he won’t help my son

Hello there, MarketWatchers. Check out the Moneyist private Facebook US:FB  group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

Existing-home sales fall for second consecutive month as house prices surge to record levels

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Existing-home sales declined in March, reflecting the challenges buyers continue to face in the competitive real-estate market. Existing home-sales fell 3.7% to a seasonally-adjusted, annual rate of 6.01 million in March, the National Association of Realtors reported. Compared with a year ago, home sales were up more than 12%. Home prices hit a high of $329,100, reflecting a record pace of price growth at 17.2% from last year.