Dear Quentin,

My daughter was a TV starlet in her youth, and thanks to the magic of compound investing, has a large amount of cash on hand (approximately $1 million).

She wants to take some of this money and make the down payment on a co-op or a condominium. She and her boyfriend would then move in, and split the monthly expenses.


She wants to take some of this money and make the down payment on a co-op or a condominium. She and her boyfriend would then move in, and split the monthly expenses.

If she puts down the entire down payment, they move in, and then split up, I believe she should have clear claim to the asset(s) she brought into their arrangement.

However, if he contributed to any part of the mortgage payments, could he claim he contributed to the (increased) value of the property, asking for money if/when it is sold?

And if he were to directly pay her, would that be considered income for her? She would have to add that to her taxes, right? Seems like a huge amount of added paperwork!

They’ve been a couple for more than 3 years; she still hasn’t told him she’s rich; apparently, that is too embarrassing for her. I appreciate your input.

The Mother

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com

Dear Mother,

It’s worse to have important conversations about money for the first time during a marriage or, perish the thought, during the heat of a divorce — instead of during the courtship. The earlier this discussions happen about assets and expectations and income and contributions, the better.

If your daughter was a TV star and she’s browsing million-dollar listings — whether or not they have had many of the conversations they ought to have ahead of a property purchase — it’s safe to assume that her boyfriend knows more about her finances than she might believe.

Let's say they live in California, a community property state: Anything they bring into the marriage, assuming they get hitched, they take with them in the event they divorce. Other community property states are Arizona, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.

Your daughter could classify any payments her boyfriend makes as rent and, yes, she would declare that on her taxes. Again, the extra “paperwork” — filling in forms online — is small potatoes compared to the hassle of being audited. Put everything in writing, and keep finances separate.

If they did decide to marry, and your daughter’s boyfriend contributes to the mortgage directly and/or improvements to the house, the property would almost certainly then become a commingled asset, and convert from being separate property to marital/community property. She has been warned.

How much rent he pays in a house that she owns, I will leave for them to figure out.

The Moneyist: ‘Warren Buffett and Harry Potter couldn’t get those two retired early’: Our spendthrift neighbors said our adviser was ‘lousy.’ So how come WE retired early?

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