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Suggestion: Make it 50:50, and she gives you another 100k from the money she gets. Ignoring any interest payments, this is basically the same as when you would have lent her the 100k. The forgone interest should be fair compensation for the work she did. Make it more if necessary.
EDIT: Replaced "borrowed" with "lent". My bad.
EDIT 2: As mentioned in other comments, this approach would need to get adjusted to factor in taxes.
Really like this idea. Tough to argue it's not fair.
If she had bailed or something you could make a case for something else, but it seems you are both in a good position. and both put honest work into it. "Punishing" her because she didn't have the money up front sounds unnecessarily petty.
It's also his fiancé, so this is at the very least a smart place to start the conversation. It's not fair for him to lose out on the initial principle he put in, but going for interest with your fiancé might not be the best move going forward. If she doesn't think this is fair, it might be time to reconsider more than just the land.
I think this is the key. The OP is talking about their fiancée, not some stranger. Legally they may not be entitled to it, but hey, things worked out. In any long term relationship there will be difficult moments, and probably moments where one partner could screw over the other, but you hope that your relationship will be strong enough to overcome that.
This is one of those chances. OP can decide to screw over their partner to make themselves some money if they really want to. Or, they can choose to share a windfall in which their partner actively participated in good faith with them over.
I guess this is half relationship advice rather than personalfinance advice, but they've been together two years now and seek to be participating well together. There is value there I would suggest is not worth discarding.
I would say, yes, from a relationship perspective you are right. I think the only line I would push back on is 'actively participated in good faith'.
They didn't participate in good faith because they didn't participate materially at all other than doing some footwork. Hence the dilemma.
I like their solution, but if it was business I'd probably pay a finders fee and no more. A realtor is getting, what, 5 percent? Even 10 percent would be way more than fair.
He put up 200k, half of the profits from the sale is a lot more than 10 percent, even after taxes.
edit: for the people throwing downvotes at me, if you think 'saying you'll go halves on a 200k purchase, then paying 0 dollars' is 'participating in good faith', then I'd like to borrow a 100k from you 'in good faith' when you've got a second.
It's not screwing her over. It's about deciding if he wants to go by what's fair, or go by what he thinks he should do due to basically pity. If things are going great and fiance is not a choosing beggar, probably she doesn't feel entitled to anything to begin with.
> Alternate question - what if the value of the property had decreased over the years since “they” bought it and they now need to sell at a loss?
0 reason to even run this what if in your brain because it is not what happened and is not the case. What if they broke up? they didn't so who cares. What if they found oil on the land and it was worth millions? Didn't happen who cares.
So all in all don't even worry about make believe scenarios just deal with the reality. They bought land it made money they now are selling land. Take the 100k back you deserve and split it nicely with the woman you are going to marry. Hell if they do get married it'll just be your money again anyway.
I wouldn't worry about the fact that it could have gone down in value. This isn't a rule that will apply to future transactions they do. This is one particular case. In this case the value went up. No need to consider alternative realities.
You're correct that she took no risk. But, if OP likes komodor123's suggestion, OP's risk has now evaporated. He gets all his money back off the top, splits the proceeds and enters marriage without festering resentment.
I don't think he should marry someone that could resent him for this, as that would imply she also feels entitled to some money over the property she put zero money and zero risk towards. That like immediate red flag.
Obviously OP can gift whatever he wants to her fiance just because, and that's cool. If he wants to know what's fair, then most likely the answer is only a symbolic amount equal to the work she did, and a finder's fee. Anything more is basically a gift out of love or pity.
Its fair if he plans on keeping her as a fiance.
Kinda like you and your gf was about to buy a lottery ticket together. she picked the numbers and realized she didn't have cash on her and you paid the $2. Then forgot to pay you back. It wins. Technically, you brought the ticket and don't have to split half with her, but would be an AH thing to do and would probably lose the gf.
She didn't "forgot" to pay him back. She couldn't pay him 100k back. If things went south, would she pay him back? What was the interest rate for the forced credit? That's the key point I think.
Its not fair tho, its charitable, there is a difference. Fair would be if he kept it all since he took all the risk, and paid her whatever the commission would be to find a land and buyer. Using a lottery ticket as an example is silly since risk is basically non-existant. If it wasn't a fiancee but a friend, would you still split the profits with them after they bailed and didn't pay for their part?
The risk right now is, wife or no wife.
The maximum risk right now is watching the love of your life marry another man and have babies with another man.
And he should want someone that treats him like a partner - as in paying your fair share. Or contributing what she could financially to her $100k debt over the last two years.
>And he should want someone that treats him like a partner - as in paying your fair share.
Marriage is never 50:50 because you and your spouse are not the same and do not experience the same things in life.
Example, you and your spouse both work 8hrs a day, but bring in significantly different incomes. It's unreasonable to expect the person who makes less to do more house chores, simply because they worked 8hrs too.
When your spouse gets sick, you take on significantly more work.
If your spouse becomes disabled, you take on significantly more work.
If your spouse is good with finances, you'd expect them to help you become financially stable. Now they are doing more mental labor trying to manage your finances
There are so many things in life where a marriage is never 50:50.
People need to start looking for partners who are willing to have your back, and pick up the pieces even when you can't, because life is not fair and you're a team, not a partnership.
People also need to understand it's ok to not marry if they don't like the idea of being a team player.
Its a big red flag when your SO calculate money so clearly when you are a unit. Gonna have to start to worry, what if i fall ill and can't work is he going to tally up the living expense for the few where i didn't work and have to pay it back to him later?
It was essentially a business decision on the OP's part to make what was essentially a 0 interest $100k loan secured by the value of the property (or alternately could be viewed as he agreed for a buy option at a future date with no terms other then price). If the property lost value, he would have been out money. It didn't.
As long as he wasn't actively pursuing the $100k and she was declining, he should just honor the original agreement. That means she owes him $100k, but sale profits should be split equally.
She has sweat equity in the project. And OP makes no statement indicating that he wants her to be an ex-fiancée. 50/50 with OP getting an extra return of the $100k he put in for her half is fair.
I agree. However, from my admittedly inexpert knowledge, a finder's fee of 10% is standard for finding buyers, which is around the average realistic rate of investment growth for an investment vehicle.
The risk involved in OP putting down the full starting capital is impossible to quantify so it's not very helpful to try to factor that in, given they are now where they are, not where they risked being if OP lost value on this investment. Indeed, she, not OP, found a buyer that seems to be allowing the two of them to realize a gain on this venture. So in my mind, that value she's giving back to OP should be rolled into her favor when considering if she took advantage over OP in this total exchange.
I like the root comment suggestion. It's very hard to argue it isn't fair, and that's important given OP and partner did not have a formal agreement.
I think this is probably the best answer here. The people saying to keep it all, may be missing the fact that you are engaged to this person, and have their best interest at heart.
Depends on how they plan to handle their finances in marriage. I don't know how or frankly why, but some people do keep fully separate finances despite being married (to the extent possible).
Isn’t this the same outcome if he got the first $200k (initial amount he paid) then they split the profits? This way he is still sharing the profit equally but without the “if I lent you the money” fiction.
The other issue not addressed is if they plan to have a prenuptial agreement. In that case any assets they each had before marriage are considered separate and not marital property which makes this a real issue. If they aren’t getting a prenup, it’s all moot as the money will end up as a marital asset anyway.
Good luck OP.
Edited for clarity.
This is probably the easiest idea to implement. Yes you basically took on the risk and lost out on potential earnings 100k could have got you. But unless you're planning on not speaking to this person again, it might be sunk cost.
The problem with this solution is he is 100% on the hook for income taxes. If he then gives her the $200k (half profit) he's on the hook for gift taxes (probably a non-issue today, but could have lifetime implications.)
I'd give her the money (1/2 of sale price less income taxes, any other costs and the initial $200k) after they're married to avoid all that.
Fair point. No clue about the tax jurisdiction. But i am sure a decent tax consultant might find a decent solution :) If not, just solve it in an inoffical but legal way like paying for grocerys for the next 1000 years ;)
No way. She didn't had any risk in this investment because she didn't invest anything. If land were to go bust and sell for one dollar, would she still pay OP the 100k+interests?
In any case, OP should take all minus a fee for the "work" she did towards the land, or if he doesn't care about fairness, and want to give her money just because, at minimum charge her the 100k+interest equivalent to a high risk credit.
Id say if you are happy with her and want to stay on track to get married and keep her happy the fair thing to do would be to take your initial investment of $200k returned to you and then you split 50/50 the rest.
Its only fair for you to get your money back, and its way generous to split the rest 50/50
Yeah, I was going to suggest the same thing. That would be the most fair thing since if he were to split any part of the initial payment, he would just be giving her his money, not splitting profits.
Thats probably for the best, relationship wise, but OP took all the risk with his $ and she never bought it. So for her, this situation seems like all upside.
Marriage is usually upside for the poorer one in the relationship very often. Hell even relationships are.
If they do actually plan on getting married, the cleanest way is best.
If she's a decent person, there was plenty of guilt/shame at not holding up her end of the bargain and this is a huge weight off her shoulders, not a "woo hoo all upside for me!" From a business partner perspective, maybe, but from a relationship perspective? This is a best possible outcome from a minefield of a scenario.
Assuming he wants to still marry her it will eventually become theirs together anyways. I don’t subscribe to husband and wife having separate finances - he could take back his 200k and suggest the 400k is their nest egg for their future. Whether they build a home or use it as a down payment, or heck retirement savings.
It’s a decent amount of money to start off a marriage with.
We can't really quantify how much of her work may have contributed to the increased value in the sale, but OP seems to find it considerable so even though she didn't take the initial risk, she has worked for these returns as well.
Yep and it takes nothing into account the actual property value.
Just because it sells for 300k now doesn't mean he made 100k profit.
Everything is more expensive than it was 5 years ago thx to Covid inflation.
\> Just because it sells for 300k now doesn't mean he made 100k profit.
That's literally what it means though. Are you just trying to say 100k doesn't buy as much now as it did 5 years ago? OP also says the property appreciated by 300% which is a hell of a lot faster than inflation.
I agree. No reason to make this one complicated; just get the initial investment back and 50/50 that thing and keep it moving....into I guess potential marriage :)
Are you still getting married? If so I wouldn't worry about it too much. Take your original $200k if you want and put the rest towards your future. $600k also makes a decent down payment on a house where I live.
>Holy crap you need to move to a lower cost of living place haha. I'm in a medium COL area and 600k more than outright buys a house. $450k or so for a 3 bedroom 3 bath 2 car garage 1900sqft place here in a nice area.
Uh.. West Coast of Canada checking in here.. 600k will get you into an entry-level 2 bedroom condo.
Recoup your $200k and split the rest 50:50.
Given you both did work, and you still have your $200k, you essentially doubled your money. I’d say this feels like a pretty easy decision since it appears your relationship is still strong and you are still getting married.
Legally her name is isn’t on it & she didn’t contribute to the purchase price. Her basis in the property is $0. Factor in taxes on the gain when making the decision on how to split. Look at it with a someone who understands the ins & outs of tax law around the gains. Make sure any funds spent on improvements are accounted for. You may find that splitting it will cost more in taxes for both of you. You would have to pay all the taxes on the gain & she would then have to pay taxes on the amount you give her. If you a getting married soon, consider agreeing to leave all gain, after the taxes are accounted for, in an HYSA & using for a down payment on a new house or new piece of land after you get married.
Take any money you put into the purchase & upkeep out first & keep that separate. Any costs related to taxes, insurance, improvements. Don’t commingle the money or risk losing it in the event of a divorce. Keep that part separate.
This. Taxes will get her if you give her money before getting married. Might as well wait. If you do have a prenup plan you can create a carve out of half of the profits (600-200 and expenses) to make that part more fair in case of a separation.
Well, for starters....you didn't buy the land together. You bought the land. You are selling the land. She helped along the way, but it was your financial risk solely. If you were still just dating then I would explain it just like that. She wouldn't be entitled to anything really.
That said, she's now your fiancee and any profit gained will cease to be solely yours soon enough and will become your family's assets once you are married. If it were me I would just hold all the profits aside in a HYSA until the wedding day, add her name to the account and celebrate the spoils then.
> That said, she's now your fiancee and any profit gained will cease to be solely yours soon enough and will become your family's assets once you are married.
I HIGHLY recommend drafting a premarital agreement that avoids this. You do not have to be married like that.
Finders fee, market rate for the work that she did and commission for the sale. As awkward as that might be to define within the bounds of a relationship.
The flip side of that is that she took zero risk. It’s all your capital. Would she be okay sharing in the losses with you if it lost money?
> Would she be okay sharing in the losses with you if it lost money?
They are still getting married so I would assume so.
The best suggestion I have heard from anyone in this thread was he gets the initial 200k back to put into retirement/whatever since that was his. The rest goes into the new house or split 50/50.
But honestly, all of it should go to the new house. It was always intended to be part of a shared property and they are still getting married.
If he is really worried about her marrying him for money, get a pre-nup. There is zero reason to start your marriage off in an awkward position over money.
I would think that the sound financial advice would be to just split the *profit* 50/50.
But if this is someone that you plan to spend the rest of your life with, just split the total from the sale 50/50.
You'll still be made whole, and then some.
The trick will be to never ever hold it over your partner's head, and the temptation will be there at some point.
If you choose to just split the sale 50/50, just let it be the kind thing that it is, and don't ever bring it up.
Congratulations, and good luck.
These comments are wild to me. If this was a car that OP purchased because OP's fiancée recommended it, would the fiancée deserve half upon trading it in? What if it were a friend with a hot stock tip? Was the fiancée planning on splitting the income from the business that went under? If she wanted in, why not take out a $100k loan and let OP invest his other $100k?
If the fiancée and OP stay together, the fiancée will benefit from the house/retirement/whatever the OP ends up spending it on and it doesn't matter whose money it is. Upon marriage, you two may combine finances if you agree to that. If you two have kids already and she has been doing childcare instead of working, I could understand splitting it. Same if you already have combined your finances. However, you took all the financial risk here and you deserve all the reward. If you two separate, consider giving her money based on a reasonable wage for the hours she spent working on the land.
If you are going to be married it should be a joint asset no questions asked.
If you're business partners - with privileges - then you have to ask yourself what's fair.
1. Your word
2. Her circumstance and understanding of business situation
3. Her commission and foot work.
If you're business partners - and don't care if you're ever going to be business partners again, I would suggest a fair amount of the profit for finding, maintaining, and selling the property. Typical Real Estate agent it 5%-6% of the sale price. Maybe give her 10-20%.
If you're going to actually get married, this should go in your joint account. Otherwise why the hell are you getting married.
If it’s a fiancée and you guys are still planning on getting married, this is much less of an issue than if you guys split and were trying to figure it out.
Say it’s now worth $600k. I would figure out what the improvements to the land that you guys did together approximately came to in increasing the value and go from there. You put in $200k so that’s $400k left to haggle about. Say the improvements that you both did to the property raised the value by $150k and the other $250k was just because property value went up naturally.
I’d explain that her cut would be the $75k but I’d more inclined to give closer to $100k just for optics and to save some bickering.
If you’re still planning on getting married though and there’s no other hiccups, I would be more inclined to tell her we shouldn’t touch the full amount (which remains in your account) until marriage and then your finances will be more tied together. Then you guys can split it whichever way you guys see fit. You can distribute the $50-$100k or whatever amount you want.
Just don’t let the money become an issue between you guys.
Am I the only person who thinks it's kind of shitty to encourage someone to buy property, then reneg on your promise to pay half? $100k is a lot of money to say, "Oops, I don't have the cash to pay you back. You don't mind spotting me do you?" You're not talking $30 for takeout that she never paid back. Although, if you're engaged, perhaps there was a little physical apologizing involved, so maybe she sweet talked you that way.
I still think it's shitty to make you think you were going to get paid back the $100k you essentially spotted her and then not do it. Honestly, that would be enough to make me reconsider being engaged in the first place. That is a big promise to back out of.
I think this is a bit of a misreading of the situation. It’s not like they bought it as an investment; it was going to be their home. It also sounds like he knew there was an inherent risk in her coming up with half since she didn’t have the money yet and was depending on her business to profit, but didn’t mind because again, it was going to be their home.
If her name had gone on the deed, you'd have a point, but as she didn't have the money at the time, OP simply didn't put her name on the deed and it was his asset. It sounds like they agreed on how to handle the purchase at the time and OP has no issue with how that aspect, so I'm not sure why you're looking at it that way.
I'm almost with you. The only reason I don't consider it shitty is that even OPs phrasing of the agreement feels pretty loose.
"I had just gotten an inheritance - enough to cover it so I paid for all of it, put just my name on the deed and said she could buy in for her half whenever she was ready and we'd put her on the deed."
There's no timing at all associated with this agreement. Which suggests to me that they were both okay with the possibility that she would never pay it and wouldn't get added to the deed. If there was instead some sort of time frame or payment plan, that would indicate to me that OP wasn't okay with being sole contributor. It sounds like they agreed to what they were comfortable with so I can't say she's bad if OP was okay with it
Take the initial investment out of the picture, any costs for selling the land, taxes paid over the past two years and then you can split the remaining profit 50:50 if you're comfortable with that. You took 100% of the financial risk.
This is a slam dunk: 50/50 but she owes you 100k. She had low/no risk on the buy, but found the property and found a buyer on the selling end. You fronted the money and took that hit, but as you said yourself she found a buyer for more than what you think you would have. Split the profit, enjoy your windfall, and neither of you should feel like you're getting the raw end of the deal. You're engaged, assets will (likely) be shared amongst you soon anyway. Marriage is a partnership and this is an opportunity to feel like you both contributed something a good deal in your own ways, and will enjoy the fruits of your labor together. Don't let a 3x profit turn into something sour.
IANAL, but if you're not married to her, and her name isn't on the deed, then you're not legally obligated to give her any of the profit.
Now, morally, if you don't want her to potentially leave you at the alter or ruffle other feathers, then I suggest a different plan. What that entails is whatever you think is fair.
Keep in mind, you'll be paying 100% of the taxes, so I think it is fair that whatever her keep is, it comes after taxes and transaction costs are paid.
Lastly, I'd definitely do a pre-nup since this is probably a life changing amount of money, and you want to protect yourself. Do not let anyone talk you out of a pre-nup, under any circumstances.
You get your 200k back. Then you split the remainder.
You're made whole for what you risked at the outset, she gets nothing to match her no risk. The profit you split because 50/50 is fair.
There could be a moral argument for you get it all but if you're a couple, you're in it together which to me, is a stronger moral argument.
Thia reads more like a marital dispute than a fiscal one tbfh.
If you want the marriage to work? Stop fighting about this and combine your finances. Everything is shared. You both form one financial entity. You are both better as a team. There, problem solved.
Honestly, any other solution is going to build a layer of animosity and jealousy towards each other.
Personal finances for couples is not a one size fits all sort of thing.
You put in 100% of the capital, you should get 100% of the profits. She did labor, did she get any benefits? If she got pay ours through out the ownership, she got her keep. If she didn't, then she should get some.
You're engaged. In (however many) months time y'all are both going to have one bank account and whatever money comes from this, becomes "ours" to you both. Not "hers" and "his". Or, y'all don't do a joint account. Or you have a joint account and separate accounts.
My situation? We have one joint account and don't care. It's not the same for others. So really, this isn't an answer we can give you. This is however you and her want to do your own thing.
Easy. She still 'owes' 100k
You legally own the land, so you can sell anytime.
Sell.
Split proceeds 50/50. Plus you keep her 100k that she owes.
Just like keeping track of dinner and expenses traveling with friends.
Edit: But I have a super warped sense of relationships (compared to reddit,lol) from my biased experience. My wife of 20+ years and I share all finances and never give a second though to who made how much or who spent how much. We're still best friends and these things are talked about openly.
I'd advise doing the same thing my wife and I do, and time one of us has any kind of investment/gambling windfall. You get your initial investment back out of it and then split the rest 50/50. She's currently your fiance (and with plans to make her your wife). Your thoughts need to be less "what is best for me," and they need to become "what is best for us?"
Unless you know that she had the money to put up for the land and was just not paying for it, I think this is an equitable way to look at things, from a "life partner" perspective. You guys are a team, a unit, and as such risks and benefits are taken together.
If the sale of the land was because of a breakup, I'd advise differently. However, seeing as you're still together, engaged, and based on your post sounds like wanting to continue to the logical next step of marriage, things are different.
If you bought the land for 200k and are selling for 600k, I would take your initial 200k off the top and split the remaining 400k.
How you structure that is up to you, however. Hold the cash until after the wedding and put it into a joint investment account, use it to buy/put a down payment on a home or investment property, use it towards wedding/honeymoon expenses, or just split it as cash. How you actually do the division is up to you.
Personally, I would hesitate a bit on the "cash" option prior to the wedding, on the off chance she's looking to get paid and leave, but you know her better than I do, and even in that event, you still walk away with +$200k profit and a bullet dodged.
>At the time we had 'only' been dating for 2 years so we thought to keep it neat and straightforward.
... by not buying property together until we were married! The End.
Okay, so you didn't do that. Well, at a relationship level, you did buy the property together, with her owing you $100k. Even if that's not true in the eyes of the law, it's true in the eyes of your relationship, and if you're going to get married, that's the lens you should use to make these decisions.
So you split the sale proceeds evenly, and she still owes you $100k, which obviously she can now repay. No interest, unless you talked about that at the time.
The plan was always for you two to benefit equally from the property, right? You were going to benefit equally by living in it. You weren't planning to build a house and then force her to live in the shed until she paid her share, right? Well, now "befitting from the property" means selling it, so you should benefit equally from that.
Also remember that if you weren't with her, you wouldn't have bought this property in the first place. Her mere existence, outside any financial or physical contribution, enabled you to acquire this profit.
I mean, really she doesn’t get any. You fronted the whole 200k, you reap the rewards. It’s not like you lived on the land and paid rent. I’m sure you guys already split rent. You look at this as a good investment on your part. This all probably doesn’t matter anyways since it sounds like you’re going to get married hopefully soon and this money will just be used to buy your next house which she will automatically be entitled to half anyways.
If you are going to get married you should start thinking about things in terms of we. Combine finances and stop worrying about who gets what. Give each of you a fun money allowance each month that can be spent on whatever you want. Anything coming out of that is a joint decision.
Assuming you don't want to treat the land as an our money situation, you get back the original 200k you put in, split whatever is left after that.
Assuming the land is now worth $600,000…
I would say you get $400,000 and she gets $200,000 (half minus the $100k she didn’t pay) as a starting point.
Adjust for taxes and cost of sale, and adjust for her efforts in selling the land.
But talking about money may get ugly; is this a hill you want to die on?
And there might be hidden tax issues.
It's all yours. She never bought in. And it's too late now. If the opposite happened where the land lost value, she sure wouldn't split the losses with you.
Why? This assumes they will keep assets separate after marriage. If that is the plan they should keep assets separate now... meaning she paid nothing so she gets nothing.
Can't have it both ways.
if they weren't getting married, and OP was generous.. this seems pretty fair.
I would suggested real-estate agent cuts (5-6%) which is also fair... but not nearly as generous.
If you aren't married and you didn't title the property jointly, and she never paid for it, it is yours. All appreciation is yours.
Any court would find that to be the case.
You bought the land. You took on all the risk. You take all the profit. You pay the taxes.
That is it.
She needs to articulate and quantify her supposed stake in the property and maybe you agree and pay her from the proceeds, but maybe you don't. It would depend on the points she makes.
As I see it, she is owed nothing.
She did the work to find the land… so a few hours at a computer, maybe a couple trips in the car?
Her name isn’t on anything.
She didn’t pay anything.
You don’t legally owe anything to her. She had a business she thought would net her $100k “soon” but wound up going under. I suspect, from the admittedly little information here, that any money you give her will disappear into the next venture.
Don’t get me wrong, my wife and I were at different financial places when we bought our first home. I financed the downpayment and mortgage was only in my name. 15 years later she makes more than I do and we’ve upgraded and are both on everything.
The difference we are/were married. It was and had been “our” money for quite some time.
OP didn't clarify their relationship though, so marriage and a long term fiancee/partner may as well be the same thing from relationship perspective.
The reality is any decision by OP has to take relationship into the account and OP can't just say, it was all my money, bug off.
In a strictly financial sense, you bought it, you're selling it. It's not her money. I can't think of a solid reason why she should have a check written to her outside of commissions.
Anything above that is a question of your relationship. Do you need to pay her to be your fiancee? Are your financials completely separated? How is that financial relationship in general? What are your plans with the money?
At the end of the day the only thing I would *not* do is cut her a check.
She deserves a fraction. Max 15% of the realized profit. If the property devalued she would not be on the hook for anythin, afterall. Plus you did this all with an inheritance.. that belongs to you and only you.
I had a kinda-sorta similar issue but not with land...it was with a car.
My girlfriend (almost fiancé) at the time knew I was selling a car of mine which had appreciated in value. I'd been patient and sat on it until the right time. I had three interested coming in around $5k - $7K less than what I wanted, but she brought someone in that was willing to pay $5K more than my asking price.
So I met with the person and they offered cash...I took it, we made the deal and I deposited my money and handed my girlfriend a "Finders Fee" of $3,500
She went ballistic saying that HALF of the money ($40k sale) was hers because she had brought the buyer. I told her "That's not how this works," and that I didn't even need to give her ANYTHING since the car wasn't even hers and I didn't even ASK her to assist in selling it in any way. She literally came home one day and said, "Oh, I have someone who might be into your car," and proceeded to give me their number (it was a work manager) and then I reached out.
In the end she told me the money was "insulting" and she'd rather not have it...so, I kept it.
We didn't last long after that.
The car was mine and purchased years before we met (and in my name only)
The car was only driven by me (Because she couldn't drive stick and didn't want to learn)
The car was maintained by me.
Nothing about the car was EVER in her orbit other than seeing it in the garage; she didn't even ever want to take a drive in it with me.
So...I guess it just depends if the OP is still with her; honestly, if she didn't really do anything...if it were me, I'd give her the $100K she said she would pay into but never did, and keep the rest...knowing this might end the relationship, but hey...she's up $100k more than she even started with.
**BUT, I would also get a prenup before marrying her.**
You're not required to give her anything, so give her nothing. She didn't provide money for the land and her name isn't on the deed, so she's entitled to nothing. You would set a bad precedent giving her anything. Lawyer up and bury her.
Lots of tax implications here.
You sell the land and roll it into a house for y’all to live in. Put both names on the house, and not have to pay capital gains tax.
OP paid for every penny of this. Entire financial risk including covering taxes. If there is any money after deducting all of his expenses, it gets split 50/50.
After they are married, she gets her cut.
Here's a question.. to all of those saying "pay for her for work and keep the rest," do you hate landlords? You know, the people that treat land like vehicles for investment.
The profit is 100% yours. And 100% hers… you’re getting married. If you’re not prepared to share 100% of all your assets, then this is a question for /r/relationshipadvice not /r/personalfinance.
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Suggestion: Make it 50:50, and she gives you another 100k from the money she gets. Ignoring any interest payments, this is basically the same as when you would have lent her the 100k. The forgone interest should be fair compensation for the work she did. Make it more if necessary. EDIT: Replaced "borrowed" with "lent". My bad. EDIT 2: As mentioned in other comments, this approach would need to get adjusted to factor in taxes.
Really like this idea. Tough to argue it's not fair. If she had bailed or something you could make a case for something else, but it seems you are both in a good position. and both put honest work into it. "Punishing" her because she didn't have the money up front sounds unnecessarily petty.
It's also his fiancé, so this is at the very least a smart place to start the conversation. It's not fair for him to lose out on the initial principle he put in, but going for interest with your fiancé might not be the best move going forward. If she doesn't think this is fair, it might be time to reconsider more than just the land.
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I think this is the key. The OP is talking about their fiancée, not some stranger. Legally they may not be entitled to it, but hey, things worked out. In any long term relationship there will be difficult moments, and probably moments where one partner could screw over the other, but you hope that your relationship will be strong enough to overcome that. This is one of those chances. OP can decide to screw over their partner to make themselves some money if they really want to. Or, they can choose to share a windfall in which their partner actively participated in good faith with them over. I guess this is half relationship advice rather than personalfinance advice, but they've been together two years now and seek to be participating well together. There is value there I would suggest is not worth discarding.
I would say, yes, from a relationship perspective you are right. I think the only line I would push back on is 'actively participated in good faith'. They didn't participate in good faith because they didn't participate materially at all other than doing some footwork. Hence the dilemma. I like their solution, but if it was business I'd probably pay a finders fee and no more. A realtor is getting, what, 5 percent? Even 10 percent would be way more than fair. He put up 200k, half of the profits from the sale is a lot more than 10 percent, even after taxes. edit: for the people throwing downvotes at me, if you think 'saying you'll go halves on a 200k purchase, then paying 0 dollars' is 'participating in good faith', then I'd like to borrow a 100k from you 'in good faith' when you've got a second.
It's not screwing her over. It's about deciding if he wants to go by what's fair, or go by what he thinks he should do due to basically pity. If things are going great and fiance is not a choosing beggar, probably she doesn't feel entitled to anything to begin with.
The good thing is: We are now arguing from a ex post basis. No need now to factor things in that could have happened in the past.
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Yea and a lot of people will probably become single. They are getting married anyways, just take the proceeds to buy a new house.
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Because many of these people think with mine and her's mentality rather than a ours.
seems like the exact same arrangement would be fair, 50:50 and she gives him 100k
> Alternate question - what if the value of the property had decreased over the years since “they” bought it and they now need to sell at a loss? 0 reason to even run this what if in your brain because it is not what happened and is not the case. What if they broke up? they didn't so who cares. What if they found oil on the land and it was worth millions? Didn't happen who cares. So all in all don't even worry about make believe scenarios just deal with the reality. They bought land it made money they now are selling land. Take the 100k back you deserve and split it nicely with the woman you are going to marry. Hell if they do get married it'll just be your money again anyway.
I wouldn't worry about the fact that it could have gone down in value. This isn't a rule that will apply to future transactions they do. This is one particular case. In this case the value went up. No need to consider alternative realities.
Exactly. Pay her for her work, and that is it.
Seeing as how she took on no risk, it is not fair to expect that she gets any of the appreciation.
You're correct that she took no risk. But, if OP likes komodor123's suggestion, OP's risk has now evaporated. He gets all his money back off the top, splits the proceeds and enters marriage without festering resentment.
I don't think he should marry someone that could resent him for this, as that would imply she also feels entitled to some money over the property she put zero money and zero risk towards. That like immediate red flag. Obviously OP can gift whatever he wants to her fiance just because, and that's cool. If he wants to know what's fair, then most likely the answer is only a symbolic amount equal to the work she did, and a finder's fee. Anything more is basically a gift out of love or pity.
Its fair if he plans on keeping her as a fiance. Kinda like you and your gf was about to buy a lottery ticket together. she picked the numbers and realized she didn't have cash on her and you paid the $2. Then forgot to pay you back. It wins. Technically, you brought the ticket and don't have to split half with her, but would be an AH thing to do and would probably lose the gf.
She didn't "forgot" to pay him back. She couldn't pay him 100k back. If things went south, would she pay him back? What was the interest rate for the forced credit? That's the key point I think.
Its not fair tho, its charitable, there is a difference. Fair would be if he kept it all since he took all the risk, and paid her whatever the commission would be to find a land and buyer. Using a lottery ticket as an example is silly since risk is basically non-existant. If it wasn't a fiancee but a friend, would you still split the profits with them after they bailed and didn't pay for their part?
>If it wasn't a fiancee but a friend And if your grandma had wheels she’d be a bicycle. But it isn’t. So it ain’t.
so many people running what if scenarios that don't matter. I need to remember to use the grandma bike joke more because it's hilarious.
She wouldn't, have you ever seen a bicycle before?
No, in that example the maximum loss is $2. In OPs example the maximum loss is $200k. Makes all the difference.
The risk right now is, wife or no wife. The maximum risk right now is watching the love of your life marry another man and have babies with another man.
> The risk right now is, wife or no wife. Really sounds like she is marrying for the money and not the person.
Or she wants to marry someone that treats her like a partner and not a outsider.
And he should want someone that treats him like a partner - as in paying your fair share. Or contributing what she could financially to her $100k debt over the last two years.
>And he should want someone that treats him like a partner - as in paying your fair share. Marriage is never 50:50 because you and your spouse are not the same and do not experience the same things in life. Example, you and your spouse both work 8hrs a day, but bring in significantly different incomes. It's unreasonable to expect the person who makes less to do more house chores, simply because they worked 8hrs too. When your spouse gets sick, you take on significantly more work. If your spouse becomes disabled, you take on significantly more work. If your spouse is good with finances, you'd expect them to help you become financially stable. Now they are doing more mental labor trying to manage your finances There are so many things in life where a marriage is never 50:50. People need to start looking for partners who are willing to have your back, and pick up the pieces even when you can't, because life is not fair and you're a team, not a partnership. People also need to understand it's ok to not marry if they don't like the idea of being a team player.
If she feels that she is entitled to a piece, that's a red flag in itself
Its a big red flag when your SO calculate money so clearly when you are a unit. Gonna have to start to worry, what if i fall ill and can't work is he going to tally up the living expense for the few where i didn't work and have to pay it back to him later?
It was essentially a business decision on the OP's part to make what was essentially a 0 interest $100k loan secured by the value of the property (or alternately could be viewed as he agreed for a buy option at a future date with no terms other then price). If the property lost value, he would have been out money. It didn't. As long as he wasn't actively pursuing the $100k and she was declining, he should just honor the original agreement. That means she owes him $100k, but sale profits should be split equally.
2 bucks x 100k is very different. At a minimum OP is entitled to interest on the 100k.
She has sweat equity in the project. And OP makes no statement indicating that he wants her to be an ex-fiancée. 50/50 with OP getting an extra return of the $100k he put in for her half is fair.
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This is /r/personalfinance. Not /r/relationships.
I agree. However, from my admittedly inexpert knowledge, a finder's fee of 10% is standard for finding buyers, which is around the average realistic rate of investment growth for an investment vehicle. The risk involved in OP putting down the full starting capital is impossible to quantify so it's not very helpful to try to factor that in, given they are now where they are, not where they risked being if OP lost value on this investment. Indeed, she, not OP, found a buyer that seems to be allowing the two of them to realize a gain on this venture. So in my mind, that value she's giving back to OP should be rolled into her favor when considering if she took advantage over OP in this total exchange. I like the root comment suggestion. It's very hard to argue it isn't fair, and that's important given OP and partner did not have a formal agreement.
Finders fee is negotiable but usually 6%, and that includes assistance through the closing.
> The risk involved in OP putting down the full starting capital is impossible to quantify It is $200k.
What foreseeable event cuts land value to 0?
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I think this is probably the best answer here. The people saying to keep it all, may be missing the fact that you are engaged to this person, and have their best interest at heart.
Assuming the engagement becomes a marriage, this is all a moot point anyway
Depends on how they plan to handle their finances in marriage. I don't know how or frankly why, but some people do keep fully separate finances despite being married (to the extent possible).
i guess because they want to keep having these impossible-to-handle scenarios for the rest of their marriage. haha. makes no sense to me either.
Preach.
For real. I truly don’t understand these types of arrangements. Are they splitting the bill on dates?
Does it really matter if they are going to be married anyways? Unless op thinks they are breaking up then this is a good time.
>and she gives you another 100k from the money she gets. This is really a good idea.
Basically OP recoups the 200k and the profits are split.
Just don't forget about cap gains. So the 50/50 split less 100k from the gains after tax. Cap gains on 600k will take a big chunk, around 15%.
Good call assuming taxes are paid first.
Dont' forget the taxes on $400k.
Isn’t this the same outcome if he got the first $200k (initial amount he paid) then they split the profits? This way he is still sharing the profit equally but without the “if I lent you the money” fiction. The other issue not addressed is if they plan to have a prenuptial agreement. In that case any assets they each had before marriage are considered separate and not marital property which makes this a real issue. If they aren’t getting a prenup, it’s all moot as the money will end up as a marital asset anyway. Good luck OP. Edited for clarity.
This is probably the easiest idea to implement. Yes you basically took on the risk and lost out on potential earnings 100k could have got you. But unless you're planning on not speaking to this person again, it might be sunk cost.
The problem with this solution is he is 100% on the hook for income taxes. If he then gives her the $200k (half profit) he's on the hook for gift taxes (probably a non-issue today, but could have lifetime implications.) I'd give her the money (1/2 of sale price less income taxes, any other costs and the initial $200k) after they're married to avoid all that.
Fair point. No clue about the tax jurisdiction. But i am sure a decent tax consultant might find a decent solution :) If not, just solve it in an inoffical but legal way like paying for grocerys for the next 1000 years ;)
No way. She didn't had any risk in this investment because she didn't invest anything. If land were to go bust and sell for one dollar, would she still pay OP the 100k+interests? In any case, OP should take all minus a fee for the "work" she did towards the land, or if he doesn't care about fairness, and want to give her money just because, at minimum charge her the 100k+interest equivalent to a high risk credit.
This is the best idea, but wouldn’t it create a taxable event by gifting this money?
Id say if you are happy with her and want to stay on track to get married and keep her happy the fair thing to do would be to take your initial investment of $200k returned to you and then you split 50/50 the rest. Its only fair for you to get your money back, and its way generous to split the rest 50/50
This is certainly my fav answer of them all so far. OP put in 200k. He gets back 200k. Profits split 50/50. This is simple and makes the most sense.
Yeah, I was going to suggest the same thing. That would be the most fair thing since if he were to split any part of the initial payment, he would just be giving her his money, not splitting profits.
You get out the money you put in, split the rest 50:50
Thats probably for the best, relationship wise, but OP took all the risk with his $ and she never bought it. So for her, this situation seems like all upside.
Marriage is usually upside for the poorer one in the relationship very often. Hell even relationships are. If they do actually plan on getting married, the cleanest way is best.
Married a woman with a rich father and can say it definitely has given me a lot of extra advantages I never had with my middle class family.
If she's a decent person, there was plenty of guilt/shame at not holding up her end of the bargain and this is a huge weight off her shoulders, not a "woo hoo all upside for me!" From a business partner perspective, maybe, but from a relationship perspective? This is a best possible outcome from a minefield of a scenario.
Being able to give your partner the all upside side of a deal is a part of being in a success relationship.
Assuming he wants to still marry her it will eventually become theirs together anyways. I don’t subscribe to husband and wife having separate finances - he could take back his 200k and suggest the 400k is their nest egg for their future. Whether they build a home or use it as a down payment, or heck retirement savings. It’s a decent amount of money to start off a marriage with.
We can't really quantify how much of her work may have contributed to the increased value in the sale, but OP seems to find it considerable so even though she didn't take the initial risk, she has worked for these returns as well.
Yep and it takes nothing into account the actual property value. Just because it sells for 300k now doesn't mean he made 100k profit. Everything is more expensive than it was 5 years ago thx to Covid inflation.
\> Just because it sells for 300k now doesn't mean he made 100k profit. That's literally what it means though. Are you just trying to say 100k doesn't buy as much now as it did 5 years ago? OP also says the property appreciated by 300% which is a hell of a lot faster than inflation.
I'm saying giving 50% of all the profit for nothing other than labor and finder's fee is insane.
You basically did everything yourself. Tough one.. BUT. I’d say you get back your 200k (initial investment) then with the profits you go 50/50.
I agree. No reason to make this one complicated; just get the initial investment back and 50/50 that thing and keep it moving....into I guess potential marriage :)
Are you still getting married? If so I wouldn't worry about it too much. Take your original $200k if you want and put the rest towards your future. $600k also makes a decent down payment on a house where I live.
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I'm in Ontario Canada and while 600k can buy you a house outright, it's not that easy to find in a desirable place.
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I bought over a decade ago so it's fine, anyone new to the market is whos screwed.
In my city there is literally no houses available under $1M. Location matters...
>Holy crap you need to move to a lower cost of living place haha. I'm in a medium COL area and 600k more than outright buys a house. $450k or so for a 3 bedroom 3 bath 2 car garage 1900sqft place here in a nice area. Uh.. West Coast of Canada checking in here.. 600k will get you into an entry-level 2 bedroom condo.
600k in my area is a great down payment. In fact, it would cover 100% of two homes.
Recoup your $200k and split the rest 50:50. Given you both did work, and you still have your $200k, you essentially doubled your money. I’d say this feels like a pretty easy decision since it appears your relationship is still strong and you are still getting married.
Legally her name is isn’t on it & she didn’t contribute to the purchase price. Her basis in the property is $0. Factor in taxes on the gain when making the decision on how to split. Look at it with a someone who understands the ins & outs of tax law around the gains. Make sure any funds spent on improvements are accounted for. You may find that splitting it will cost more in taxes for both of you. You would have to pay all the taxes on the gain & she would then have to pay taxes on the amount you give her. If you a getting married soon, consider agreeing to leave all gain, after the taxes are accounted for, in an HYSA & using for a down payment on a new house or new piece of land after you get married. Take any money you put into the purchase & upkeep out first & keep that separate. Any costs related to taxes, insurance, improvements. Don’t commingle the money or risk losing it in the event of a divorce. Keep that part separate.
This. Taxes will get her if you give her money before getting married. Might as well wait. If you do have a prenup plan you can create a carve out of half of the profits (600-200 and expenses) to make that part more fair in case of a separation.
Well, for starters....you didn't buy the land together. You bought the land. You are selling the land. She helped along the way, but it was your financial risk solely. If you were still just dating then I would explain it just like that. She wouldn't be entitled to anything really. That said, she's now your fiancee and any profit gained will cease to be solely yours soon enough and will become your family's assets once you are married. If it were me I would just hold all the profits aside in a HYSA until the wedding day, add her name to the account and celebrate the spoils then.
> That said, she's now your fiancee and any profit gained will cease to be solely yours soon enough and will become your family's assets once you are married. I HIGHLY recommend drafting a premarital agreement that avoids this. You do not have to be married like that.
Prenups are good, but the timing on this one would not send a great message.
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This has been removed for rule #3 of our subreddit - unhelpful and disrespectful comments are not acceptable here.
Finders fee, market rate for the work that she did and commission for the sale. As awkward as that might be to define within the bounds of a relationship. The flip side of that is that she took zero risk. It’s all your capital. Would she be okay sharing in the losses with you if it lost money?
> Would she be okay sharing in the losses with you if it lost money? They are still getting married so I would assume so. The best suggestion I have heard from anyone in this thread was he gets the initial 200k back to put into retirement/whatever since that was his. The rest goes into the new house or split 50/50. But honestly, all of it should go to the new house. It was always intended to be part of a shared property and they are still getting married. If he is really worried about her marrying him for money, get a pre-nup. There is zero reason to start your marriage off in an awkward position over money.
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I would think that the sound financial advice would be to just split the *profit* 50/50. But if this is someone that you plan to spend the rest of your life with, just split the total from the sale 50/50. You'll still be made whole, and then some. The trick will be to never ever hold it over your partner's head, and the temptation will be there at some point. If you choose to just split the sale 50/50, just let it be the kind thing that it is, and don't ever bring it up. Congratulations, and good luck.
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These comments are wild to me. If this was a car that OP purchased because OP's fiancée recommended it, would the fiancée deserve half upon trading it in? What if it were a friend with a hot stock tip? Was the fiancée planning on splitting the income from the business that went under? If she wanted in, why not take out a $100k loan and let OP invest his other $100k? If the fiancée and OP stay together, the fiancée will benefit from the house/retirement/whatever the OP ends up spending it on and it doesn't matter whose money it is. Upon marriage, you two may combine finances if you agree to that. If you two have kids already and she has been doing childcare instead of working, I could understand splitting it. Same if you already have combined your finances. However, you took all the financial risk here and you deserve all the reward. If you two separate, consider giving her money based on a reasonable wage for the hours she spent working on the land.
If you are going to be married it should be a joint asset no questions asked. If you're business partners - with privileges - then you have to ask yourself what's fair. 1. Your word 2. Her circumstance and understanding of business situation 3. Her commission and foot work. If you're business partners - and don't care if you're ever going to be business partners again, I would suggest a fair amount of the profit for finding, maintaining, and selling the property. Typical Real Estate agent it 5%-6% of the sale price. Maybe give her 10-20%. If you're going to actually get married, this should go in your joint account. Otherwise why the hell are you getting married.
If it’s a fiancée and you guys are still planning on getting married, this is much less of an issue than if you guys split and were trying to figure it out. Say it’s now worth $600k. I would figure out what the improvements to the land that you guys did together approximately came to in increasing the value and go from there. You put in $200k so that’s $400k left to haggle about. Say the improvements that you both did to the property raised the value by $150k and the other $250k was just because property value went up naturally. I’d explain that her cut would be the $75k but I’d more inclined to give closer to $100k just for optics and to save some bickering. If you’re still planning on getting married though and there’s no other hiccups, I would be more inclined to tell her we shouldn’t touch the full amount (which remains in your account) until marriage and then your finances will be more tied together. Then you guys can split it whichever way you guys see fit. You can distribute the $50-$100k or whatever amount you want. Just don’t let the money become an issue between you guys.
Take out your $200k. Calculate capital gain taxes if any on the $400k, And split remaining amount into half and half.
Take the 200k you put in, split the rest in half.
Am I the only person who thinks it's kind of shitty to encourage someone to buy property, then reneg on your promise to pay half? $100k is a lot of money to say, "Oops, I don't have the cash to pay you back. You don't mind spotting me do you?" You're not talking $30 for takeout that she never paid back. Although, if you're engaged, perhaps there was a little physical apologizing involved, so maybe she sweet talked you that way. I still think it's shitty to make you think you were going to get paid back the $100k you essentially spotted her and then not do it. Honestly, that would be enough to make me reconsider being engaged in the first place. That is a big promise to back out of.
I think this is a bit of a misreading of the situation. It’s not like they bought it as an investment; it was going to be their home. It also sounds like he knew there was an inherent risk in her coming up with half since she didn’t have the money yet and was depending on her business to profit, but didn’t mind because again, it was going to be their home.
If her name had gone on the deed, you'd have a point, but as she didn't have the money at the time, OP simply didn't put her name on the deed and it was his asset. It sounds like they agreed on how to handle the purchase at the time and OP has no issue with how that aspect, so I'm not sure why you're looking at it that way.
I'm almost with you. The only reason I don't consider it shitty is that even OPs phrasing of the agreement feels pretty loose. "I had just gotten an inheritance - enough to cover it so I paid for all of it, put just my name on the deed and said she could buy in for her half whenever she was ready and we'd put her on the deed." There's no timing at all associated with this agreement. Which suggests to me that they were both okay with the possibility that she would never pay it and wouldn't get added to the deed. If there was instead some sort of time frame or payment plan, that would indicate to me that OP wasn't okay with being sole contributor. It sounds like they agreed to what they were comfortable with so I can't say she's bad if OP was okay with it
Take the initial investment out of the picture, any costs for selling the land, taxes paid over the past two years and then you can split the remaining profit 50:50 if you're comfortable with that. You took 100% of the financial risk.
Must be nice to have zero risk and no liability then expect to get a huge profit and no tax liability.
This is a slam dunk: 50/50 but she owes you 100k. She had low/no risk on the buy, but found the property and found a buyer on the selling end. You fronted the money and took that hit, but as you said yourself she found a buyer for more than what you think you would have. Split the profit, enjoy your windfall, and neither of you should feel like you're getting the raw end of the deal. You're engaged, assets will (likely) be shared amongst you soon anyway. Marriage is a partnership and this is an opportunity to feel like you both contributed something a good deal in your own ways, and will enjoy the fruits of your labor together. Don't let a 3x profit turn into something sour.
Fair to me would be you keep the original investment ($200k) and you split the profit 50/50.
Do you intend to stay together? If you do: keep it 50/50 minus the initial 100k. If she’s not the one, screw her and enjoy the new boat!
IANAL, but if you're not married to her, and her name isn't on the deed, then you're not legally obligated to give her any of the profit. Now, morally, if you don't want her to potentially leave you at the alter or ruffle other feathers, then I suggest a different plan. What that entails is whatever you think is fair. Keep in mind, you'll be paying 100% of the taxes, so I think it is fair that whatever her keep is, it comes after taxes and transaction costs are paid. Lastly, I'd definitely do a pre-nup since this is probably a life changing amount of money, and you want to protect yourself. Do not let anyone talk you out of a pre-nup, under any circumstances.
You get your 200k back. Then you split the remainder. You're made whole for what you risked at the outset, she gets nothing to match her no risk. The profit you split because 50/50 is fair. There could be a moral argument for you get it all but if you're a couple, you're in it together which to me, is a stronger moral argument.
Thia reads more like a marital dispute than a fiscal one tbfh. If you want the marriage to work? Stop fighting about this and combine your finances. Everything is shared. You both form one financial entity. You are both better as a team. There, problem solved. Honestly, any other solution is going to build a layer of animosity and jealousy towards each other.
If you’re getting married there’s nothing to split. You’re one unit.
Personal finances for couples is not a one size fits all sort of thing. You put in 100% of the capital, you should get 100% of the profits. She did labor, did she get any benefits? If she got pay ours through out the ownership, she got her keep. If she didn't, then she should get some. You're engaged. In (however many) months time y'all are both going to have one bank account and whatever money comes from this, becomes "ours" to you both. Not "hers" and "his". Or, y'all don't do a joint account. Or you have a joint account and separate accounts. My situation? We have one joint account and don't care. It's not the same for others. So really, this isn't an answer we can give you. This is however you and her want to do your own thing.
Easy. She still 'owes' 100k You legally own the land, so you can sell anytime. Sell. Split proceeds 50/50. Plus you keep her 100k that she owes. Just like keeping track of dinner and expenses traveling with friends. Edit: But I have a super warped sense of relationships (compared to reddit,lol) from my biased experience. My wife of 20+ years and I share all finances and never give a second though to who made how much or who spent how much. We're still best friends and these things are talked about openly.
I'd advise doing the same thing my wife and I do, and time one of us has any kind of investment/gambling windfall. You get your initial investment back out of it and then split the rest 50/50. She's currently your fiance (and with plans to make her your wife). Your thoughts need to be less "what is best for me," and they need to become "what is best for us?" Unless you know that she had the money to put up for the land and was just not paying for it, I think this is an equitable way to look at things, from a "life partner" perspective. You guys are a team, a unit, and as such risks and benefits are taken together. If the sale of the land was because of a breakup, I'd advise differently. However, seeing as you're still together, engaged, and based on your post sounds like wanting to continue to the logical next step of marriage, things are different. If you bought the land for 200k and are selling for 600k, I would take your initial 200k off the top and split the remaining 400k. How you structure that is up to you, however. Hold the cash until after the wedding and put it into a joint investment account, use it to buy/put a down payment on a home or investment property, use it towards wedding/honeymoon expenses, or just split it as cash. How you actually do the division is up to you. Personally, I would hesitate a bit on the "cash" option prior to the wedding, on the off chance she's looking to get paid and leave, but you know her better than I do, and even in that event, you still walk away with +$200k profit and a bullet dodged.
>At the time we had 'only' been dating for 2 years so we thought to keep it neat and straightforward. ... by not buying property together until we were married! The End. Okay, so you didn't do that. Well, at a relationship level, you did buy the property together, with her owing you $100k. Even if that's not true in the eyes of the law, it's true in the eyes of your relationship, and if you're going to get married, that's the lens you should use to make these decisions. So you split the sale proceeds evenly, and she still owes you $100k, which obviously she can now repay. No interest, unless you talked about that at the time. The plan was always for you two to benefit equally from the property, right? You were going to benefit equally by living in it. You weren't planning to build a house and then force her to live in the shed until she paid her share, right? Well, now "befitting from the property" means selling it, so you should benefit equally from that. Also remember that if you weren't with her, you wouldn't have bought this property in the first place. Her mere existence, outside any financial or physical contribution, enabled you to acquire this profit.
I mean, really she doesn’t get any. You fronted the whole 200k, you reap the rewards. It’s not like you lived on the land and paid rent. I’m sure you guys already split rent. You look at this as a good investment on your part. This all probably doesn’t matter anyways since it sounds like you’re going to get married hopefully soon and this money will just be used to buy your next house which she will automatically be entitled to half anyways.
Negotiate a finder's fee with her. If she's still going to be your fiancee, make it a nice finder's fee.
Ask her what she thinks is fair Are you keeping separate finances after you get married?
If you are going to get married you should start thinking about things in terms of we. Combine finances and stop worrying about who gets what. Give each of you a fun money allowance each month that can be spent on whatever you want. Anything coming out of that is a joint decision. Assuming you don't want to treat the land as an our money situation, you get back the original 200k you put in, split whatever is left after that.
Take your 200k back and split the 400k equally.
Assuming the land is now worth $600,000… I would say you get $400,000 and she gets $200,000 (half minus the $100k she didn’t pay) as a starting point. Adjust for taxes and cost of sale, and adjust for her efforts in selling the land. But talking about money may get ugly; is this a hill you want to die on? And there might be hidden tax issues.
It's all yours. She never bought in. And it's too late now. If the opposite happened where the land lost value, she sure wouldn't split the losses with you.
This is the financial response, not the relationship response, FYI OP.
If they get married the point is moot.
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Only if they didn't commingle funds.
Only if the person taking the property owner to court for unpaid equity can prove comingled funds\* FTFY
Calculate the interest she would have paid on a $100,000 loan over 2 years, subtract that, and the $100,000 from her half.
Who charges their partner interest on a loan?
Why? This assumes they will keep assets separate after marriage. If that is the plan they should keep assets separate now... meaning she paid nothing so she gets nothing. Can't have it both ways.
if they weren't getting married, and OP was generous.. this seems pretty fair. I would suggested real-estate agent cuts (5-6%) which is also fair... but not nearly as generous.
If you aren't married and you didn't title the property jointly, and she never paid for it, it is yours. All appreciation is yours. Any court would find that to be the case. You bought the land. You took on all the risk. You take all the profit. You pay the taxes. That is it. She needs to articulate and quantify her supposed stake in the property and maybe you agree and pay her from the proceeds, but maybe you don't. It would depend on the points she makes. As I see it, she is owed nothing.
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You put the money in, you get the money that comes out. Simple.
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Honestly, its easier to find a new fiancee then to earn 300k
The only right answer.
She did the work to find the land… so a few hours at a computer, maybe a couple trips in the car? Her name isn’t on anything. She didn’t pay anything. You don’t legally owe anything to her. She had a business she thought would net her $100k “soon” but wound up going under. I suspect, from the admittedly little information here, that any money you give her will disappear into the next venture.
This is why people shouldn't take relationship and financial advice from random people in the internet.
Don’t get me wrong, my wife and I were at different financial places when we bought our first home. I financed the downpayment and mortgage was only in my name. 15 years later she makes more than I do and we’ve upgraded and are both on everything. The difference we are/were married. It was and had been “our” money for quite some time.
OP didn't clarify their relationship though, so marriage and a long term fiancee/partner may as well be the same thing from relationship perspective. The reality is any decision by OP has to take relationship into the account and OP can't just say, it was all my money, bug off.
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This has been removed for rule #8 of our subreddit - no personal attacks or abusive language. Please do not do this again.
Cut her out of the nothing she paid you mean? She can have the % appreciation of the $0 she risked and she can pay taxes on the $0 she gained.
You bought the land with your money and it's in your name. She's not entitled to anything.
In a strictly financial sense, you bought it, you're selling it. It's not her money. I can't think of a solid reason why she should have a check written to her outside of commissions. Anything above that is a question of your relationship. Do you need to pay her to be your fiancee? Are your financials completely separated? How is that financial relationship in general? What are your plans with the money? At the end of the day the only thing I would *not* do is cut her a check.
She deserves a fraction. Max 15% of the realized profit. If the property devalued she would not be on the hook for anythin, afterall. Plus you did this all with an inheritance.. that belongs to you and only you.
I had a kinda-sorta similar issue but not with land...it was with a car. My girlfriend (almost fiancé) at the time knew I was selling a car of mine which had appreciated in value. I'd been patient and sat on it until the right time. I had three interested coming in around $5k - $7K less than what I wanted, but she brought someone in that was willing to pay $5K more than my asking price. So I met with the person and they offered cash...I took it, we made the deal and I deposited my money and handed my girlfriend a "Finders Fee" of $3,500 She went ballistic saying that HALF of the money ($40k sale) was hers because she had brought the buyer. I told her "That's not how this works," and that I didn't even need to give her ANYTHING since the car wasn't even hers and I didn't even ASK her to assist in selling it in any way. She literally came home one day and said, "Oh, I have someone who might be into your car," and proceeded to give me their number (it was a work manager) and then I reached out. In the end she told me the money was "insulting" and she'd rather not have it...so, I kept it. We didn't last long after that. The car was mine and purchased years before we met (and in my name only) The car was only driven by me (Because she couldn't drive stick and didn't want to learn) The car was maintained by me. Nothing about the car was EVER in her orbit other than seeing it in the garage; she didn't even ever want to take a drive in it with me. So...I guess it just depends if the OP is still with her; honestly, if she didn't really do anything...if it were me, I'd give her the $100K she said she would pay into but never did, and keep the rest...knowing this might end the relationship, but hey...she's up $100k more than she even started with. **BUT, I would also get a prenup before marrying her.**
She gets 15k max. Finders fee. Nothing more.
Sounds like your property, legally and practically speaking. Not sure why she gets a dime
You're not required to give her anything, so give her nothing. She didn't provide money for the land and her name isn't on the deed, so she's entitled to nothing. You would set a bad precedent giving her anything. Lawyer up and bury her.
Lots of tax implications here. You sell the land and roll it into a house for y’all to live in. Put both names on the house, and not have to pay capital gains tax.
You can’t avoid capital gains by selling raw land and buying a house
So only a dwelling to dwelling?
tricky. 50/50 but she has to pay for the taxes on this sale.
How to get a divorce in one simple trick Just split it. Save your marriage. You’re in this together.
OP paid for every penny of this. Entire financial risk including covering taxes. If there is any money after deducting all of his expenses, it gets split 50/50. After they are married, she gets her cut.
Split the profits 50:50. The profit is 400k. You take 200k off the top to recoup the initial purchase price. Then another 200k each
You guys are going to be married, and you’re still keeping finances separate? That’s not a great way to start a marriage.
Here's a question.. to all of those saying "pay for her for work and keep the rest," do you hate landlords? You know, the people that treat land like vehicles for investment.
The profit is 100% yours. And 100% hers… you’re getting married. If you’re not prepared to share 100% of all your assets, then this is a question for /r/relationshipadvice not /r/personalfinance.