Charlie Sheen Wants to Buy Homes for Two Ex-Wives

It seems Charlie Sheen so wants four of his children from two ex-wives living closer to him and each other that he is willing to purchase homes for baby mamas Denise Richards and Brooke Mueller in the gated Los Angeles community off Mulholland Drive.

In most circumstances, having kids of divorce living nearby both parents is in the best interests of the children, say some family law attorneys who spoke with AOL Real Estate. In the case of Sheen -- pictured left, fresh out of rehab -- who has had a marital home with Mueller (see 20-plus photos in gallery) on the market for about a year and a half now, the ex-wives might want to take some precautions.

Now, all issues aside with how much more exposed the young Sheen children might be to his alleged cocaine-binging weekends with porn stars who tweet for-mature-audiences-only images from his living room, "when you have small children in elementary school, the closer they live to each parent the easier it is on the children," says marital and family law attorney Roberta Stanley, a partner at Brinkley Morgan in Ft. Lauderdale, Fla.

"When they start first grade, they forget their homework, they forget their book. If you live within a reasonable distance from each other you can just call the other parent and say 'Can I come and pick up the tennis shoes? She forgot them today.'" Under 30 minutes away is what Stanley sees as being within reasonable proximity.

Sheen, a 45-year-old dad to two daughters with Richards (Sam, 5; and Lola, 4) and with Mueller

twin boys, Max and Bob who will turn two in March, is "willing to front the costs of the two houses, plus whatever moving expenses the women incur," reported TMZ. (No word as to what he's doing for his 20something oldest daughter from a previous marriage.)

After Sheen and Mueller split in 2009, they put their 4,179-square-foot Mediterranean-style marital home on the market for $3.697 million, the Los Angeles Times reported at the time. The price of the four-bedroom, four-and-a-half-bath home has since dropped to $3.55 million. It is currently listed with Marty Trugman of Coldwell Banker.

Even though Sheen can't yet seem to unload the 1927-built home, it seems he'd still rather move his exes close to him than into that home. Perhaps that says a lot about his love for his children.

For divorced parents who live near each other, "visitations are a lot more feasible and manageable, and the participation of the children and their parents in school and community activities can also be managed more effectively," says Decatur, Ga.-based psychotherapist Dr. Joyce Morley. "[However], if divorced parents are going to effectively maintain residences in close proximity of each other, for the sake of their children, they must have resolved their anger, internal pain, hurt, and practice forgiveness for and with each other." If not, she says, close living arrangements will be more of a liability for the children than an asset.

If Sheen's exes don't harbor resentment over his shenanigans and choose to bow to his request, his obligation shouldn't end with a purchase and moving expenses, says Stanley. After all, there's a lot of maintenance and property taxes to consider on a larger home that might not fit the budget of these women, but could more easily be afforded by this "Two and a Half Men" TV star. He makes $1.25 million per episode for the CBS sitcom that went on a brief hiatus after Sheen was hospitalized in January and is reportedly now undergoing home rehab following the Jan. 27 party incident where he was carried out of his Los Angeles home on a stretcher and taken to the hospital. The show's production is set to resume Feb. 28.

"There will need to be some agreement where he has some obligation to pay for repairs, maintenance, utility bills, the lawn, and the pool and all the things," Stanley says, adding that however the ex-wives should not have to personally turn to Sheen every time they need carpet replaced or plumbing fixed. "There would be a third party to review those bills to say if they are reasonable. You don't want someone changing wall paper every year."

And then there's consideration of what happens once the kids have grown up and moved out. Although it is possible the ex-wives would just retain ownership of the home, but forgo the maintenance help, that's not as likely as using it to pay for their retirement, she says. "My guess is when the kids graduate high school that they will not retain the residence, but they can sell it."

If the moms can work that out, that would be a pretty good deal, especially if it means putting the households of the mothers on a more equal footing with Dad's. "If Dad has a whole lot of money and a big mansion and you have a little shack," that will have an effect on the kids, Stanley says.

One thing other moms who might find themselves in this type of situation should remember is, "Just because he bought the house that doesn't mean he gets to come in and out." And when we're talking about Charlie Sheen, that phrase could take on more than one meaning.

Sheree R. Curry, who is divorced and lives 20 minutes away from her children's father, is a three-time award-winning journalist who has covered real estate for six years. During her 20-year career, her articles have appeared regularly in the Wall Street Journal, TV Week, and Fortune. She's been writing for AOL Real Estate since 2009 from a Minneapolis-area rental. She seeks a book publisher -- or at least a lender who'll give a reasonable mortgage rate to a self-employed mom.

For more on mortgages and related topics see these AOL Real Estate guides:

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Uncle Sam Wants You. . .to Buy Treasury Bonds

The U.S. Treasury has an unenviable job: It has to find buyers for trillions of dollars in new bonds that are sold to fund each year's federal deficit and replace maturing bonds. It hopes average citizens will pony up and invest hundreds of billions of dollars in newly issued bonds, but that might not be a winning investment for you.

With deficits climbing from $455 billion in 2008 to $1.42 trillion in 2009, $1.3 trillion in 2010 and an estimated $1.5 trillion in 2011, the Treasury's task has become even more challenging.

For context, the current debt owed to "the public" -- which includes foreign bond owners -- and to other federal agencies such as the Social Security Trust Funds, is by the Treasury's own reckoning $14.1 trillion. That's roughly equal to the nation's GDP of about $14.5 trillion.

Even if we discount the interest owed to Social Security, that still leaves more than $9.5 trillion on which interest must be paid every year. According to the Treasury, the interest paid in 2010 was $413 billion. In one of the few positives to this tale, the interest paid on America's external debt did decline to $164 billion in 2010 from $189 billion in 2009 as interest rates fell to historic lows.

This isn't chicken feed, however. The interest paid on the external debt is nearly equal to the budgets of the Department of Veterans Affairs ($52 billion), Housing and Urban Development ($47 billion) and Transportation ($71 billion).

The Treasury's Office of Debt Management recently issued a report outlining the Treasury's plans to find buyers for all those bonds. But it faces a number of fundamental problems.

1. The Treasury' projections of future deficits are grossly underestimated. The report's three estimates for the federal deficit in 2012 -- from primary dealers, the Congressional Budget Office and the Office of Management and Budget -- range from $911 billion to $1.1 trillion. Yet other reports from the Obama administration project that the 2012 deficit will reach $1.6 trillion.

This sort of low-balling of future deficits weakens the credibility of the Treasury's report, and suggests that the amount of bonds it must sell will be far greater than presented.

2. Today's historically low interest rates won't last forever. Right now, the yield on a one-year Treasury bond is a meager 0.27%, and the yield on a three-year bond is a modest 1.04%.

Given that inflation is, by some authoritative estimates, running at about 2.5% in the U.S., and double that in other major economies such as China, investors in those three-year bonds are losing capital every year they hold them.

Rising inflation isn't a flash in pan, either: Wholesale prices are increasing, which guarantees future price jumps in retail goods.

How long can the Treasury find buyers who willing to lose money on U.S. bonds? Probably not long. That may be why the yields on long-term Treasurys have been climbing steadily in recent months. The yield on the 30-year bond, for example, has risen from 3.71% last October to 4.75% this month -- a jump of 27% in less than a year.

3. If the Treasury has to pay higher interest to entice buyers, it will. At that point, the interest paid by the federal government will rise sharply.

The Treasury already estimates interest payments will reach $800 billion by 2020 -- and that's assuming rates stay at rock-bottom levels.

Higher interest payments will inevitably crowd out other federal spending. If we set aside the overly rosy forecasts and assume a structural deficit of $1.5 trillion annually for the next four years, then by 2015, the national debt will be over $20 trillion, and the external debt will be over $15 trillion. Even at a modest average yield of 5%, the interest on that $15 trillion would be $750 billion a year, dwarfing both of the government's biggest programs, Social Security ($695 billion) and the Department of Defense ($663 billion).

4. The Treasury remains dependent on foreign buyers. While the Federal Reserve's $600 billion quantitative easing program of buying Treasurys, known as QE2, has boosted the Fed's bond holdings above those of China (the Fed holds over $1 trillion compared to China's $877 billion), as this chart depicts, the Treasury still depends heavily on foreign buyers.

Should foreign buyers balk at today's low yields, the Treasury would have to raise interest rates to lure them back. Counting on the Federal Reserve to snap up another trillion or two of Treasurys is also an iffy proposition because some Fed board members are already talking about trimming the purchases of U.S.bonds. The QE2 program is slated to end this June.

5. There's heavy competition from other governments issuing their own sovereign debt. Developed nations around the globe are issuing unprecedented quantities of new bonds to fund their deficits. The Bank of International Settlements issued a report last year, The future of public debt: prospects and implications, which outlined the extraordinary demands that government borrowing will place on the global bond markets. The report also noted that interest rates are rising globally in response to heavy sales of sovereign debt.

U.S. Treasurys, in other words, will have to compete with many other nations' debt for buyers. And as populations age around the world, the Bank of International Settlements expects government deficits to skyrocket. Given the trillions of dollars in new bonds governments will be issuing globally, it doesn't take much imagination to foresee a world in which rates could rise far more rapidly than the Treasury currently expects.

The Solution Is You

The Treasury's answer to its need for future buyers is to turn to potential domestic purchasers: banks, pension funds and you, the so-called retail buyer of U.S. bonds. The Treasury is hoping to sell American citizens some $337 billion in new bonds over the next few years, along with $525 billion to insurers and pension funds and a whopping $1.675 trillion to banks.

Would it be wise for investors to buy bonds yielding 1% when inflation is clipping along at 2.5%? Can pension funds and insurers meet their future obligations by earning 1% or 2%? Is it wise to gamble on future inflation being tame by buying long-term bonds? If inflation rises, the market value of those bonds would drop significantly.

All in all, the Treasury seems to be grossly underestimating future deficits, future inflation, future competition in the debt market from other governments, the possibility that foreigners will no longer be big buyers of U.S. debt and the willingness of potential domestic investors to ignore these critical issues.

View all Articles » Charles Hugh Smith has been an independent journalist for 22 years. His weblog, www.oftwominds.com, draws two million visits a year with unique analyses of global finance, stocks and political economy. He has written six novels and Weblogs & New Media: Marketing in Crisis and just released Survival+: Structuring Prosperity for Yourself and the Nation.

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