Jewish World Review April 10, 2000 / 5 Nissan, 5760
Married couples should share windfall
DEAR BRUCE: I am coming into a relatively small inheritance of $50,000. Our worth is $500,000, and we are in our 40s. My husband makes a great deal more than I ever have or will, and he handles the money with everything in both of our names.
Since he is used to controlling the money, this inheritance is creating a difficulty, because I would like to keep it in my name only and decide what to invest in. I will not squander this money; it will be put to good use.
My husband has plans with the money that involve mixing it with our household money that he controls. He is a very good husband, but he is angry because I want to keep the money separate even though his paycheck is considered "our money."
Am I wrong? If not, how should I invest this money? -- A READER
DEAR READER: I am on your husband's side. In the absence of a prenuptial agreement or a similar instrument, the inheritance received when married becomes joint property.
Another approach might be that you and your husband would have to agree on whatever vehicles are to be used. You would agree ahead of time that if either side says no, that the money does not get spent or invested there.
The idea of separate money, unless he has his own separate accounts, is not a smart move in terms of the viability of the marriage.
DEAR BRUCE: I am trying to buy a house through a foreclosure auction. To do this I have to qualify for a loan, as the cash is due on the spot if I win.
If the property sells for $100,000 but is worth $125,000, can we value the property at $112,500? If I am the winning bidder, then I have to pay a big part of the money to keep from paying part of the 20-percent equity I need to qualify for a down payment with no PMI.
Is it the bank's discretion on the down payment? I am trying to get the house for little or no money down. -- B.D. (e-mail)
DEAR B.D.: Lots of luck. If you buy the house at the auction for $100,000, that's the value, irrespective of property assessments or any other indicator. The strongest indicator of value is a recent sale. You will still have to come up with your own $20,000 with a maximum mortgage of $80,000.
DEAR BRUCE: I am 44, I have three children, and I purchased whole life insurance for each of them when they were born. The oldest is now 12 years old; the youngest is 5.
My wife and I think that we could do better than these current policies by cashing in each of the $10,000 policies and investing the premium payments into a mutual fund. We also have had EE U.S. Savings Bonds since 1986 ($100 per month by payroll deduction) and are planning to cash in the matured bonds to contribute to the mutual funds.
I have low-cost life insurance coverage of $2,500 per child by my employer, and we plan on advising our children to buy term life and invest their income when they turn 18. Does this plan seem sound or does it need rethinking? -- S.E. (e-mail)
DEAR S.E.: I think that you are doing just fine. In my opinion you have made a few mistakes, such as buying the savings bonds, which pay short-term interest on long-term investments. Getting those dollars into some other vehicle makes a great deal of sense. I have no problem with your canceling the whole life insurance and investing the money
Send your questions to JWR contributor Bruce Williams by clicking here. (Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.) Interested in buying or selling a house? Let Bruce Williams' "House Smart" be your guide. (Sales of the book help fund JWR).
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04/05/00: Beating the look-back period
04/04/00: Providing for retirement
04/03/00: Readers disagree on time shares
03/30/00: The road back to good credit
03/29/00: Pre-tax dollars in IRA taxed later
03/27/00: Gambling on business ventures
03/22/00: Old cars as hobby, not investment
03/20/00: Tax on foreign gifts?
03/16/00: How to buy government bonds
03/13/00: Buying treasury instruments
03/09/00: Subcontractors must pay S.S.
03/08/00: Real-estate lawyers are essential
03/07/00: Don't expect compensation for ideas
03/06/00: Too rich for a Roth IRA?
03/01/00: Is time-sharing a scam?
02/29/00: Paying for nursing-home care
02/28/00: Rely on a real-estate lawyer
02/23/00: Keeping child's money safe from divorce
02/16/00: Just how important is a 401(k)?
02/14/00: Shaky partnership buying house
02/11/00: Protection by residential zoning
02/09/00: Benefiting from a reverse mortgage
02/07/00: Ensure your insurability
02/04/00: Absurd community zoning laws
02/02/00: Money or securities?
02/01/00: Can we KO a custodian?
01/31/00: Why sell a home you love?
01/26/00: Everyone needs a will
01/25/00: Will splitting stocks affect rollover?
01/24/00: Should early retirees contribute to SEP?
01/21/00: Strategies for paying off debt
01/20/00: Is 15-percent growth achievable?
01/19/00: Selling a second home
01/18/00: Running from a time-share
01/14/00: Don't be a spendthrift!
01/13/00: Who gets the house?
01/11/00: It all depends on size of estate
01/06/00: Check references before hiring an advisor
01/04/00: Savings bonds a bad investment
12/31/99: Out of state ain't that great
12/29/99: Warranty rip-offs
12/27/99: Checking up on investment handlers
12/23/99: Options good only when company's strong
12/20/99: Capital gains tax sometimes best
12/17/99: Don't give up your nest egg
12/15/99: Small-claims court no panacea
12/13/99: Termite company not liable for termites?
12/10/99: Services provided must be paid for
12/06/99: How do we minimize house-sale gain?
12/06/99: Maximize your tax shelter!
12/02/99: My neighbor won't maintain even a modicum of civility
12/01/99: Long-distance rentals a bad idea
11/29/99: Mortgage strategy A-OK
11/18/99: Students can work and learn
11/16/99: Value is what will sell
11/11/99: Y2K: No big deal for real estate
11/08/99: Real life is tough luck
11/03/99: The right time to cash a savings bond
11/01/99: Slow road for savings accounts
10/29/99: What do you want from insurance?
10/27/99: You have a right to see your tax forms!
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10/20/99: Love, honor -- and separate credit
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10/15/99: Property lien prevents trade
10/13/99: Clear up debt, only then tie the knot
10/11/99: If it ain't broke...
10/04/99: Should I stick with the company IRA?
10/04/99: Get a financial education!
10/01/99: Insurance: Not much one person can do
09/30/99: Lost tickets are lost cash
09/29/99: Trusting only one financial planner
09/27/99: Adult children should help out
09/24/99: Tips for first-time home buyers
09/21/99: Use the rule of 72s!
09/17/99: Legal strategy can be a pain
09/15/99: Teen drivers drive up insurance
09/13/99: Always use an attorney!
09/10/99: Whose taxes are they, anyway?
09/08/99: How do I roll over my 401(k)?
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08/30/99: Beware of shady viatical investments
08/26/99: Landlords vary on security deposits
08/25/99: Educational IRAs must be spent on education
08/23/99: Finding out the value of old stocks
08/20/99: How to get an FHA refund
08/19/99: 100 percent financing is a scam
08/16/99: Will I have to pay a capital gains tax?
08/16/99: Thinking about PMI
08/13/99: Short-term mutual funds a-OK
08/11/99: It's your job to shop around
08/10/99: Sometimes, roots need to be uprooted
08/09/99: 'Pre-approved' doesn't mean a thing
08/06/99: Only you can determine your investments
08/04/99: Bank IRA the lowest-risk option
08/03/99: Reverse mortgages good for the elderly
08/02/99: Get the survey BEFORE you buy the house!
07/28/99: Get a lawyer -- it's worth it!
07/27/99: If it ain't broke...