Having control of cash isn’t child’s play
DEAR BRUCE: My friends encourage their son to save money by matching what he saves. I think it’s a good idea, but are there any rules governing this? Is there a limit as to how much I can match? Is it OK if he wants to take money out when he wants? Is there a time limit on how long the account can be open? — Reader, via e-mail
DEAR READER: My first concern is putting an account in the child’s name. I have said for many years that I think it’s a bad idea putting money in a child’s name, since you don’t know, while they’re young, what their behavior will be later in life, like in their teens. They can get at the money unless it’s in trust for them. Even then, when they reach the age of legal maturity, usually age 18, they can ask for the money. While encouraging children to save has merit, I don’t know that I would go that route. Please consider finding a way of doing this without giving the youngster control of the money at 18. This could be a serious problem.
DEAR BRUCE: My mother is getting up in years. She does not have a will, and told my sister and I that she was thinking of not having a will since we get along so well. She has a few possessions and didn’t want to spend the money on an attorney. Is there a way to get a will without getting an attorney involved? — R.T., via e-mail
DEAR R.T.: Everyone should have a will! Everyone! Even if it never gets probated it should be there in case it’s necessary. A will, unlike some other documents, cannot be repaired once it comes into force because it only becomes a viable document upon the death of a testator. And while you see advertisements on television and in periodicals about will kits, it’s worth the money to get it done right. It can prevent a lot of problems after she dies.
DEAR BRUCE: I find your columns wonderfully helpful and read them carefully whenever they appear. In a recent column, you dealt with a woman who was on the hook because she is still on the mortgage, although her husband now owns the house. What else could she have done? If she pays and he doesn’t ,and she winds up paying everything, does he still own half the property? This seems to be a common situation lately. — Reader, via e-mail
DEAR READER: Divorces can cause serious financial conditions that cause havoc in people’s lives. In cases like this, the lender still holds both parties responsible for the mortgage unless one buys the other out and changes the names on the mortgage. There is nothing one can do to protect himself or herself in the event that you agree to give up your interest in the property, interest meaning ownership. If one spouse pays and the other doesn’t, the less responsible spouse still owns half of the property. Your observation is correct. Thousands and thousands of people get hammered because of this and because many attorneys fail to advise their clients that even though a divorce decree assesses responsibility, a mortgage lender is not legally obliged to give up its rights because of the decree.
Interested in buying or selling a house? Let Bruce Williams’ “House Smart” be your guide. Price: $14.95, plus shipping and handling. Call: (800) 337-2346. Send your questions to: Smart Money, P.O. Box 2095, Elfers, FL 34680. E-mail to: bruce@brucewilliams.com. Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.
