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A tricky joint account

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Dear Dave,

I’m getting married soon, and we plan to open a joint checking account. Keeping a register accurately will be difficult because I travel 2 weeks per month. Do you have any suggestions for keeping track of things, or should we just rely on online access to the account?

–Ed

Dear Ed,

I would set up a second checking account, one to which you both have access, that’s only for travel. Giving you both access allows you to track what you do and her to see what’s going on and act as your backup when it comes time to balance the register.

Here’s an example. A few years ago we were remodeling our home. My wife and I opened a separate checking account and put all of our remodeling money in there. It was easier to keep the money separate, but we both had access and were involved in the account. 

Understand, this wasn’t a “his” and “hers” arrangement. It was merely for the purposes of keeping our everyday activities separate from the remodeling budget. When you get married the preacher proclaims you as one. That means throughout life and everything involved, including your finances! 

–Dave

Don’t use a land contract

Dear Dave,

What’s your opinion on buying a house on a land contract?

–Keith

Dear Keith,

I would never, under any circumstances, ever buy a property on a land contract. 

In some places this kind of thing is called a “contract for deed,” but the problem is you don’t have the deed. The property is not in your name. You could easily run into a situation where you’ve paid the balance down for 10 years, then the guy you’re paying gets into a car wreck or another kind of financial trouble and someone slaps a $500,000 lien against the property that’s supposed to be yours.

Don’t pay for property that isn’t in your name, Keith. Land contracts, or contracts for deed, are dangerous for the buyer and just plain stupid!

–Dave

Co-signer passed away

Dear Dave,

My father co-signed for my niece’s student loans, and recently he passed away. My mom didn’t sign for the loans, but would she be held responsible now?

–Denise

Dear Denise,

I’m really sorry to hear about your dad. But no, your mom is not on the hook for the loans. Your dad’s estate could be held responsible though.

When you die, what you own stands good for what you owe. So anything he owned – perhaps his and your mother’s home – would have to stand good for it. This means that while your mom isn’t liable, the student loan would have to be cleared as if it were a normal debt in order for your mom to keep, free and clear, any of the stuff your dad owned.

There’s another possibility also. Federally insured student loans do not count against your estate when you die. If you pass away or become permanently disabled, the loan is forgiven. I believe that’s true for co-signers as well, but make sure you check into the situation carefully. We’re talking about the federal government, and they don’t usually operate in the realm of common sense!

–Dave

Dave Ramsey has written four New York Times best-selling books: “Financial Peace,” “More Than Enough,” “The Total Money Makeover” and “EntreLeadership”. The Dave Ramsey Show is heard by more than 6 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the Web at daveramsey.com.

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