Friday, April 28, 2006

Protecting Your Ass...ets

Over the last three months attending business classes at Assets Toledo, located at 1946 N. 13 Street, Suite 437, I discovered interesting facts about business, networking and relationships.

On one particular day the class discussed the dangers of moving in with a partner and not having financial perspicacity.

For richer, for poorer, for better, for worse: it may sound romantic but few couples discuss the financial implications of married life before walking up the aisle. Debt is a real passion-killer. It is imperative to discuss financial issues before eloping or you'll be gaining a life partner along with a host of unwanted bills, overdrafts and credit card debts.

Please don't mistake the debt I'm referring to as just credit debt. If debts spiral seriously out of control it can cost your savings, your business and even your own home to vanish in thin air.

And it's not just the newly-webs that have to watch out for this repeated pattern. Anyone who plans to move in with a partner should take into consideration how their pockets will be affected if the other falls into debt.

Now before you scream, "Cancel the cake and send the dress back in a coffin!" there are some simple steps you can take to secure your financial health from even the most unsavvy, financially inept spouse.

The number one tool is to protect your own assets. Assets are useful or valuable qualities, persons, or things; an advantage or resource. Any bank account, savings, property or equity that is in your name is legally yours. In the event that your spouse runs into serious financial difficulties, the creditors can't pursue you for this money. This applies to debt run up from before your marriage as to any during it.

If you have a bank account that has been open for up to five years in your name, your salary is paid in every month, your money is safe. If, however, it was a joint bank account that was simply transferred into your name a couple of months before your partner files for bankruptcy, then expect legal proceeding. Understand that Creditors will try to grab assets that are legally theirs. If you can prove that the assets you owned were purely by your own means, or gifted to you before your partners financial debts, then creditors have absolutely no legal right to grab those assets.

Again if one spouse has run into severe financial problems, such as filing for bankruptcy, creditors can legally go after these joint assets. But they are only entitled to that person's share of the assets. So, for example, if you have a shared savings account with $5,000 on deposit, creditors could apply to receive half of this. The same applies to property. If the home is in both partners' names, then creditors are only entitled to 50 per cent of the property's value, even if the outstanding debt is far greater than this amount. Of course, this often means that couples are still forced to sell the family home to pay this share of the debt.

There are many businessmen who put property solely in their wife's name, in order to protect the family home if the business fails. But if you consider doing this- remember the property then belongs to just one partner. Think about carefully about going with this action in case of a divorce in the future.

Terry J. Snipes

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