Creating and Sticking With a Budget Needs to Be Province of Both Spouses
Q My wife and I have two children and own a home. I pay all the bills and my wife does all the shopping for the home. Every month she spends thousands of dollars more than I make. We have next to zero savings and are running deeper into debt. I tell her to budget, but she says she doesn’t know how and needs someone to show her. Where can I find someone who will teach her how to budget? I’m willing to pay for the services because it will be cheaper in the long run.
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A Budgeting isn’t something just one person in a marriage can do. You both need to be involved in the process.
Presumably, you also don’t know how to budget or you would teach her yourself. The solution is to attend classes together on budgeting or to hire a financial planner who can review your situation and offer suggestions. You can find free budgeting classes at your local Consumer Credit Counseling Service. You can locate a planner using the information at https://www.latimes.com /finplan.
Your wife may have no idea how far out of whack her spending has become. Because she’s not handling the bills, it might be difficult for her to visualize how much money is going out the door.
Her overspending could be a symptom of other problems, of course. Olivia Mellan’s book “Overcoming Overspending: A Winning Plan for Spenders and Their Partners” (Walker & Co., 1997) might be helpful for both of you.
Consistency in Names
Q I recently got a notice from the IRS saying I had to change my last name to my husband’s if I wanted to file our taxes as a married couple. I went to the Social Security office as the IRS suggested and did so, but I think this is outrageous. I should be able to retain my family name! Who gave the IRS this authority?
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A No one, and if you take another look at this notice, you’ll find you’re getting your feathers ruffled unnecessarily.
The IRS is trying to reduce fraud by requiring that the names and Social Security numbers on tax forms match the names and numbers kept by the Social Security Administration. Using one name for Social Security purposes and another for tax purposes could cause the IRS to reject your return, or to refigure it without your deductions and exemptions, which would probably lead to a higher tax bill.
You needn’t change your name--just make sure you use the same name with both agencies.
Estate Tax Advice
Q My husband and I are permanent residents but not citizens of the U.S. We had a living trust created by an attorney in 1993 that’s designed to create another trust when one of us dies. This second trust is supposed to save on estate taxes. Recently we read on a probate-avoidance Web site that the IRS does not allow noncitizens to participate in these kinds of trusts. We consulted another attorney who specializes in living trusts. He said our estate plans were fine and that the information we got on the Internet was wrong. When we contacted the Web site again, they insisted our attorneys had given us incorrect information and that the IRS will reject our trust. Can you help us in this dilemma?
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A You don’t really have a dilemma. You have two presumably knowledgeable attorneys who seem to have given you correct information and someone running a Web site who seems to be either aggressively ignorant or deliberately trying to mislead you.
It’s true the rules of estate planning are different for noncitizens. You are allowed to leave a spouse who is a citizen an unlimited amount of money without paying estate taxes, because the assumption is that Uncle Sam will collect his due when the second spouse dies. The worry with noncitizen spouses is that they would take the money back to their home countries and the government wouldn’t get to collect when they die.
But you can still pass money to a noncitizen spouse through what’s called a qualified domestic trust, or QDOT. The estate tax that would otherwise be assessed is deferred until the noncitizen spouse dies. (It doesn’t matter that you’re both noncitizens. The QDOT works whether the first spouse to die is a citizen or not, said Burton A. Mitchell, an estate planning attorney with Jeffer, Mangels, Butler & Marmaro in Los Angeles.)
QDOTs are complicated and must be drafted correctly, otherwise estate taxes will be due on the first death. It’s smart to seek out an attorney who is a certified estate planning specialist to draft these documents. If the attorneys you consulted weren’t such specialists and you’re still worried about the validity of your documents, you can contact your local bar association for a referral to someone who is.
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Liz Pulliam Weston is a personal finance writer for The Times and a graduate of the personal financial planning certificate program at UC Irvine. Questions can be sent to her at liz.pulliam@latimes.com or mailed to her in care of Money Talk, Business Section, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012. She regrets that she cannot respond personally to queries.
