Where to get basic guidance about money
Dear Liz: I am embarrassed to ask this, but I desperately need some very entry-level advice about money. Growing up, I never paid attention to finances. Now married for more than 30 years, I am still in the same situation. I don’t know anything about mortgages (including all those papers I signed with my husband), investing or, probably most important, retirement. Where should I start? Remember, I don’t even know financial lingo, terminology, anything. And now that I am older, I would appreciate some guidance.
What book would you recommend for the person who knows absolutely nothing about finances? Life scares me at this point.
Answer: Please don’t be embarrassed about your situation. You’re recognizing you need help — and asking for it. You’ll be far better off than the spouses who let their partners handle everything and then find themselves adrift because of death or divorce.
An excellent place to start is financial planner Eric Tyson’s book “Personal Finance for Dummies.” It’s an easy-to-read, entertaining book that assumes you’re starting at square one. Once you’ve got that under your belt, you might want to tackle the book Tyson wrote with retirement expert Bob Carlson, “Personal Finance for Seniors for Dummies.”
Another terrific book, from a woman who also started at square one (after losing a small fortune to her husband), is Barbara Stanny’s “Prince Charming Isn’t Coming: How Women Get Smart About Money.”
Don’t worry that you don’t understand what they’re shouting about on financial TV and radio shows. Most of it is nonsense anyway.
You also should talk to your husband about finding a financial planner who can work with both of you to ensure your retirement planning is on track. Even die-hard do-it-yourselfers would benefit from an independent review as they approach retirement, and you can find referrals to fee-only financial planners from the Garrett Planning Network at https://www.garrettplanningnetwork.com and the National Assn. of Personal Financial Advisors at https://www.napfa.org.
An executor’s obligations
Dear Liz: I was concerned about something you wrote recently about the responsibilities of an executor — that he or she can be held personally responsible for settling an estate. I am listed as executor of my mother’s estate. She lives with my sister, has no assets other than a car she owes money on and an $11,000 credit card debt. Would I have to pay this balance if she dies owing it?
Answer: You misunderstood. An executor can be held personally responsible for mistakes made in settling an estate. But if you follow the procedures laid out by your state’s probate court, you shouldn’t have a problem.
When your mother dies, you’ll be required to make an inventory of her assets (the car) and her debts (the car loan and the credit card balance). Any assets must first be used to pay her creditors, with the order determined by state law. If her car loan is worth less than her car, for example, the car typically would be sold, the car loan paid off and any remaining equity used first to pay the costs of settling her estate and her funeral expenses. If there’s money left over, it would be used to pay as much as possible of the credit card balance (assuming there are no other debts that would take priority, such as federal or state tax debt).
If there isn’t any money left to pay creditors, on the other hand, you simply inform them of that fact and they have to write off the balance as bad debt. You aren’t personally responsible for paying your mother’s debts, unless you cosigned on a loan or are a joint account holder on a credit card.
Where you might run into trouble is if you ignore your state’s laws, sell the car and pocket the difference or distribute it to other heirs. You also run into trouble by paying one creditor ahead of another in violation of state law. Because you can be held personally responsible for mistakes made in settling the estate, it would be smart to get an attorney’s help.
Liz Pulliam Weston is the author of the book “Your Credit Score: Your Money and What’s at Stake.” Questions for possible inclusion in her column may be sent to 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or via the “Contact Liz” form at https://www.asklizweston.com. Distributed by No More Red Inc.
