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Am I liable for my spouse's debts?
I'm marrying someone with bad credit. How will this affect me?
Should I be investing more aggressively?
I don't know much about investing. Should I let my husband make the decisions?
I'm about to get married. Should I adjust the asset allocation in my 401(k) to take my husband's investments into account?
I'll be changing jobs next month, and I'm pregnant. Will I qualify for health insurance coverage with my new employer?
My employer says that after my child is born, I have to come back to work in six weeks. But doesn't the law say that I'm entitled to three months of leave?

Am I liable for my spouse's debts?

Answer:
The general rule is that spouses are not responsible for each other's debts, but there are exceptions. Many states will hold both spouses responsible for a debt incurred by one spouse if the debt constituted a family expense (e.g., child care or groceries). In addition, community property states will hold one spouse responsible for the other's debts because both spouses have equal rights to each other's income. Also, you are both responsible for any debt that you have in both names (e.g., mortgage, home equity loan, credit card).


I'm marrying someone with bad credit. How will this affect me?

Answer:
You are not responsible for your future spouse's bad credit or debt, unless you choose to take it on by getting a loan together to pay off the debt. However, your future spouse's credit problems can prevent you from getting credit as a couple after you're married. Even if you've had spotless credit, you may be turned down for credit cards or loans that you apply for together if your spouse has had serious problems.

You're smart to face this issue now rather than wait until after you're married to discuss it. Attitudes toward spending money, along with credit and debt problems, often lead to arguments that can strain a marriage. Order copies of both of your credit reports from one or more major credit reporting bureaus. Then, sit down and honestly discuss your past and future finances. Find out why your future spouse got into trouble with credit.

Next, if there is still outstanding debt, consider going through credit counseling together. Credit counseling may help your future spouse clean up his or her credit record and get back on track financially. One nonprofit organization, Consumer Credit Counseling Services (CCCS), sponsors money management seminars that can help you plan your financial life together. CCCS can also help you negotiate with creditors and can set up a budget you both can follow to pay off outstanding debt. Look in your telephone directory for the number of a local office. Be aware, however, that CCCS is paid for by lenders. Once it starts negotiating for you, your creditors will withdraw any lines of credit you have, including overdraft protection.

Finally, seriously consider keeping your credit separate, at least until your spouse's credit record improves. You don't have to combine your credit when you marry. For instance, apply for credit by yourself instead of applying for joint credit after you're married. You can have separate "associate" cards issued for your spouse to use. Even if your spouse has bad credit, your credit rating will remain unaffected. However, keeping separate credit can be complicated. For one thing, your spouse may resent that you control all of the credit in the household. It's also possible that you'll have a harder time qualifying for loans (e.g., a mortgage) alone than if your spouse's income could also be counted.


Should I be investing more aggressively?

Answer:
There's no way to know the answer to that without reviewing your individual circumstances and financial goals. However, if you are investing too conservatively, it can have a profound effect on your long-term financial security. That's particularly true for women. According to a U.S. Department of Labor study ("Women and Retirement Savings," October 2008), women often start saving later, save less, and invest more conservatively than men, which decreases their chances of having enough income in retirement.

How you should be investing depends on many factors, such as: 1) How able are you to tolerate risk? 2) How soon do you hope to achieve your financial goals? 3) How much will you need to save for important goals such as retirement? 4) What rate of return would you need to try to reach your goals? and 5) Is income, growth, or safety most important to you?

If you wonder whether you're invested appropriately, the first step is to get some answers to those questions. You don't have to become a financial expert to develop a solid investment plan. Even many highly paid executives are often uncertain when it comes to money questions, and seek out expert help to get those questions answered.

Reluctance to invest in the stock market is often the result of financial illiteracy, according to a 2010 Library of Congress study prepared for the Securities and Exchange Commission ("Behavioral Patterns and Pitfalls of U.S. Investors"). If that's true for you, becoming more knowledgeable about investing basics and understanding how they apply to you is the first step toward having a sound financial plan.


I don't know much about investing. Should I let my husband make the decisions?

Answer:
Even if your husband is a financial expert, it's a good idea to at least understand investing basics. For one thing, because women on average tend to live longer than men, the odds are extremely high that you could be responsible for making your own financial decisions at some point. If you suddenly had to make all the decisions yourself--and many women have found themselves in that position--you'd benefit from knowing enough to protect yourself from fraud and/or communicate effectively with a financial professional.

Also, even if your spouse is more knowledgeable about finances than you are, understanding enough to consider the pros and cons involved in an individual financial decision can often produce a better outcome; it forces both of you to address questions you might not have considered otherwise. Knowing why a decision was made can help minimize second-guessing on either side later.

If you disagree about a particular investment, remember that though diversification doesn't guarantee a profit or prevent the possibility of loss, a diversified portfolio should have a place for both conservative and more aggressive investments. There may be ways to accommodate both spouses' concerns, and a neutral third party with some expertise and a dispassionate view of the situation may be able to help you work through differences.


I'm about to get married. Should I adjust the asset allocation in my 401(k) to take my husband's investments into account?

Answer:
That depends on several factors. Perhaps the first step is to make sure your existing asset allocation is appropriate for your circumstances; if you haven't reviewed it in several years, you should probably take a fresh look at it, whether or not you intend to consider his assets in your investing strategy. Assuming your allocation is appropriate for your current situation, you may want to make sure that any overlap between your accounts doesn't create a portfolio that's too heavily concentrated in a single position. For example, if you have received company stock as part of your compensation plan for many years, you might not have enough diversity in your portfolio; if both of you have worked at the same employer, the problem could be even worse.

However, you don't necessarily need to make dramatic changes right away. No matter how compatible you might be, marriages have been known to fail, and sometimes they fail in a shorter time frame than anyone ever expected. If you do decide to make adjustments, remember that you can phase them in gradually to create an asset allocation strategy that includes both portfolios. For example, you might decide to simply allocate new money to a different investment or asset class rather than shift existing assets.

Explain to your husband why you've chosen to invest as you have; you may have a perspective he's overlooked or information he hasn't considered that could be helpful even if you manage your portfolios entirely independently. And since it's your account, you have the final say. If there's a difference in your investing philosophies, a neutral third party with some expertise and a dispassionate view of the situation may be able to help work through differences; that can be especially valuable in cases where substantial assets are at stake.


I'll be changing jobs next month, and I'm pregnant. Will I qualify for health insurance coverage with my new employer?

Answer:
That depends on several factors. If your new employer offers a group health insurance plan, the federal Health Insurance Portability and Accountability Act (HIPAA) may apply. This act prevents your new group health plan from treating your pregnancy as a pre-existing condition if you were covered by group health insurance through your previous employer. But read your new policy carefully. Although most health plans cover maternity care and pregnancy, in some instances the health plan offered by your new employer may not include such coverage. Unfortunately, you won't qualify for the protection offered by HIPAA if you had an individual (nongroup) health policy or if you had no health insurance at all.

Even if your new employer's group plan includes pregnancy and maternity care, you may be subject to a waiting period before you become eligible for coverage. So, if you need prenatal care during this period, you may need to pay for the doctor's visits out of your own pocket. Remember that you may need more care near the end of your term. You may be able to continue health coverage through your previous employer under the Consolidated Omnibus Budget Reconciliation Act, but you'll have to pay the full premiums yourself.

Of course, your new company may not provide health insurance coverage, in which case, you'll probably have to shop for individual health coverage. The Patient Protection and Affordable Care Act requires that health plans in the individual and small group market (that are not considered grandfathered plans) offer minimum essential health benefits including maternity and newborn care. And, if you can't find an individual health insurance policy that will cover you at an affordable price, you can shop for and purchase a health insurance plan that will cover your pregnancy through either a state-based or federal health insurance Exchange Marketplace.

So, before you take a new job, make sure that you understand the coverage and eligibility requirements of your new employer's health insurance plan. Plan carefully for the protection of your health and the health of your baby.


My employer says that after my child is born, I have to come back to work in six weeks. But doesn't the law say that I'm entitled to three months of leave?

Answer:
The law you're referring to is known as the Family and Medical Leave Act (FMLA). It entitles you to take up to 12 weeks of unpaid leave to care for your new child, but only if you work for a covered employer and meet certain eligibility criteria. Under this law, while you're on leave, your employer-sponsored health insurance benefits are protected, and your employer must return you to the same job or a similar job when you come back to work.

You may be covered under the FMLA if:

  • You work for a private company that has 50 or more employees, or you work for a public school or agency that has less than 50 employees, and
  • You have worked at least 12 months (not necessarily consecutively) for that employer, and you have worked at least 1,250 hours during the 12 months immediately preceding your FMLA leave start date
Even if you are covered by the FMLA, your employer can require you to use any vacation days, sick days, or personal days you've accumulated in place of unpaid leave time. For instance, if you've accumulated two weeks of vacation time, your employer can ask you to use those weeks first, before giving you an additional 10 weeks of unpaid leave. You're also required to give your employer at least 30 days' notice of your need for leave, or as much notice as possible, depending on the circumstances.

You should also check the rules of your state, because some states have their own parental leave rules and may pay disability benefits to new mothers. However, if you're not covered by any law, there's not much you can do. Unless you can negotiate more leave time with your employer, you'll either have to go back to work after six weeks or face losing your job.

 



 
 
 

Securities offered through The O.N. Equity Sales Company. Member FINRA /SIPC. One Financial Way Cincinnati, Ohio 45242. 513.794.6794.


Investment Advisory Services offered through O.N. Investment Management Company.
Medallion Financial & Insurance Services, LLC is not affiliated with The O.N. Equity Sales Company or O.N. Investment Management Company

This communication is strictly intended for individuals residing in the state(s) of AZ and CA. No offers may be made or accepted from any resident outside the specific states referenced.
 


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