What should I do with $14k?

[snafu]

Welcome to SA. We're a divergent bunch, somewhat international with different backgrounds and experiences. Our common link is that we're mindful about how we use money to fulfill hopes, dream and wishes.

1st, every state has specific laws about division of assets as a result of divorce. I suggest you examine those as throughly as possible on-line and on encoded, specific, Google password site. You want to know how assets owned before marriage would be evaluated and relevant details about what spouse can claim as a result of contributions subsequent to marriage. Does your wife work and earn income? How do you split bills and costs? How much does she contribute to outstanding debt? Do you have long standing credit cards dating back before marriage? Does she?

I don't offer 'counselling' but I suggest you poll colleagues, and old, trustworthy friends for a list of good lawyers who specialize in messy divorces. Since the year end is nearly here, I'd park the inheritance in the highest paying, electronic, savings account or Credit Union I could find, far away from anyone's knowledge. I'd ask spouse for a change of direction in financial management...something like Dave Ramsey's school of thinking about debt [see You Tube] or announcements about the trouncing from Saving Advice participants. or President elect Trump's tweets that fly in the face of reality.

I think you are smart to get finances under control whatever the extenuating circumstances.

[henry450]

Hi snafu! Thanks for the warm welcome!!

Yes, my wife works and earns a bigger income than I do. But, she's terrible with money and spends like crazy. Frankly, that's my #1 reason for wanting a divorce. Oh, and there's also that part about her cheating on me and picking fights with me over the most trivial things you can imagine, but that's another story. Lol.

She doesn't contribute anything to the debts -- she's just adding to them. In fact, I had NO credit card debt before the marriage. It's all hers. I've taken away all her cards except one (which she managed to lose last weekend while drunk at the bar -- WTF), but it appears to be too little too late.

I'd love to get my finances under control. I'm very smart with money; don't know much about investing but I'd like to learn!! Even she'd admit I'm better with money than anyone she's ever met in her life, but I can't work miracles on an alcoholic pothead who thinks $70 is an appropriate amount to spend on lunch (presumably treating her "boyfriend" -- now you see why I want a divorce).

[TexasHusker]

Use the money to hire a good divorce lawyer. If you have any money left, buy Crunch Berries, but get the family size, it's cheaper per ounce.

[henry450]

^^Not funny. Go away.

[kork13]

I know almost nothing of divorce law, but I can tell you this: There are two big questions to answer before you can get much worthwhile advice...
1) What state do you live in?
2) Do you have any kids?

These two will dictate vast differences in what you can/want to do.

Until then... Talk to a lawyer. Doesn't need to be a divorce lawyer (in fact, I'd avoid them until you know for sure that's where you're headed), but you probably want to get some authoritative advice. Depending on your state's laws, there may be a way to protect your inheritance.

The only other thing I can suggest right now is to avoid taking possession of it. Is there a way to get it distributed to a trust in your benefit instead of distributed to you directly? Or just delay the distribution? If it never enters your possession, it typically cannot be claimed by a divorcing spouse.

[henry450]

Pennsylvania/no kids.

[disneysteve]

Talk to a lawyer.

I agree with kork. This is one of those times where you really do need a good lawyer. How you handle this money, and any other financial decisions going forward, can have huge repercussions if and when you and you wife split. One wrong move now could cost you thousands of dollars in the future.

Normally I'm all in favor of crowd sourcing personal finance questions but this is a case where you need competent professional advice.

[kork13]

No kids = Good news -- always better not to subject them to divorce. Also simplifies things significantly.

Pennsylvania seems pretty reasonable as far as divorce goes, judging from a quick google search. First off, you're in luck -- PA is not a community property state. They use an "equitable division" philosophy, which basically puts everything into 2 buckets: non-marital and marital assets.

The biggest thing to nail down seems to be a date of separation (see link above for detail). Anything you owned before marriage (with slight exception) and that you purchase after separation is considered to be yours and yours alone -- which would include your inheritance, presuming you and your wife are considered 'separated' before you receive it.

As for your home, it will indeed remain your own. However, it seems that she would be entitled to half of whatever increase in value that your home has had between the time of your marriage and separation. So if your home was worth $150k when you were married, and it's now worth $180k, she'd be entitled to part of the $30k increase in value.

I won't get into too much detail, because as I said, I think you'll do better for yourself by consulting a knowledgable lawyer... But I will say that if you really think you're leading to divorce, you'll want to draw the "separation" line in the sand sooner than later.

[Spiffster]

Spiffster, ROTH before credit card debt? How come?

(Not arguing. Just trying to understand better.)

Yeah that would normally be a bit out of order, but my impression was that most or all of the high interest (credit card) debt was hers... IMO you need to do whatever you can to NOT help her out. In fact, considering the circumstances I would make it clear to her now that she needs to start managing her own debt.

[TexasHusker]

^^Not funny. Go away.

Didn't mean for it to be. But your question is a dumb one. Ask dumb questions, get dumb answers.

[Jbone]

I'm currently going through a divorce myself. My lawyer stated to me any inheritance is intended for the recipient only. Meaning that 14k should be yours scott free!.. UNLESS you commingle the inheritance with martial money.. if that money is deposited into a joint checking or savings or any account with her name on it, then she would be able to grab 7k of that.

However like others have stated seek a lawyer! Im just repeating what was said to me by my lawyer. And there can be different state laws! Trust me! Even if you aren't sure you will be getting a divorce at least speak with a lawyer to get your ducks in a row. What you think may be the "right" thing to do doesn't mean that it is. You don't want to look up to an anvil falling on your head and a few months or years from now you realize you screwed up and pissed 7k away. Oh and you will feel like an anvil cracked you in the head too if she walked away with 7k that should have been yours.

Personally I wouldn't tie this money up in a long term investment without speaking with a lawyer. I'd park it in a savings account or short term CD and speak with a lawyer ASAP.

[bjl584]

I'd get an attorney to help you navigate this complicated situation.

I don't see a way to hide the money or shelter it so that your wife can't get a hold of any of it should you two divorce, but then again, I'm not an attorney.

[snafu]

Adding my voice to others advocating Kirk's suggestions. Brilliant to delay taking inheritance until problems have been resolved. While gathering information, I hope you'll examine your FICO [credit] score. What interest are you currently being charged on CCs? Are you eligible for any 0% cards with modest transfer fees whose balance could be cleared within their timelines?

As a point of information that might help with the current issues...
I used to be perplexed by friends and colleagues who valued silly celebrity branded stuff, shopped for entertainment, bought stuff they didn't need, couldn't afford and were sinking in a financial morass with a home stuffed to the rafters with stuff they didn't use or need.

I've since learned they could fill libraries with books written to explain that many adults whose emotional needs were neglected or unfulfilled in childhood use shopping to try [unsuccessfully] to fill the 'holes in their hearts.'

'The Loneliness Loop: Why Feeling Sad Makes Us Shop' is one of many that explains, these materialists buy things because they feel an emotional deficit in their life that they want to fill with stuff. ...

http://www.theatlantic.com/business/archive/2013/08/the-loneliness-loop-why-feeling-sad-makes-us-shop-and-shopping-makes-us-sad/278443/

[henry450]

Just for the record -- I don't know for sure that we're getting divorced. It just seems to be moving in that direction with infidelity, general unhappiness in the marriage, etc.

I would hope for an amicable divorce -- she wouldn't go after my 403b; I wouldn't go after her 401k. She'd let me keep the property valuation in the house because I'm the one that bought the house and paid for the renovations.

But, not gonna hold my breath. I know this stuff can get pretty messy.

Still looking for a clear answer for what I should do with the money. Right now, leaning towards $5K in an IRA and $9K to pay down some of the credit cards. What do you guys think?

[Jluke]

Still looking for a clear answer for what I should do with the money. Right now, leaning towards $5K in an IRA and $9K to pay down some of the credit cards. What do you guys think?

that is a solid plan...