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What’s Mine Is Mine And What’s Yours Is Mine… old, not so funny joke for many men going through the divorce process. Not to be sexist mind you, just a sore, bitter joke. The fact is, although not to be applied only in the divorce process, it is a true statement of sorts. Having nothing to do with sex, marital status, business structure or any of a number of arrangements where two or more individuals start out as joint entities on an account and one finds themselves surprisingly off the account, in the cold and sometimes devoid of an asset- rather surprisingly.

It's very important to give great thought to how you title an account, and how you either keep assets segregated or combined between two or more people, whether it be for business or personal purposes. Let's look at the biggest reason for joining assets- marriage. Most people, with a new marriage with nothing but happiness and success in mind open a joint account once married as they are setting up their new home and life. I am a big believer is running the finances of a marriage with inclusion of both incomes (if there are two incomes) to make things easier and to have a complete cohesiveness of supporting the lifestyle of both in the partnership or marriage. However, it is very important to be careful when thinking of joining assets that were earned, inherited, awarded for a lawsuit or otherwise acquired before the marriage. The law says that assets that are kept segregated and are the source of pre-marital earnings, lawsuits, inheritances and awards for pain and suffering are not includable in the division of assets in the event of divorce. However, once you move the asset into joint name, all bets are off and it is inclusive in the settlement division. So, once you get married, it is important to be aware that as long as you keep your pre-marital assets separate in name, they are not includable in a claim of assets due to a divorce- what you came in with, you leave with. (Consult with your lawyer on this, as I have to disclose I am not an attorney and not in the practice of quoting law).

Another issue I've seen through the years are parents putting money into UTMA accounts (Uniforms transfer to Minors Act) as the taxation for the minor is different than if the eventual money is to be used for college for your little darling. The thought is, why pay taxes on your investment gains at the parent's tax rate when you can pay a lower rate if the money is in the child's name and Social Security number. In theory, it makes sense, but Uncle Sam has accounted for this "can't use" strategy. Once you put the money into your child's name and Social Security number, you have made a completed gift to your child, and it now belongs to the child. If you then take it back and put it into you name, you are essentially committing a Federal offence, thus setting yourself up for many years behind big fences with barbed wire at "Club Fed." Once you give it to your kid, it's his or hers- you can't take it back. Many have tried, some have gotten caught- the penalties vs. the amount of potential savings is not worth it, in my opinion, but some people will go to great lengths to avoid paying taxes. Seems a bit chancy, wouldn't you think?

Another game of chance I see, more than you think, is the movement of assets at a time our elderly parents need the assistance of nursing care or a nursing home. The adult children panic, seeing their inheritance moving to the hands of the nursing home, and quickly transfer the money out of Moms name, enroll her into the nursing facility and claim Mom has no money and the Government should pay for her stay- which could translate to hundreds of thousands of dollars. As they say- if it was easy, everybody would do it. Why pay for it if you could have Uncle pay for it? Well, believe me, they've heard it all, and seen it all. There is what is called the "five-year-rule-"before you can apply for assistance for Mom, the assets have had to have been transferred out of Mom's name in excess of 5 years previous to applying for assistance. This, as well as many other reasons, are why people come to qualified Certified Financial Planners™ like myself to plan, before the future is now. It could save the

family tons of money- with the correct planning, you can have your cake and eat it too- keeping the money in the estate while having Uncle paying for Mom. Easy and legal- if you pre-plan.

"What's miners is mine and what's yours is mine" can be averted with a plan enacted far in advance of when you need it. Don't wait- it could be very, very costly...and cause aggravation and financial damage far beyond your wildest dreams.

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