Daughter has rolled up $70,000 bill ? on our credit cards
DEAR BRUCE: I hope it?s not too late already, but we could really use your help! I am not completely sure how far in debt we are, but I think it?s around $70,000 in credit cards. I have definitely done my share of going overboard with the spending. But, my daughter helped herself to our credit cards. When I found out, I tried to fix everything myself and protect her, which has backfired big time. My husband works his butt off, and I have messed things up pretty bad. I would love to know if there?s anything we can do to start straightening things out before it gets even worse. ? S.R., via e-mail
DEAR S.R.: Unfortunately, the first reality you have to face is, your daughter is a thief. If you are prepared to accept that and declare her a thief, you can sign affidavits of fraud for the amount of money she has stolen from you. Understand the credit-card companies may very well charge her with theft and at the very least you?ll have a criminal conviction, and maybe worse, in her background.
Putting that aside, some of this debt is yours; you haven?t indicated how much. I sympathize with your husband. Probably most of this was done before he had any idea of the magnitude. You first have to come to a meeting of the minds with your husband, and perhaps your daughter, as to how to work this out. You are responsible for the amount your daughter stole, unless you?re willing to declare publicly she did steal the money. If you attempt Chapter 7 bankruptcy, it may be disallowed because of your husband?s income and the circumstances involved. Before you do that, you might wish to seek counsel from an attorney. It?s a heartbreaker to know your own child would steal from you.
DEAR BRUCE: Where can you invest $100,000 and make $15,000 to $20,000 a year? ? E.A., via e-mail
DEAR E.A.: Not very many places with any degree of safety. You?re looking for a 15 percent to 20 percent return and, in today?s world, that ROI is highly difficult unless you are willing to take substantial risk. The market over the past 40 years returned slightly under 10 percent. You?re asking for nearly two times that, not impossible but not without significant risk.
DEAR BRUCE: I am a longtime listener to your broadcast and have come to respect your opinions. My husband and I paid $2,000 for a 2-inch-thick packet of papers from an advisory firm consisting of ?instructions for executing our living trust and accompanying estate-planning documents.? It includes: living trust, schedule of gifts, declaration of intent, certification and verification of trust, pour-over will and guardian statement, durable financial power of attorney, durable POA for health-care decisions, directive to physicians, final instructions, community-property agreement, funding instructions and forms, and trust termination. Witnesses and notarization are required for many forms. Does this seem legitimate? Shady? Should we stick with forms prepared by our local attorney? Do you need further information? Thanks for your input. ? C.S., Wisconsin
DEAR C.S.: Do-it-yourself law is right there with do-it-yourself medicine ? not very smart, in my opinion. I don?t believe the firm is shady, and I wouldn?t question their ?legitimacy? other than they expect you to do an awful lot of the running around, as well as the understanding of what a pour-over will is or the difference between a durable power of attorney and a general power of attorney, etc. Do I think you should do things with a local attorney? Need you really ask? Certainly so. I don?t know exactly what you could have accomplished for $2,000. I don?t know the breadth of your needs. I do know these are some of the most important decisions you will make in your life. Trying to do it yourself through the mail is a tragedy waiting to happen.
Send your questions to: Smart Money, P.O. Box 503, Elfers, FL 34680. E-mail to: [email protected]. Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.