Welcome to Ask the Bills, where every two weeks Helaine Olen answers readers’ questions about their most nagging personal-finance and financial-etiquette dilemmas. Seeking advice on a money issue? Email helaine.olen@slate.com.
Helaine,
I’m going to marry a wonderful man in six months. He has $150,000 in student loans from medical school. We live in New York City, so we are definitely not saving as much as we need to be. In addition to rent and the many expenses that come with living here, he is in forbearance and paying $1,000 per month just in interest on those loans—otherwise he would pay more than $1,800. My father died two years ago, leaving me about $1.7 million. A big portion of that is in a trust which I get monthly payments from, but I can’t touch it for at least 10 years. I’m also paying for our entire wedding, which I expect to cost $60,000. (I have this much in a savings account for this exact purpose.) My fiancé won’t be making doctor money for at least three years, and we hope to have a child in the next two years, when I hope to quit my job and live off savings, the income from the trust, and his earnings. So how should I help pay off my future husband’s student loans? It feels extremely silly for him to throw away about $1,000 a month when I could pay it off with some of the liquid assets I now have.
Why do I have a feeling your late dad was concerned about something like this? Answer: He tied up the majority of the money so you couldn’t access it for at least a decade. So, no, don’t pay off this debt, certainly not yet. It sounds like no one is having a problem paying the bill. Instead, it’s more that you don’t want the debt hanging around. I get it.
So why is paying it off the wrong call? Well, first, life is long and you might need the money one day. Once you use it to pay off the loans, it’s gone. Since quite a bit of your money is tied up, you’ll probably lose some flexibility as a result. What if in three years, your husband’s not earning what he thinks he will now and the costs of having a child are higher than you think, especially with you out of the workforce? You may need that money.
One other thing, which there is no diplomatic way to articulate: I’m sure your future husband is a wonderful human being. And no one ever marries intending for it to end. But if you’re still determined to pay off your fiancé’s student-loan debt, pay a visit to a lawyer who specializes in prenuptial agreements. You deserve to get that money back if, one day, you decide your wonderful husband isn’t so wonderful after all.
Helaine,
My fiancée and I met with a wedding photographer a few months ago. She gave us a contract form to fill out and sign but said it was the deposit that held her, not the written document. We looked over her materials, asked lots of questions, and said we would think about what we wanted and get back to her. She sent us a few emails stating we needed to put down a deposit or else she would need to take other jobs on our requested date. We never put down a deposit, thinking she had taken other work based on her earlier comment about the deposit, not a contract and, frankly, we weren’t very enamored with her. I sent her an email a couple of weeks ago saying we had found a different photographer, thank you very much, more as a courtesy than anything. I received an email from her saying we wouldn’t want to lose our deposit, and that even though we weren’t going to go with her for our wedding day, we should schedule other pictures with her, and that she turned down other jobs because we signed a contract. Her contract states we can cancel at any time but would forfeit the deposit, but we never put one down. Are we obligated to give her money even though she has plenty of time to find summer wedding work, or can I get away with not paying?
My kids frequently ask me to weigh in on their disputes with friends and classmates. I patiently listen to the he saids and I dids and then pronounce my verdict. It usually goes like this: Everyone is wrong. Everyone. The same is true here.
The wedding photographer needs to learn how to run a business. If the written contract she handed you says it’s a binding document, she shouldn’t tell you that it’s not until she receives a deposit. She shouldn’t ask anyone to sign a contract she claims is not a commitment, and she certainly shouldn’t then turn around and claim it is one? She’s being sloppy or slippery. Either way it’s bad.
So does that let you off the hook? Uh, no. I called two lawyers on your behalf: Rob Schenk, who runs the blog Wedding Industry Law, and Christie Asselin, who writes The Wedding Lawyer Blog. While both took pains to say they couldn’t give definitive advice without reviewing your contract, the facts you laid out don’t look good for you. “What a bummer,” Asselin told me. “They are breaching the contract. They have agreed to provide the security deposit so they are almost certainly on the hook.” Schenk agreed and suggested for clarity that we think about the situation in reverse. “What if the photographer signed the contract but didn’t take the money and then didn’t show up at the wedding?” You would be furious, right?
Moreover, if you weren’t committed, you shouldn’t have put pen to paper and signed the contract. So pay up. Take the photographer up on her offer to shoot engagement pictures, or maybe book her for photos a few months after the wedding. Think of it this way: Do you really want to begin your marriage by fighting with a vendor over money?
Helaine,
I am disabled and have my pension and Social Security payments direct-deposited to a checking account. I opened the account before my husband and I divorced, and at one point I added him to the account as a co-signer. We split in 2011. I went to the bank, with divorce papers in hand, and asked to have him taken off the account. They refused to do so, stating he would need to personally come in and do it. He lives in another state and I’ve been unable to contact him since then. What are my options?
According to divorce experts, this is a common problem. So what to do? You do what Stacy Francis, a certified financial planner and specialist in the finances of marital dissolution, refers to as a “workaround.” Go to the bank, close the original account, and transfer the money to a new account. You often don’t need your ex’s signature to do this. Yes, it’s a pain, especially since you’ll need to change your direct deposit information, but it’s the best you can do given the circumstances. If the bank still balks about closing the account—which sometimes happens—withdraw all the money in it, and open a new one and send all direct deposits there. Good luck!
