A: There’s a legal answer to this question and a truer answer from real life. Legally, his ex has no claim on your income. Theoretically, she could ask the court to increase her child support because, thanks to your earnings, his living expenses have been reduced. But in your state of Massachusetts, that’s not a case she’s likely to win, says Boston divorce lawyer Jerry Nissenbaum. Every state has child-support guidelines, based on the parents’ (not stepparents’) incomes. Massachusetts’ generous courts have probably ordered your fiance to pay the maximum already.
Attorney Laura Morgan of Charlottesville, Va., chair of the Child Support Committee of the American Bar Association, says an ex would be unlikely to win in other states, too. If he doesn’t pay, a court cannot attach your wages or assets because it’s not your debt.
Now let’s talk about life. When you become a stepparent, you take on moral responsibilities, if not legal ones. Kids cost money. Don’t enter this relationship if you’re not prepared to pitch in.
Q: My wife responded to a mailing from Fleet Bank offering a platinum card with a “revolutionary low fixed rate” of just 7.99 percent. The mailing claimed that this was not a mere “introductory rate” that would rise after “only a few short months.” When my wife called about it, Fleet told her that the rate would not change. But after about six months, the rate went up by about 2.5 percentage points. Is that legal? John Jordan, Tullahoma, Tenn.
A: Who was it who said that the biggest frauds are always legal? What Fleet did was legal (so not a fraud)–but in my book, it’s deceptive for sure. The fine print on the cardholder agreement, which you got after you signed up, says the following:
“We [Fleet] have the right to change any of the terms of this Agreement at any time.” As far as I know, that’s the way all credit cards work. No matter what the ads say, they can pull a switcheroo as long as they notify you, in writing, at least 15 days in advance.
Fleet’s Deborah Pulver says it’s “well recognized” that credit-card terms can be “modified.” In other words, you should have known better than to take the mailing at its word. She adds that the bank would not have instructed its phone reps to say the rate wouldn’t change (but do the phone reps know that “fixed rates” aren’t?).
Pulver says that Fleet was “compelled” to raise its fixed rates “only after the Federal Reserve had raised interest rates several times last year.” Hmmm. Since January the Fed has been cutting rates. The Jordans are standing by, waiting for their rate to drop.
Q: I’m 80 and running out of cash. But I own my own $100,000 home. Where can I learn more about reverse mortgages? Anita Rossi, Stockton, Calif.
A: Reverse mortgages are just the ticket for people like you. You can open up a credit line against the value of your home and borrow money as needed. You can also arrange for regular monthly payments. No money has to be repaid until you leave your home permanently. At that point, the house will be sold and the proceeds used to cover the loan plus the accumulated interest and fees. Any remaining money goes to your heirs. If the house sells for less than the loan is worth, it’s the lender’s problem, not yours.
Most borrowers choose a Home Equity Conversion Mortgage, insured by the federal government (look under Senior Citizens at www.hud.gov). Ken Scholen, director of AARP’s Home Equity Information Center, says it generally offers homeowners a lot more cash than Fannie Mae’s Home Keeper loan (www.homepath.com) or other reverse-mortgage programs.
Reverse mortgages have a lot of quirks. For this reason, you need counseling before you get one. In Stockton, try Consumer Credit Counseling or ask a senior citizens’ group. For the lenders in your state, go to reversemortgage.org or call 866-264-4466. For valuable info, go to www.aarp.org/revmort or call AARP at 800-209-8085 for the free booklet “Home Made Money.”
Q: We recently sold some gas-company shares that my wife received as a gift more than 25 years ago. We’re trying to figure out our cost basis so we can report the taxable gain. The company sent me the historical record of dividend payments and stock splits. But it doesn’t show the share price on the days dividends were declared. What do we do, when so much time has elapsed and records have been lost? Rick Jette, Woodstock, Calif.
A: Lots of people run into problems like yours. Tom Ochsenschlager, a partner in the consulting firm Grant Thornton, suggests that you hunt for prices in back issues of The Wall Street Journal, available through many public libraries. With specific dates, you can also find prices back to 1971 at bigcharts.com. Large libraries and financial firms may have the CCH Capital Changes Reporter, which gives dates for stock splits, mergers and spinoffs. If you don’t know exactly when the stock was acquired, estimate. As long as you’re reasonable, the IRS isn’t likely to argue.
