There are many kinds of financial mistakes one can make. Here are two, though, that few people consider.
1. The Missing Lien
When Bill and Wendy Johnson filed for divorce they agreed to sell the house and split the assets. Bill borrowed $10,000 from his mother to remodel, remove carpets, fix the garage and address other matters so it would be easy to sell. It was assumed that when the house sold he could take the first $10,000 and repay his mother.
Unfortunately, they did not have anything in writing. The judge split the money from the sale of the house 50-50. When Bill complained, the judge indicated that Bill should have had a lien on the house for that money. Without the lien, there was nothing.
2. The Inheritance Error
Customarily, future inheritances are not considered in a divorce. On the other hand, there are special circumstances that you should be aware of. When Burt and Nancy were in the middle of their divorce, Nancy’s mother passed away and she inherited close to $200,000 cash from the estate. Nancy assumed this would be for her and was counting on it to make a new start for the second half of her life.
Unfortunately, she deposited the money into an account held jointly with Burt. When they went to court the judge stated that because their money was commingled it would be split 50/50. In other words, once financial assets have been thrown into the same pot they are no longer yours alone. Burt was thereby entitled to half of Nancy’s inheritance.