COA 4131 1st Edition Lecture 14 Outline of Last Lecture I. Money Gifts or Investments for Children II. The Cost of School Shopping III. Reality of What Kids CostIV. What We Pay Our Kids V. Tuition at Florida StateVI. Before MarriageOutline of Current Lecture I. Before Marriage II. Divorce Current LectureA. Before Marriagea. Money and Marriagei. Inventory1. Who owns what a. Car, house, furniture, ectii. State Laws1. Legal union recognized by state or government2. Community propertya. Not in Floridab. People who live together for a certain amount of time but not marriedc. Cohabitation iii. Benefits and Insurance1. If both parents have insurance, usually pick the better of the two2. Can have their own separate insurances if they want3. Ex: woman and man lived together in a relationship but couldn’t get married because her insurance covered her special disease buthis did nota. Once his insurance covered her disease they were able to get married and be on the same insurance b. Taxesi. Marriage penaltyii. Joint or separate1. Easier to do jointa. Unless very disparate incomesiii. Married people get hit more on taxesc. Prenuptial Agreement (prenups)i. Becoming more commonii. Consult attorney before1. Can just talk to them about it, doesn’t have to be permanent if you visit attorney iii. Reasons1. Children from prior relationship2. Owner of a business3. Very different incomes4. Married several times beforeiv. Set it up for a certain amount of time1. 10 years, 15 yearsv. Can revisit prenup and revise it vi. Shouldn’t be thought of as unromantic or rude vii. Post-nup1. Married for a few years and realize you should have had a prenup2. Something changes and change in extremes and you need to protect ita. Handicap childb. Won lotteryc. Big increase in incomed. Weddingsi. Most expensive part of the wedding is the reception 1. This is where cuts should be made 2. Least expensive is in the backyard/someone else’s houseii. Food is expensive1. Buffet is more expensive than sit down iii. Other costs1. Dressa. Average can be thousands of dollars2. Tuxa. Rent or buy?3. Photographer/videographer4. Flowers5. Brides maids gifts6. Alcohol 7. Band or DJa. In some cultures, woman dances and man throws money on her dressiv. Rehearsal dinner1. Husband’s family pays 2. Can be a couple thousand dollarsv. The older the couple the more likely they are to pay for themselvesvi. 2008: 1. $30,000vii. 20091. Tapering backviii. 20131. $30,000ix. Destination weddings 1. Hawaii or Florida or Caribbean 2. Who pays for plane tickets and accommodations?a. Have to think of these things before 3. Older couples like these x. Who pays for honeymoon?1. Usually husband’s family e. Marriage i. First time brides 25 yearsii. First time grooms 27 yearsiii. Two year gap is typical in America but not in other places1. Has been this way for hundreds of years hereiv. More educated you are, the older you are when marryingv. Decisions to make B. Divorce a. First time marriages: 11 yearsb. Numbers highest for i. Men: 30-34ii. Women: 25-29c. Questions to be settledi. Alimony1. Happens in about 14% of casesa. Not typical2. Usually men to women but can be other way aroundii. Attorneys, mediators, certified divorce planners 1. Hire an attorney2. Mediatora. Cheaper form of an attorneyb. Attorneys may have mediators on their teamiii. Engagement ring1. Who should have it?a. Technically the man but is usually fought abouti. Sentimental plus valueii. If it is in the man’s family, more likely to go to himiv. If woman changes her name back, have to change everything1. Birth certificate, v. Liquid vs illiquid1. Liquid, like cash, is easy to divide2. Illiquid is much more difficultd. Financial effectsi. Drop in income1. Used to two combined incomes but now only one2. Women tend to have bigger drop ii. Child support1. Pay per month2. Usually man pays to woman3. Usually up to age 18 and does not include college4. Child support gapiii. Family support 1. Combined child support an alimony 2. Given to the adult3. Typically man pays to woman 4. Can be temporarya. Spouse gets education or training until the person gets a job and support themselves i. If want a doctorate or go back to school, one class asemester to make him pay, for example b. Or until person remarries i. People will cohabitate instead of marrying to keep getting that money iv. Estate planning in second marriagesv. Widow(er)hoodvi. Collecting life insurance 1. Put beneficiaries 2. If you divorce have to change this or that person you divorced can get everything a. People forget C. Social Securitya. Monthly checki. Based on marriage or occupation b. Longer you live the more money you get back c. Have to be married for ten years in order to collect spouses social security i. Don’t divorce in 9 years, wait till 10 d. 66 years old for older people i. If retire at 60, you will get less money for the rest of your life e. Today, it’s 67 years old for us i. Talks to move it to 70 years old f. 44 million Americans, 1 out of 6, collect some kind of Social Security Benefit i. Since people are having less children, scared the number may change to 1out of 4g. Retirement benefitsi. Benefits for divorced men and womenD. Medicarea. Medicarei. Age basedii. For elderly b. Medicaid i. Low income c. Can be elderly and low income and get both i. Those in nursing homes d. Average age of deathi. 72 for menii. 79 for womeniii. Going up E. Living Arrangements and Care Optionsa. Daily care living optionsi. Can live at home1. Most people want to live at homeii. Independent living1. Can have someone you pay that will come and check on you iii. Assistant living1. Live on own but have group meals and activities iv. Adult day care1. Have food and activities during the day and pick them up at night2. Like child day care v. Want to make sure you are with same age group1. Don’t want old with oldest old vi. Nursing care1. Over $100,0002. Very expensive3. Insurance may cover some of cost but not all of it F. Charities a. Legitimate i. Church, American Heart Association, etc.ii. Make sure it’s recognizableiii. Want to get a receipt or proof1. Can be used for taxes b. Tax benefits i. Can take money off of
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