Dan Danford, host of Money Made Easy, tackles a viewer's question about buying a home with inheritance money.

Danford, MBA, CRSP of Family Investment Center, uses his own 30 years of experience as a small business owner and financial advisor to offer advice on whether or not to purchase a home with inheritance money if you don't have a lot of savings.

Question: My wife and I are recently separated. She moved home with her parents, and I still live in my house. The house is in my name, and I bought it before we got married. 

Since our separation, she has come in and started taking things out of the house that either was hers before the marriage or we both bought or received as a gift during the marriage. Recently without my knowledge she took out a large sum of money from our joint checking account. Because of this, I changed the locks on the house so that she could not get anything else or do anything to the house. 

She is saying that it is her house legally as well, and she can come and go as she pleases, and if the locks are changed, she will have a sheriff break down the door. Can she do that? Is she legally part owner of this house now?

By Jennifer M. Paine

Attorney, Cordell & Cordell, P.C., Detroit office

Note: This is Part 2 of a two-part series. Click here to read Part 1.

In today’s downward economy, with home foreclosures having been at their highest, many couples face a common predicament; their mortgages exceed their home’s value. They cannot afford to sell, but they cannot stand to live together. Neither wants to assume the mortgage debt. Or neither can. They ask what they can and should do. Here are some suggestions.

Mortgage Traps for the Unwary

Blissful, young newlyweds on a let’s-build-a-nest high, you and your spouse purchased a half million dollar house with zero down on a thirty year mortgage with a balloon payment. Ten years later, the bliss has soured and you both want out, but the house is worth $300,000 and you’ve barely made a dent in the principal. So, your house is “underwater.” Now what?

By Jennifer M. Paine

Attorney, Cordell & Cordell, P.C., Detroit office

It's a big house, we'll divide it up! You stay in your half, I'll stay in mine! Walter and Anna argue as their house, and their marriage, fall to pieces around them.

Walter and Anna searched for a house but could not afford much. When Walter’s real estate friend offered them a beautiful mansion at a low price, the deal seemed too good to be true. It was. The second they moved in, the house fell apart – literally – around them. That antique wooden staircase? Hanging by planks. And the hot water in the claw-foot tub? Rusty muck. Not to mention the floors collapsing, the chimney caving, the garden sinking and Walter hanging between the upstairs and the downstairs, trapped inside a rug like a bottle stopper in a hole in the floor. And then came the sultry ex-husband, Max, to steal Anna away.

She says, with a pointed musician’s stare, the idea is ridiculous. But he says, with an equally pointed lawyer’s glare, they have no money not to.

This is a scene from The Money Pit, the 1986 comedy starring Tom Hanks and Shelley Long. It is a clever movie that dances seamlessly between real-life drama – divorce and finances – and outrageous comedy – exploding electrical wires, collapsing walls, slips and falls, and all. It is a great movie to entertain, whether you need a lighthearted moment in the midst of your court case or just something to do. But it speaks truth to divorced and separated, divorcing and separating couples, too.

In today’s downward economy, with home foreclosures having been at their highest, many couples face the predicament Walter and Anna faced. Their mortgages exceed their home’s value. They cannot afford to sell, but they cannot stand to live together. Neither wants to assume the mortgage debt. Or neither can. Like Walter and Anna, they ask what they can and should do. Here are some suggestions.

Question:

My wife and I have kept everything financial separated throughout our 2-year marriage. Now, facing divorce, I am wondering how things will be divided. We have no joint accounts of any kind, checking, savings, credit cards, cell phone plan, etc. I have savings (checking, savings, 401K, IRA, stocks, house). She has zero savings and is in debt (acquired prior to marriage). Her credit card debt is close to $2000, and she has a loan against her 401K. She has no other assets except her car and jewelry.

The house is in my name, and I was living in it prior to our marriage. I have 20% equity in house. My wife has never made any payments towards house. Does she have any right to the equity in the house?

I’d also like to know if she has any right to half of my 401K. We were married in 2008, and the value of my 401K is now less than what is was when we married. Does she have rights to half of the gains made in 2009, but none of the losses in 2008? And does the same apply for IRA's?