EagleTribune.com, North Andover, MA

Business

May 5, 2013

When a wife commits identity theft

A wife takes out a credit card in her husband’s name without his knowledge, and they get divorced, can the husband claim identity theft?

Absolutely! Unless they have power of attorney, people who open an account in a name other than their own have stolen an identity. Being married to someone doesn’t give you the right to sign your spouse’s name to a document.

I knew a guy in the real estate business years ago who was doing a lot of property deals under his own name.

Occasionally, the title company would require his wife’s signature, and he would sign her name on the papers himself. Sometimes he signed her name after calling her up and explaining what was happening, and she was OK with the situation.

Then he signed some papers she didn’t know about, and it came back to bite him. He was charged with criminal fraud!

You cannot legally sign your spouse’s name without first having power of attorney privileges. If you do, it’s called identity theft. It’s a crime anytime you lie to get money.

I’m following your plan, and currently I have $14,000 in my emergency fund. What are essentials for three to six months of expenses?

Basically, you should ask yourself this question: What would it take to operate my household for a month? There are several different things that could be classified as “essentials,” but if you take those things and multiply the number by three, four, five or six, you’ll see how much money you need to have a fully loaded emergency fund of three to six months of expenses.

This is Baby Step 3 in my plan.

Some people get really technical about exactly how many months of expenses they need to save in this range. And that’s OK. You can take a little time to evaluate things before moving on to Baby Step 4, which is investing 15 percent of your household income into Roth IRAs and other pre-tax retirement plans.

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