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All good things
Old 09-13-2004, 05:25 AM   #1
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All good things

have to come to an end.

Miss Jane has decided to "settle down" and she will be wedded sometimes next year.

Now my question is those who have been married, do you "merge your asset, or keep them separate? Joint account vs separate accounts? How do you negotiate saving/spending (I don't think this one is difficult since we are both savers)?

If you have a house on your name do you change it to reflect your spouse's name too?

I would also like to hear the best of times and the worst of times.

Btw, I live in Canada so ....

Anyway, let's hear it!

Jane
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Hey, it's not an end...
Old 09-13-2004, 07:12 AM   #2
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Hey, it's not an end...

... it's a new beginning. Or a defeatist view on marriage!

It's probably easier to keep separate checking/savings accounts. First, a joint owner can always be added to (or removed from) either of the accounts. Second, each account is insured to the FDIC limit, which makes it easier to move money & hold CDs without fearing for the worst.

"Merging" the accounts is more complicated than just keeping them separate, especially if an account has to be closed out. We've kept separate accounts (with joint names added) but since I do the bill-paying then most of the money ends up being transferred to my account. Moving money is faster & easier than it's ever been, so whose account has almost become irrelevant.

Changing house title makes it easier for the survivor to inherit. It also makes it easier to convince the mortgage lender that you'll both be paying off the debt. But otherwise house title is more an emotional consideration than legal. Joint house title can also make it more vulnerable during bankruptcies or lawsuits (not that I'm commenting on your lifestyle or the guy you're sharing title with). Some high-liability workers (doctors, lawyers) have zero assets while their spouses hold everything in their own names.

The people that value prenups the most are the ones with the scariest stories (or who needed a prenup). In two words, Donald Trump. You can debate prenups forever but I believe it does suck all the romance right out of the ceremony. If you're giving up something for the marriage (e.g. career to raise kids, house title, supporting the husband's grad degree or chipping in for the business) then a prenup may protect your assets and your future earnings. But it can also prematurely test a relationship commitment. Your country/province may provide sufficient legal protection (community property) without a prenup.

A prenup is a great idea if you have kids from an earlier marriage whose assets you wish to protect. "Honey, I love you but I have to consider the welfare of ..."

Don't forget to update the wills, healthcare directives, & medical powers of attorney as soon as you're back from the honeymoon. It's so romantic to sit on the beach debating whether your spouse should keep you on a feeding tube or purchase a 9mm long-term care policy.

I don't know squat about Canadian taxes, but if you start up a revocable living trust then joint asset titles are also irrelevant. The vast majority of it goes into the trust.

Spouse & I came from similar backgrounds, the same college, and similar careers. It's always been a merger of equals, with each of us equally capable of doing the domestic jobs and choosing to trade with each other for those we preferred. That's how I ended up in charge of executing the investments (after we make the decisions) and making sure all the bills get paid. (It's a fair deal-- I also "own" trash, sewage, and all things icky.) One day a close friend of ours (from what we assumed was a similar marriage) took my spouse aside for the "girlfriend" talk, admonishing her not to let me handle all the money. The friend's parents had been lifelong alcoholics and, when her mother had finally decided to sober up, the father had siphoned all the assets and decamped, leaving her broke & financially ignorant. I'm told that those who've been through a divorce understand completely while those who've never experienced divorce will never understand.

So these are highly personal decisions that greatly depend on your own family background, previous marriage experience (if any), and your degree of control (or ignorance). There's no right answer.

But don't despair... as soon as you get these life decisions out of the way then you can move on to the really critical stuff-- family religion, size of the new family, who spends which holidays with whose relatives, and whether the toilet paper unrolls down the back or in the front.

Oh, and congratulations!
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Re: All good things
Old 09-13-2004, 09:31 AM   #3
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Re: All good things

My husband and I have joint accounts for everything (checking and taxable investments). I think it is a whole lot simpler that way - whenever I read about people with multiple accounts moving different amounts of money between one account and the other, or contributing certain percentages to a joint fund, I just think "What a complicated mess!"

We actually merged our accounts years before we were married. The first two years we lived together we had separate checking accounts (since that's what we had when we met) and it was a nuisance to figure out whose turn it was to pay which bill. When we moved for grad school we just piled up our little bit of cash into one joint account and that was that.

We don't do anything like give ourselves "allowances" or any of those things I read about... Both of us have good common sense with money and are on the same page in terms of goals. For any moderately large purchase we discuss it before buying, but for smaller things we trust each others' judgement. I imagine that in some months or years one of us spends more on him/herself than the other, but so what?

One thing that I think is pretty important is that we have total "money transparency." Each of us knows exactly what comes in (income) and what goes out (expenses) and where our money is (investments). We handle different aspects of the finances - for instance, he keeps track of everything in Quicken (I don't have the patience for that, he does), and I do the taxes (he doesn't have the patience for that, I do), but each of us knows the results from that activity. Similarly, I take care of researching and deciding on investments (because it interests me) but he knows exactly what we have and why we have it. No surprises, ever.

In any case, no matter how you decide to arrange things, congratulations!
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Re: Hey, it's not an end...
Old 09-13-2004, 10:04 AM   #4
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Re: Hey, it's not an end...

Quote:
... it's a new beginning. *Or a defeatist view on marriage!
;D Sorry, can't resist...I am joking though. It is a joyful event.

Since this is the first (and hopefully last) marriage for both of us, pre-nup is probably not necessary. We are (more or less) equal in education, jobs and saving personality (we are both engineers, but he is mechanical while I am chemical).

I like the idea of assigning someone to the task of paying household bills (that way the bills will get paid). I like the idea of both of us coming clean in terms of net worth. I am leaning towards keeping our retirement accounts separate though since I think we may have a different investing personality. Plus, I like to know where every penny of my money goes and how it is invested (being a control freak that I am ;D ), and so does he. Although he can do the taxes if he wants :D

I suppose joint account will make being completely transparent easier but I like the idea (right now anyway) that some money is ours and some money is his and the rest is my own.

We still have almost 10 months to sort things out (and throw a wedding of some sort). We both agree that we want a cheap wedding. I can never understand how people can spend so much on weddings. Big kids that we are, we are going to pay for the wedding on our own. To tell you the truth, I am so tempted to skip the whole wedding thing and elope (but both sets of parents will kill me).

Oh and the first thing I am going to do is to get rid of my car! I think we can do just fine with 1 car.

Anyway, thanks for the advice! Much appreciated!

Jane
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Re: All good things
Old 09-13-2004, 10:50 AM   #5
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Re: All good things

Congratulations...

and whatever you decide to do with your accounts, as long as the both of you communicate and work together to come up with something agreeable, it's a piece of cake.

The hardest part will be letting go of all those saved $$ when the time comes.
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Re: Hey, it's not an end...
Old 09-13-2004, 11:44 AM   #6
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Re: Hey, it's not an end...

First congratulations!!!

Quote:
I am leaning towards keeping our retirement accounts separate though
RRSP rules won't allow you to merge them anyways. *Just make sure that whomever earns the most "officially" makes the contribution to both your RRSPs at least as far as CCRA is concerned. *You'll get the biggest tax writeoff that way.

Quote:
I suppose joint account will make being completely transparent easier but I like the idea (right now anyway) that some money is ours and some money is his and the rest is my own.
You can do that and still merge finances. *All the money that my wife and I earn is thrown into one big communal pot that pays all the bills and puts money into the savings accounts (mine and my wife's retirement accounts and our taxable investment account). *One of the expenses that is paid out is pocket money to both my wife and myself on a weekly basis and a monthly amount for clothing/grooming. *We get equal pocket money but my wife gets a larger clothing/grooming amount due to the higher costs for women's items - even simple haircuts cost more so it's "fair". *What I do with this money is up to me and it gives some freedom of choice.

When I hear of folks who do the dividing of the bills it makes me think of the horrible system that one of the couples in the movie "Joy Luck Club" had. *He made maybe 5 or 6 times what his wife made and yet they were both paying 50% of all the bills (groceries was the example in the movie). *How does it work out if one of the couple stays home to care for the kids? *Do they not get to eat or spend money on haircuts? *What about retirement?
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Re: All good things
Old 09-13-2004, 12:48 PM   #7
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Re: All good things

We're in the process of merging everything, although we're keeping her accounts they'll be sparsely funded.

A lot of people will say its a good idea to keep the finances separate in the event things go wrong. Planning for smooth failure works in a lot of thing but not in romantic situations. I think it creates a foundation thats not going to be as strong.

We found some good economies of scale in combining. By putting our insurance together, we were able to list her house as a "second home" which means liability from my home policy covers us both and we didnt need to carry liability on that property. By combining our cars and homes on one policy we got a couple of extra discounts for multiple car/multiple house. I increased our deductibles a little on homes and cars and doubled my (now our) umbrella liability policy. Total cost of higher coverage with slightly higher deductibles is a net savings vs our old separate plans.

Because she's direct depositing into my checking account, I get an extra .25-.5% on CD's from my bank and a few other free bennies.

She got me on her works group health insurance, which cost ~ half what I was paying out of pocket as an individual.

I was able to extend my high falutin' vanguard status to her retirement accounts as they will allow you to 'cover' family members. Now she doesnt have to pay the nickel and dime fees and charges they apply to regular accounts.

Since she has earned income, both of us can now contribute the max to a roth even though my earned income is zero.
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Re: All good things
Old 09-13-2004, 01:07 PM   #8
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Re: All good things

If you want to keep some of your money separate, maybe open a new checking account for both of you to use for household expense money.

Best wishes in your marriage.
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Re: Hey, it's not an end...
Old 09-13-2004, 01:32 PM   #9
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Re: Hey, it's not an end...

Quote:
Since this is the first (and hopefully last) marriage for both of us, pre-nup is probably not necessary.
Congrats, Jane! * I've never met anybody who got married with the idea that it was a temporary situation, yet 50% of marriages end in divorce. * You're young. *You might have 70 years ahead of you. * A *lot* can change in 70 years.

In your case, if you're both coming into the relationship with pretty much equal assets, then I don't see any reason to worry about pre-nups or commingling assets.

However, if something does go haywire down the road, you'll be glad that you kept one account in your name with, say, 12-months of cash that he can't touch. * Or at least enough to hire a lawyer.

As far as best/worst times, the one thing my wife and I both agreed upon when we married was that we didn't want kids. * As she approached 35, she changed her mind. * I was knocked for a loop. * That was a significant inflection point in our relationship.

Ultimately, I warmed up to the idea of having a kid. * Despite the sleepless nights, the messes to clean up, the occasionally obnoxious behavior, and the utter loss of freedom, we're having a blast. * I was prepared to simply roll with the punches, but it turned out to be a really rewarding choice.
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Re: All good things
Old 09-13-2004, 06:00 PM   #10
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Re: All good things

For what it's worth Jane, Mrs. Zipper and I celebrated our 35th wedding anniversary in May. Everything we have, house, bank accounts, cars etc., have been joint since day 1. As Hypeborea has indicated RRSP's have to be separate in Canada. Since I was the major earner, I did a lot of spousals to help equalize retirement savings. Mrs. Zipper is still working at the London Regional Cancer Centre, but I retired in 1997, so she is still building credits and her own regular RRSP's. 2004 is a different era than 1969, but if you have truly found your soul-mate then I recommend sailing through life as a committed couple.
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Re: All good things
Old 09-14-2004, 03:51 AM   #11
 
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Re: All good things

I have posted most of thsi before, but the topics intrigue me.

We've been married 3 years, ages 60 and 55. Second marriage for both. Children from both prior unions.
I love my wife, but I would NEVER have remarried (anyone) without a prenup, under any circumstances.
All finances/assets are completely separate (except some furniture) and will remain so forever. Financial
issues mainly derailed my first marriage (not uncommon).
My current spouse is provided for in many ways, but no
comingling. Can't say she prefers this system as
it does take a bit of romance out of things, but I
can't function otherwise. Anyway, I don't tell her what to do with her money and she doesn't tell me what to do with mine. So far, so good.

Best wishes to Jane and all who embark on the stormy seas of matrimony. Everyone has to figure out what
works. Most friends and contemporaries in my age group have been married more than once. Their
arrangements (financial and otherwise) are very diverse,
but most seem content and glad to be married.

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Re: All good things
Old 09-14-2004, 09:18 AM   #12
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Re: All good things

Thank you for all the kind wishes!

Dryer sheet (used or new) donation is appreciated as I may just have to make a bridal gown out of it (yeah I just looked at the prices of these gowns today - those things are damn expensive!!).


Jane
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Re: All good things
Old 09-14-2004, 09:34 AM   #13
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Re: All good things

Quote:
...(yeah I just looked at the prices of these gowns today - those things are damn expensive!!).
Amen to that... thank heavens my bride was practical when we tied the knot. The whole process can be wildly expensive, depending on how far you want to go. However, we found it can be decidely cheaper and just as much fun as the alternatives...
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Re: Hey, it's not an end...
Old 09-14-2004, 10:58 AM   #14
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Re: Hey, it's not an end...

Quote:
Despite the sleepless nights, the messes to clean up, the occasionally obnoxious behavior, and the utter loss of freedom, we're having a blast. I was prepared to simply roll with the punches, but it turned out to be a really rewarding choice.
Let me get this straight...was this stuff what happened before or after the pregnancy? ;)
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Re: All good things
Old 09-14-2004, 12:58 PM   #15
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Re: All good things

Quote:
. . .
Now my question is those who have been married, do you "merge your asset, or keep them separate? Joint account vs separate accounts? How do you negotiate saving/spending (I don't think this one is difficult since we are both savers)?

If you have a house on your name do you change it to reflect your spouse's name too?

I would also like to hear the best of times and the worst of times.

Btw, I live in Canada so ....

Anyway, let's hear it! *

Jane
Congratulations, Jane.

We have always had everything in joint accounts and joint ownership. But we didn't have one of the problems you have. When we got married, we both had nothing (or a near enough approximation to nothing for engineering applications). So we didn't have to change titles or names on accounts, etc.

Regarding checking accounts, we've done different things over the years. For several years she kept the checkbook, balanced it, and paid all bills, etc. We had one joint account. Then I took over those tasks for awhile. Eventually we set up two joint checking accounts and split up the bills we take care of. When we were working, her paychecks went into one account, mine into another. She paid certain bills (mortgage, insurance, etc.) and bought any misc. items she purchased out of one account that she also balanced. I paid other bills (utilities, etc.) and bought misc. items out of the other account that I balanced. We tended to accumulate excess funds in both, so periodically we would figure out our total surplus and decide how to invest it (or spend it if that's what we needed to do).

Now, in retirement, we have to replentish the accounts periodically from our investment accounts. But we still keep two accounts. We've agreed on a target balance to keep in the accounts and we transfer funds periodically into whichever account drops below that figure.

If you agree on a basic spending/saving philosophy, I don't think it matters how you decide to handle the details. You will arrive at a way that works for you. If you don't agree, I'm not sure any system will work.

Good luck. I wish you the best.
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Re: All good things
Old 09-15-2004, 11:03 AM   #16
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Re: All good things

Thanks everyone. Last night we decided that the best way to approach the issues of account (for now) is to open a joint chequing account where both paychecks will be deposited into and keep our separate account where x% of each of our pay will be deposited into for "spending money". This spending money is for clothes, grooming, coffee etc.

Hyperborea is right - RRSP can't be merged but since my RRSP is already maxed out at this moment, we are going to concentrate on maxing out his (so we will have almost the same amount in RRSP). We are going to direct our investments separately.

However we are going to close his saving accounts and make my ING saving account a joint saving account. x% of our combined paycheck will be automatically deposited into this account every 2 weeks. So this savings account is for emergency fund, vacation, wedding and house downpayment (we are living in my condo right now but we would like to move into a detached house in few years when it is hopefully cheaper).

Also we will have to change my will into our will. Will have to decide on life and disability insurance for him (I have mine through my company): get it or not and for how much. This is probably something we can wait since our expenses is not big right now and can be easily covered in one salary.

I am going to sell my car (for cheap) to one of his relative since I don't drive much so we can survive with 1 car (his). We can cut our car insurance cost this way.

In this age when job security is almost non-existent, we have agreed to shoot for FI as early as possible: pay mortgage off as fast as we can, max out both RRSPs, and savings, and probably ER for both of us. We have agreed on a budget and basic living expenses. We like the idea of FIRE but we understand that sometimes life is unpredictable.

Of course if you use the networth calculation from TMND we are way behind... For an annual combined income of $110 - 130K (30 and 31) we are supposed to have a combined networth of more than 300K (which we don't *) Oh well, we had a good laugh about this. *

Any other word of wisdom?

Jane



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Re: All good things
Old 09-15-2004, 11:10 AM   #17
 
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Re: All good things

Hello Jane. I think you are doing fine. The main thing
IMHO is commitment. It sounds like you have that.

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Life & disability insurance
Old 09-15-2004, 05:11 PM   #18
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Life & disability insurance

It's kinda morbid & harsh to consider, but while you're both employed and unless you have dependents (kids/other family) then neither of you may need life insurance.

If one of you leaves the workplace then you may want to insure the working spouse. Life insurance is great for replacing lost income while raising a family, or for equalizing estate planning & death taxes. But it doesn't sound necessary to your newly-married situation.

I understand if the life insurance is free/subsidized by an employer, but it'd be even better if the employer would cancel the insurance and pay you the premium!

Our employer let us start/stop group life insurance at our will. We kept it when we were pulling in the big bucks (for our kid) but we cancelled it as soon as we stopped working. (We still invest the premiums that we would have been paying.) If one of us croaks then the living expenses drop by an equal proportion and the kid is still provided for. If both of us croak at the same time then the kid really hits the jackpot. (Come to think of it, why is she being so nice to us lately?)

But disability insurance is probably literally a lifesaver.

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Re: All good things
Old 09-15-2004, 05:43 PM   #19
 
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Re: All good things

When I was married to wife No. One, I never bought any life insurance on her. Figured if the worst happened
I would save money

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Re: Life & disability insurance
Old 09-16-2004, 04:50 AM   #20
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Re: Life & disability insurance

Quote:
It's kinda morbid & harsh to consider, but while you're both employed and unless you have dependents (kids/other family) then neither of you may need life insurance. *
That's my thought. My life and disability insurance come with the job (can't be cancelled in exchange for money though). My SO's job doesn't come with life and/or disability insurance. But since we don't have dependent and our living expenses can be covered with one salary, getting life/disability insurance for him is probably not necessary. I like the idea of having disability insurance (much more than life insurance) but it is expensive.

Jane
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