Joint v Separate Accounts?

[Gumby]

The young wife and I have always had one joint account since we married over 29 years ago. (I suppose that our IRAs and 401ks are technically separate accounts, but we are each the beneficiary for the other). I expect zero inheritance; the young wife may inherit something. If and when that should occur, I'm sure she will feel duty bound to put the money in a separate account that someday will be handed down to younger members of her family (we have no children and we don't need the money). And that is fine by me.

 

[Sassy]

These are really interesting responses and I'm surprised by the number of long-term marriages that have yours, mine, and our accounts.

When I proposed me having my own account it was also with the understanding that it'd be a TOD or he'd be the beneficiary, just like what we have with the others. I'm not trying to screw him over, however, I am tired of playing the little woman who leans on her husband and accepts his decisions as the holy grail. That ain't working for me. I just want to know I can stand on my own two feet if I need to. During our conversation, I turned it around and put him in my position and then he could see my POV. He didn't agree with it, but he could finally see where I was coming from.

I also have to pause and go over things to see whether or not there are any benefits for me to do this, aside from giving myself a bit of an emergency safety net and having some me-money in case I need it. I'm convinced emotionally--for a bit of personal independence--i would rest easier. Legally, it may not matter. So maybe I'm just fooling myself in that regard.

As for the trust issue...oh, yeah, that's a long road we're going down and I don't know if it'll ever end. I really have no intention of ever letting my guard down like this again. And I know this one thing doesn't define him, but I'm having an awful time moving forward. Some days are good and then one stupid little thing will trigger something and I'm back to square one. I don't doubt that we need counseling, but right now I'm not ready to even trust a counselor to give me good advice at the rate of $100/HR. My trust level with people having my best interest at heart is low. Stupid, probably, but that's where it is at the moment.

And S in Seattle: Mr. Sassy didn't bring up the inheritance topic. I did.

Ha, you are exactly right on your observations of the US and marriage. This is my first and last marriage, regardless of how it ends.

 

[Texas Proud]

One thing that I would say is that some people are getting confused about separate property and community property.... at least as far at Texas goes...


If you have separate property when you get married... it remains separate property even after marriage... mixing the property does not make it community... as long as it can be traced it is still separate... even years later....

My DW had a friend who got a divorce.. they bought a house together (community), but he was able to show that when he paid off the mortgage it was from separate property.... so during the divorce (8 years later) he got over 90% of the house... he also had a pension before marriage... so she only got a part of the increase during marriage...


When I got married, we agreed that we would keep track of our separate property and that any earnings on it would remain separate... so we have separate accounts for that... everything that is community is mixed... I do have a new retirement account, but it is still community...

Whenever we get any inheritance, it will remain separate, in separate accounts...

Like you said, this does not mean the other does not get any benefit of the money... as long as we stay married, the other will inherit all community and separate property... and when we retire, we will use separate property to live....

 

[jollystomper]

However, 99% of the income goes in the ours checking and savings accounts and the individual accounts get $200/mo for personal purposes.

+1

We have done this for 30 years of marriage, and it has worked fine. Everything is joint except for our budgeted "mad money" accounts, where the monthly set aside has changed based on household income. If all the money isnt spent in a month, one can let it build as long as desired for a large purchase. As HornedToad10 mentioned, this is a "no questions asked" deal; DW can buy all the jewelry she wants and I can go to as many sports events or play golf as much as I want. However, we have also used this money to help others in need.

Neither of us are expecting any inheritances, but we have received small ones in the past that we chose to use towards our children, and if any future ones are received we would likely do the same.

Though I do all the finances DW has full access to them at any time. I care about her trusting me since she has had a couple of friends experience unpleasant surprises in this area.

 

[Bestwifeever]

The young wife and I have always had one joint account since we married over 29 years ago.....

Ditto. But a few more years.

 

[traineeinvestor]

We have his, hers and a small amount of ours.

For the most part, we find it's just easier to run separate finances. That and we each like a degree of financial independence and have confidence that each of us is managing his/her money properly.

My pay goes into my bank a/c and I pay some shared expenses (such as the mortgage), my own expenses and make most of the investment decisions for what is left. Likewise, DW's pay goes into her bank a/c, she pays her own expenses, some shared expenses (such as groceries and school fees) and makes most of her own investment decisions. The joint a/cs are for shared investments and little else.

It helps that there are no material tax issues that we need to consider and our estate planning is very simple.

It just evolved that way as our relationship developed. Even after 11 years of marriage neither of us has shown any interest in even considering doing anything else.

It works for us.

 

[Idnar7]

For 24 years DW has always had her own checking, savings, credit card, 401k, Roth, etc. We were both previously married. I had two young daughters and she had no children. We both have pensions. Hers goes to her checking and mine goes to the joint checking. Each month she transfers an amount roughly equal to the mortgage payment to the joint account. I pay all bills from the joint account. I manage both our investments. My former pay and current pension is a little over twice hers. I take care of any extra tax withholding, currently additional $400/mo. Even earning less, her IRA is roughly the same as mine. She was able to contribute more while I was sending my daughters through college. It works for us and we rarely have any issues about finances.

 

[martyp]

My DW and I are DINKS. We've been married 33 yrs. We have always been splitters. We each have our own accounts and we contribute monthly to a joint account for joint expenses (mortgage, food, utilities, payments, emergency funds, etc.) We both agreed on a fair contribution ratio which was always our relative incomes (typically 50/50 to 60/40). However, all of our accounts are joint accounts. We each have access to all the money. I typically pay the monthly bills.

You are obviously aware of some trust issues in your relationship. Sorry about that. Marriage is about trust and necessarily puts each of you in a vulnerable position. Money issues are a well known point of contention. 20 yrs of history could complicate things during a time of change.

Is marriage counseling an option?

 

[Hamlet]

My wife and I are coming up on 6 years of marriage. We have his/hers/ours checking accounts. We each have transfers set up into the joint to handle our big expenses, leaving us with incidental/fun money in our individual accounts. The vast majority of our money ends up in either the joint account or in our 401k's.

As money accumulates in the joint checking, I occassionally transfer some of it into our joint savings or our joint Etrade account. We also fund both of our Roths from the joint.

I have a brokerage account from before we were married that I haven't mingled. At some point we might use some of that money for a bigger house, though.

For the most part, I handle the joint finances, and keep everything in a spreadsheet listed by account.

The advantage of keeping the individual accounts, is that we don't have to look at the little purchases that each of us make that would annoy the other. As long as our transfers get made each pay period, the little stuff can be managed by each of us individually.

 

[Sesq]

I manage all the finances (bill paying, investments, credit card point harvesting). I often put things joint, but sometimes if they want a signature or something it may just be me. She is always the beneficiary, or our living trust (she is a trustee).

We have been married almost ten years. I came into the marriage with more assets, and if there is any inheritances it will be from my side. I may title that separately for a while out of paranoia (I guess). We are doing pretty well in the marriage. I can't see that changing. But we have had lower spots at times, so who knows.

 

[brett]

We had joint accounts, completely merged financials for 30 odd years from the day we were married.

Thirty years later we have split the accounts apart for tax reasons. I have a low interest demand note to my wife and most of our investments are currently in her name...as it the income. We file separate returns.

We expect to change back in two or three years-again for tax reasons. Our household expenses remain completely co-mingled as before as do our Visa and Amex accounts.

 

[Willers]

The DW and I consider ourselves lucky because when we met (25 years ago) we were both "only the shirt on our backs" poor. We looked at our relationship (and later marriage) as a partnership and all assets built as part of that so everything has been joint (with the exception of IRA's, 401k's, etc). That has worked out well for us. DW made more than I in the beginning of our marriage and I make more now. We've seen our friends struggle with the balance of power as salaries shift.

We talked about having separate accounts with some "mine-only" funds and decided that we were better off without them. We both over-think our purchases and are bargain hunters so we have access to all funds and spend wisely. I'm likely to get an inheritance (she is not) and will consider that ours.

We realize that our level of compatibility is not typical and we understand how lucky we are. I think separate accounts can be healthy when that compatibility isn't there or when there is a significant imbalance in earnings that may cause friction.

Sassy - I hope you and your DH can work through this and come to an agreement. I'm not sure it matters whether the answer is separate accounts or not, as long as it gives both of you the peace to move forward. Also, even if your state is a community property like ours, just having your own money to spend without consultation may give you the freedom and independence you seek.

One other note - I am the consummate planner, but one thing for which I refuse to plan is the end of my marriage. Even in the tough times I can't bring myself to consider that. Maybe I'm the one fooling myself and will pay a price for that, but I think it is a gamble worth taking...

 

[rodi]

Something for folks to consider. From a medicaid spend-down persepective - all assets are joint, regardless of how they're titled.

So if one spouse goes into a nursing home, and the other doesn't - the one remaining at home is termed the community spouse. 100% of the assets are considered, with set asides for the community spouse of the home, a car, burial plots, and a few other minor things. Then, depending on the size of the remaining assets - the community spouse gets between 20k and 113k.... the rest goes to pay for the nursing home. Period. Doesn't matter if the community spouse has the bulk of the assets in their name only.

Dealing with this right now with my in-laws.

 

[gerntz]

Something for folks to consider. From a medicaid spend-down persepective - all assets are joint, regardless of how they're titled.

So if one spouse goes into a nursing home, and the other doesn't - the one remaining at home is termed the community spouse. 100% of the assets are considered, with set asides for the community spouse of the home, a car, burial plots, and a few other minor things. Then, depending on the size of the remaining assets - the community spouse gets between 20k and 113k.... the rest goes to pay for the nursing home. Period. Doesn't matter if the community spouse has the bulk of the assets in their name only.

Dealing with this right now with my in-laws.

Somewhat related: If you take all the assets out of the name of the person in the nursing home such that they have no income beyond SS, then the person that pays the nursing home bill - anyone to my knowledge, not just the spouse or relatives - can take a medical deduction on their income taxes for paying the nursing home bill. Net, have someone with big income pay it & they get a healthly deduction.

 

[gerntz]

Something for folks to consider. From a medicaid spend-down persepective - all assets are joint, regardless of how they're titled.

So if one spouse goes into a nursing home, and the other doesn't - the one remaining at home is termed the community spouse. 100% of the assets are considered, with set asides for the community spouse of the home, a car, burial plots, and a few other minor things. Then, depending on the size of the remaining assets - the community spouse gets between 20k and 113k.... the rest goes to pay for the nursing home. Period. Doesn't matter if the community spouse has the bulk of the assets in their name only.

Dealing with this right now with my in-laws.

If there's enough trust between the parties involved - like parents & children perhaps, assets can be given away beyond the set asides for the community spouse PROVIDED it's done 5+ years before the person qualifies for Medicaid.

 

[simple girl]

So, I'm curious to know other's opinions and how you work it. If you have separate accounts are you suspicious that your spouse is plotting something else, do you feel "what's mine is yours", or how do you find some balance and harmony regarding this?

I'm amazed after 20 years of marriage how much we butt heads on this stuff or, more importantly, can not even understand what the other is trying to communicate. And, yes, the trust factor obviously needs some work. We'll see what time has to say about that.

Dr. Phil would just have a feast with us.

I've been off the boards for a while but last night revisited, and your thread caught my eye. I read the other thread where your discovered your husband's financial betrayal. I'm very sorry.

DH and have had joint accounts since marriage, nothing separate, ever. However, I wanted to say that if I discovered such a huge breach of my trust I would be reacting very similarly to you. I think it is normal to want to protect yourself at this point until trust is rebuilt (hopefully). My best wishes to you and your marriage.

 

[meekie]

Married for 14 years, always had joint accounts for everything. But we're DINKs, and have contributed somewhat equally over the years (he has better salary, but I have better stock options and 401k matching).

You've been through a lot though, and it seems reasonable to me for you to look to have your own accounts. Check into the legalities though, since it may not matter in the long run.

Inheritances are interesting, DH's mom has told us that we'll be getting some property from her, that we are hoping to get monthly income from in the future. My mom doesn't have much, but if I do get anything, I was somewhat planning to use it for selfish wants and for my nephews, without input from my hubby. Guess that's not really fair, eh?

 

[Bestwifeever]

I married young and had been working only a few months with my own checking/savings account. DH had no paycheck (was back in school after Army) for a couple of years. I guess he had a checking and savings account before we were married but we just opened a joint account together and closed the others.

I don't think back then that it was that common to have separate accounts. I'm sure it's much more common today with two paychecks going into separate accounts from the beginning. I'll have to ask my married kids what they do.

My meager inheritance thirty years ago went right into the joint account. DH's parents' estate lawyer advises everyone to keep inheritances separate.

 

[REWahoo]

We have his & hers joint checking accounts.

We divide up the responsibility for bill payment by expense category and divide up our income accordingly. It has worked great for almost 45 years...

 

[Chuckanut]

I live in a community property state where generally assets are considered joint even if held separately. The two big exceptions are 1.) anything one owned before the marriage, and 2.) anything one inherited when married.

Of course, records must be kept, and the above two must not be muddled together to the point where a judge can't see where to fairly divide them.
Just my 2 cents. I am not an expert in the matter.

 

[rodi]

I married later in life than many (was 38 when I got married, DH was 47).
We both owned homes, had investment/savings account. We kept them separate for the first few years. He moved into my house - and paid me "rent" towards the expenses - which were all in my name.

But - I added him to my accounts, he added me to his. But they were still, effectively his/her separate accounts. I didn't write checks off of his accounts, he didn't write checks off of mine.

When we relocated back to my home town 2 years later, we opened joint accounts. And have been joint ever since. All salaries are deposited in to the primary checking, and I pay all the bills then transfer money to savings/investments.

It works for us.

My best friend has entirely separate accounts with her husband. That works for them because they have different spending priorities/vices. (His is old motorcycles, hers is travel and clothes.)

My parents had his/hers/ours. It was a solution to the issue when my mom went back to work. My dad was so used to controlling everything financial and didn't want my mom to have any say. They stopped fighting about it when they did the his/hers/ours.

 

[tmm99]

A lot of people are listing separate accounts and all that, but I have to assume that for couples who have separate accounts, they must both work. Am I wrong in this assumption? If the spouse is a stay at home mom/dad, how could this separate account thing possbily work? By one spouse giving the other allowances?

 

[REWahoo]

If the spouse is a stay at home mom/dad, how could this separate account thing possbily work? By one spouse giving the other allowances?

Allowance? Never allow that word to cross your lips...

As I posted above, we "shared income" and expenses - whether DW was working or not.

 

[meierlde]

Somewhat related: If you take all the assets out of the name of the person in the nursing home such that they have no income beyond SS, then the person that pays the nursing home bill - anyone to my knowledge, not just the spouse or relatives - can take a medical deduction on their income taxes for paying the nursing home bill. Net, have someone with big income pay it & they get a healthly deduction.

Although the limit is now such that the first 10% is not deductable, still if your paying full freight on a nursing home, you might end up with zero net income. This is another issue on the long term care problem.

 

[Hamlet]

I think the best way to do it for a single paycheck couple would be for the direct deposit to go into the joint account and then have transfers into each spouses' individual accounts for spending money. If it is framed as the working spouse supporting the stay-at-home spouse, it is going to generate conflict down the road.

A lot of people are listing separate accounts and all that, but I have to assume that for couples who have separate accounts, they must both work. Am I wrong in this assumption? If the spouse is a stay at home mom/dad, how could this separate account thing possbily work? By one spouse giving the other allowances?