Joint v Separate Accounts?

[Animorph]

We use separate accounts, but many of them are actually jointly held. All income is divided equally, after common expenses. We have "individual" accounts for our shares of income, however it was easiest to use joint titling of the accounts. Retirement funds, 401k/IRA/Roth/taxable are held in either name, as necessary, but are treated as one common portfolio. We each manage our own credit cards and checking accounts. We've pretty much had it like this since we got married, over 30 years now.

The benefit for us is that we each get our 50% equal share of income, but we each have individual accounts for our own spending. No family discussions required for individual spending. Easy enough to do with individual accounts if you like. For us, joint accounts mesh better with our revocable trust accounts and let me easily transfer funds as needed. Obviously that requires a level of trust, though it's all very open if everyone has the passwords and access to the budget.

[Badger]

Quote:

Originally Posted by HornedToad10 We do have yours, mine and ours accounts. However, 99% of the income goes in the ours checking and savings accounts and the individual accounts get $200/mo for personal purposes. This allows for her going to the spa or me buying a book or toy and not having it affect out join account and budget. This design makes it more peaceful where we can both do anything with our money and the other doesn't need to know or care what we did with it. The other advantage is that we can buy each others gifts or treat one another to dinner and it's actually a treat. I'm using my personal money to take her out or buy her a gift and vice-versa instead of just feeling like we're spending joint money on each other. However, we treat the vast majority of our income as joint and make joint decisions and that works very well for us. Retirement accounts are obviously separately named and I have much more than my wife but it's irrelevant if a split ever did happen since they would just split my retirement account with her to even it out.

We have been doing the same thing for the past 26 years and it has worked well for us. I tend to invest most of my allowance since I don't have a lot of "wants" and she spends most of hers. But I have also been able to buy what ever I want with it most frequently being a nice gift for her.

I never had any children. My wife had 2 grown children and a granddaughter when we married. Since then 2 more grandsons and 2 great-grandkids have been added. Except for a small sum for my sister and a little to my undergrad school the great majority of what is left will go to her children when we are gone. I don't know where else it could go so they might as well use it to make life easier.

Cheers!

[scrinch]

For 28 years we have only had joint accounts except as required for retirement accounts. We've both had small to moderate-sized inheritances, and those have gone into joint accounts too (except for an inherited IRA, but the required distributions from that go into a joint account). When our parents die, the inheritances will be larger (10-20% of our networth) and expect those will stay titled separately. I expect to treat mine as joint property though.

My mother and step-father, married for 46 years, have always kept a fraction of their savings in separate accounts. It has been a noticeable source of friction over the years...the only times when I've heard them talk about mine and yours instead of ours. I think my mother wanted the accounts kept that way because of feeling quite financially vulnerable after divorcing my father with three small kids.

[LakeTravis]

Quote:

Originally Posted by sheehs1 Sassy We keep everything separate, all checking, savings, investments and retirement accounts. It works well for us and it is backed up by a "Post" Marital Property agreement signed after marriage. At least in our state it is considered the "division of property" in a separation or divorce situation. We wrote it ourselves, researching the required legal clauses and had a lawyer review to give his o.k. that it would pass muster. So while others say "it is community property", I believe that might be in the absence of such an agreement. Check with your state and perhaps a lawyer friend to see if the divorce courts in your state "honor" post marital agreements.

We did the same - Texas does recognize a properly drafted and executed division agreement. It clearly defines separate property both present and future. Naturally, it's something we both hope will never be put to test, but it's there.

[haha]

In Washington you can get something called a legal separation and property division, and then continue living together if you want. The only person I know who used this type thing had a good megacorp job and health insurance, while her husband was a self employed contractor who would have had trouble getting insurance. She didn't really want to be rid of him, but just to separate herself from his business risks and decisions.

Washington courts are pretty free about disregarding anything that they feel like disregarding, commonly ruling that post marital agreements and many premarital agreements are effectively coerced. I won't reiterate my feelings about family court and family lawyers; only I will say that both are best avoided when possible.

Ha

[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]

Quote:

Originally Posted by HornedToad10 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]

Quote:

Originally Posted by Gumby 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]

Quote:

Originally Posted by 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.

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]

Quote:

Originally Posted by 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.

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.