• Margaret Curtis, MD

Money Management for Couples: Joint and Individual Accounts

Updated: Jan 30, 2019

My husband and I have always shared all our money and owned our property jointly. Only our retirement accounts are individual, because legally these can only have one owner. I even gave him a 49% ownership share in the Best Dog Ever, the one that preceded my husband (you will note I kept a controlling share).

Cute Kid and the Best Dog Ever
Best Dog Ever

I am a staunch believer that women should have full knowledge and control over their own money, but it never occurred to me that my husband and I would keep our finances separate after we got married. We did this because that’s what our parents did and because we assumed marriage meant merged assets - and neither of those is a particularly good reason.

There are good arguments both for and against separate accounts for couples. There are also circumstances in which asset ownership matters a good deal. (note: I use the word "marriage" frequently here, but this goes just as much for long-term relationships. I also do not assume opposite-sex or same-sex.):

Separate and Equal: reasons to have individual accounts

1. Protecting assets. Like a prenup, separate accounts can protect what you bring into the relationship. This is especially important if either of you has kids, has been married before or has spent a long time in the workforce building up assets.

2. Autonomy. Some people, by temperament or training, need to have control over their own money. All of us should know where our money is and how to access it in an emergency.

3. Fairness. Some couples split shared expenses down the middle, but in cases of income disparity (as with a physician and a non-physician) it is common to contribute in proportion to one's income. Actually, joint accounts do exactly the same thing, but if separate accounts make you feel more certain of the fairness of your arrangement then so be it.

What's Mine Is Yours: reasons to have joint accounts

1. Simplicity. Trying to keep track of twice the number of bank accounts would drive me to drink.

2. Transparency. One partner's spending is less likely to reach disastrous proportions - as long as the other partner is paying attention.

3. Fairness. We contribute equally to the household in money+time. Most of what we earn goes to savings, daily expenses etc, and we each have a small, equal amount of "fun money" to do with as we please each month. This arrangement seems fair to us.

You will notice that "fairness" can be said to apply to either arrangement. You will also notice that I did not bring up "trust". Pooling your money is an act of trust, and so is ceding complete control to a partner of money you may, presumably, need to rely on. You can define "fairness" and "trust" in ways that seem most reasonable to you. And to make any of these work, you still have to understand your and your household's finances. There is no arrangement that relieves you of this responsibility. I do more of the money management, so I regularly update my husband and I keep detailed records of where it all lives, for him and for our estate executor.

Of course there are more than two options: you can decide which assets you title jointly and which to keep separate. Here are a few specific areas to consider:

Debt: student debt cannot be discharged in bankruptcy so be cautious before signing someone else’s loans or taking out loans on behalf of partner - say, because you have a better credit score or a better chance at loan forgiveness.

Credit: there are ways to get out of credit card debt without dying. But any late payment or default will affect your credit score as much as your partner’s. Having a credit card in your name only is an easy way to protect and improve your own credit history, and could be crucial if you need to exit the relationship.

Property: owning property as joint tenants in common can shield it from medical malpractice lawsuits. With property, joint ownership is actually protective. But, the same holds true for late mortgage payments as for late credit card payments - your credit will suffer even if you were not at fault.

Last, I disagree with the notion that keeping your money separate gives one a mental "out" from a relationship. Legal marriage, children and home ownership are mighty barriers but marriages still end, so individual bank accounts are probably not determinative. Or to put it another way: if lack of access to your own money is keeping you in a relationship, then that is a relationship you need to get out of. Joint everything has worked well for me and my husband, but if you want to keep your money in your own name - because it makes you feel better, because you have a different style with money than your spouse, because your grandmother told you a woman should always keep a spare $20 in her purse - then go right ahead.

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