Should You and Your Spouse Have a Joint Checking Account?

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JupiterimagesSeparate checking accounts provide autonomy, but joint accounts may lead to fewer money squabbles.
By Maryalene LaPonsie

If wedding bells were ringing for you this summer, you may be in the thick of trying to figure out how to blend your beloved's financial life with your own. One of the most fundamental decisions a couple faces is whether to treat money as a joint asset or something to be managed separately.

Traditionally, married couples have been expected to keep their money in a joint checking account, and many finance professionals tout the merits of this arrangement. However, as couples are increasingly marrying at an older age, they may be more likely to bring substantial assets, income and even debt to a union. In those cases, separate checking accounts could be appealing.

Here's why you may want to have a joint checking account with your spouse ... or not.

Joint checking accounts promote trust. When asked why a couple might want to have a joint checking account, financial planners respond with words such as "communication," "openness" and "trust."

"I think it's important to have both names on every account," says Keith Klein, a certified financial planner and owner of Turning Pointe Wealth Management in Phoenix. "It eliminates some trust issues."

Planners like Klein say joint accounts help prevent money secrets between spouses and encourage couples to communicate about financial goals.

Separate checking accounts promote autonomy. While joint accounts may keep couples talking about their money, separate accounts allow each partner to retain their financial independence. That autonomy may be particularly important to those who marry later in life and are used to managing their own money.

Emily Sanders, managing director of United Capital in Norcross, Georgia, says separate accounts can mean each spouse maintains the skills needed to take care of their money should something happen to their partner. "I find time and time again women abdicate their control of finances," she says. "With separate accounts, both spouses remain financially literate in case of death or divorce."

Joint checking accounts offer a clear financial picture. Another benefit of joint checking accounts is that they make it easy to gauge the overall finances in a family. "I believe all money should come into one account and all bills should be paid from it because it provides a clear picture of finances," says Kelsa Dickey, a financial coach and owner of Fiscal Fitness Phoenix. Too many bank accounts can muddy the waters and make it difficult to properly track spending and pinpoint areas where a family's budget could be improved.

Separate checking accounts offer less ammunition for money battles. On the other hand, separate checking accounts may lead to more harmony in a marriage if each spouse doesn't feel as if he or she has to justify spending habits.

"[Separate accounts] allow people to spend according to their personality," Dickey says. "Some people may spend every day, while others hoard it for big purchases."

Joint checking accounts mean money is never out of reach. Couples may want to keep joint accounts because they ensure both spouses can access money at any time. If only one person's name is on an account and that spouse becomes injured or ill, their partner may be unable to pull out money needed for medical expenses or other bills.

However, spouses share ownership of assets in joint accounts, which means either partner can take over management of the household money whenever needed.

Separate checking accounts mean money may not be touched by others. Sometimes, couples may not want their money to be so freely accessed by their spouse.

"There are reasons to keep inheritance money individually, especially if there are guidelines from the grantor on how that money is used," Klein says. In addition, putting an inheritance in a joint account means an ex-spouse could walk away with half its value in the event of a divorce.

Putting money in separate accounts can also be useful if one spouse has considerable debt. Money from a joint account could be garnished, but the spouse without debt can keep their money out of creditors' hands by leaving it in their name alone.

The best arrangement may combine joint and separate accounts. While there are benefits to both joint and separate accounts, the best way to manage your money in marriage could be a combination of both.

"Put all money into a joint account to pay the bills," Dickey says. "Then, you can have individual spending accounts." This arrangement requires couples to work together to pay household bills while giving them an agreed-upon amount each spouse can spend as he or she wants. Even though these accounts are meant to be used individually, Dickey recommends putting both spouses' names on the account in case one person becomes incapacitated or passes away.

At the end of the day, couples need to make a decision that works best for their marriage. "For the right people, [separate accounts] can be a route to happiness," Sanders says. "The happiest couple I know just celebrated their 70th wedding anniversary, and they've had separate accounts all their life."
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