Is Keeping Separate Banking Accounts Preparing For Divorce?

[2moretrees]

I just had a lively discussion with my financial girlfriend group over lunch as to whether people that are married that separate their banking accounts are financially wise or are planning for an early divorce.

What is your opinion? Are separate accounts good money management or do the foretell that you don't care or trust your partner and are looking to make the divorce clean and easy when it happens?

[hakuna matata]

Well without knowing the people involved in that decision and their personalities, it seems a tough question to answer. But I don't see it as a foretelling a divorce, I see it as a way to have some control of your own money.

My wife and I each have a separate account, and a joint account. We have split the bills and each contribute a set amount into the joint account to pay those bills. We also have a joint credit card we charge everything to (dinner, groceries, etc) and at the end of the month we split that bill and pay out of our individual accounts.

I then have 'my' money and she has 'her' money to do as we each wish. My wife loves jewelry, and I enjoy buying shop equipment, etc. I find it somewhat satisfying that when my wife takes me out for say my birthday it is with 'her' money and she is actually treating me and when I do it to her it is the same. It has more meaning somehow for me that way---I have done it reverse and it seems that in essence you are taking yourself out for dinner! Now of course it is all in how you look at it--but that is how we look at it and this system works for us. To each their own.

As long as we have enough to pay our bills each month, the remainder gets spent per however I or my wife wishes. This works very well for us--she doesn't feel I am trying to control her money and I feel the same way. It works very well for our personalities--but I can certainly see it not working for everyone. But my wife and I are very good communicators and I don't see any divorce on the horizon

[maat55]

We have separate accounts, but we are in agreement on how they are used. When there is complete separation, beware. You need to sit down together and make a budget and financial plan. I don't know your relationship so you need to work with your partner in a way that is as non confrontational as possible.

[Like2Plan]

I think it has to do with the personality type of the individuals involved. Some folks like to keep track of everything and keep everything "fair". It is just the way they account for everything.

DH and I have wondered what happens at retirement with folks who keep everything separate. I mean, what if one person is a saver and has saved for retirement and the other person is a spender and has nothing saved. Does the saver order a steak dinner while the spender orders hot water and ketchup?

Also, I always thought that if you were married you were responsible for the debts your spouse incurred? (Maybe that varies from state to state?) So, even if everything is separate, but one spouse has mega-debt and then unfortunately passes away--isn't the surviving spouse still responsible for the debt anyway?

[moneybags]

Originally Posted by 2moretrees

Are separate accounts good money management or do the foretell that you don't care or trust your partner and are looking to make the divorce clean and easy when it happens?

It wouldn't matter to me what account the money is in. If I were in a divorce situation, all money is "ours", and I would expect to keep half of it.

[disneysteve]

This issue comes up periodically and it always degrades into an argument.
Those who keep separate finances can't imagine doing it any other way and giving up some measure of control of their money.
Those who keep everything joint can't understand how a couple could keep their own accounts and still consider themselves married.

The bottom line, though I honestly don't understand it myself, is that both systems work for different couples.

Personally, we combined our money when we got engaged. We consider everything that comes in to be joint assets. We are a team. We work together to achieve common goals. Having separate accounts or hiding money from each other or spending without consulting the other would sabotage those goals.

All of that said, there are circumstances where separate accounts are appropriate or even mandatory. Second marriages can fall into that category, especially if there are pre-existing children involved whose interests need to be protected. Also if one spouse is wealty going in to the relationship and wants to protect those assets. Or if there is a substantial inheritance, which legally belongs to the individual, not the couple.

[FrugalIII]

My wife (ex) and I from the day we married each had a joint account and we had a joint "household" account used for paying bills. We contributed to the joint account based upon an equal percentage of our incomes. In other words, rather than contribute the same dollar amount, which would not be fair to the one earning less money, we each contributed the same percentage of our income. It worked out great. We never had a joint credit card. When we divorced it made things much cleaner. Since we did not co-mingle our remaining funds, we each just kept what we had. As far as retirement funds, we each contributed to our own. We had no joint investments either. At no time did we feel like we were preparing for divorce ahead of time. It just seemed like a fair way of doing things. She was a spender, me a saver. So I didn't have to worry about her spending too much of the bill money and she didn't worry about me saving too much, as we would if everything was joint. Worked great. Not for everyone, but wonderful for us.

[Caoineag]

We have had separate accounts (as in both of us named but only one uses) for most of our relationship but part of that was personalities and part of that was convenience. With everything going on, separate accounts let us handle our finances better. We now have access to both accounts and manage the budget as one budget but we are still "in charge" of our separate accounts. (If one account needs money from the other, we ask the other person what is going on with their account). We are moving towards joint everything now (slowly but still moving) because our lives and finances have drastically simplified and we are more comfortable with the idea than we were earlier in life (very independent personalities).

As to divorce, everything is joint except for inheritances so it isn't preparing for divorce even if someone does see it that way.

I do think the joint vs separate account debate is directly related to how you view marriage. If you view a marriage as two people becoming one, you are more likely to see joint accounts as the only way. If you view marriage as a partnership of two very different and independent people working together, you are probably okay with or even prefer separate accounts. At least that has been my experience with all the couples I know.

[ActYourWage]

Originally Posted by disneysteve

This issue comes up periodically and it always degrades into an argument.
Those who keep separate finances can't imagine doing it any other way and giving up some measure of control of their money.
Those who keep everything joint can't understand how a couple could keep their own accounts and still consider themselves married.

The bottom line, though I honestly don't understand it myself, is that both systems work for different couples.

Personally, we combined our money when we got engaged. We consider everything that comes in to be joint assets. We are a team. We work together to achieve common goals. Having separate accounts or hiding money from each other or spending without consulting the other would sabotage those goals.

All of that said, there are circumstances where separate accounts are appropriate or even mandatory. Second marriages can fall into that category, especially if there are pre-existing children involved whose interests need to be protected. Also if one spouse is wealty going in to the relationship and wants to protect those assets. Or if there is a substantial inheritance, which legally belongs to the individual, not the couple.

Good way to put it! As for my wife and I, we have joint accounts. I personally don't see how a couple could do it any other way.

[fruitbowlk]

We have separate everything. I didn't think this would be the situation when I got married but my husband is a very strange person. It bother me at first but it's doesn't now. I'm a saver and he isn't I have triple in my retirement than he does. I can go out to eat and buy nice things and he can't. I'm going to the bahamas in dec. and he's not because he can't afford to go. would all this be different if we had joint account probably but this is how he wants it so this is how it's going to be. If we got a divorce and I had to split everything I have straight down the middle I would be pissed. I work hard to save and invest and he doesn't. He love his cc's and I don't I have one that I'm paying off fast and he has several he's paying off slowly. We are just two different people that have two different out looks on life.

[DebbieL]

I think keeping separate bank accounts helps keep your marriage INTACT and prevents a lot of fights. My DH and I keep our accounts separate for the most part (we do have one joint savings account). We are the happiest couple I know, and we've never had an argument about money.

[disneysteve]

Originally Posted by fruitbowlk

I can go out to eat and buy nice things and he can't. I'm going to the bahamas in dec. and he's not because he can't afford to go.

Please don't take offense at this, but I find this incredibly bizarre.

[geojen]

Originally Posted by disneysteve

Please don't take offense at this, but I find this incredibly bizarre.

I would have to agree (again, no offense intended). How does that work? Doesn't it breed jealousy/hard feelings between you?

[feh]

Married 19 years and we've never had separate accounts of any kind. I've always been of the opinion that when you marry somebody, you are becoming a team, and that includes your assets.

We never argue about money. Any large purchases are simply discussed before they are made. My wife and I don't think along the lines of "this is mine, that is yours". Everything is simply "ours".

A couple of my best friends both keep their finances separate in their marriages. If that works for people, then more power to them, although it does seem counter-intuitive to me.

[LivingAlmostLarge]

Originally Posted by fruitbowlk

We have separate everything. I am going to the bahamas in dec. and he's not because he can't afford to go.

No offense either, but HOLY COW. I'd be pissed if my husband ditched me to go on vacation because I couldn't afford it. How does he "Understand".

What happens if he dies and leaves you with all his credit card bills?

Frugalfish, so why'd you end up divorced if everything was separate?

I have it joint, but I think there are cases where separate is warranted.

[moneybags]

Originally Posted by fruitbowlk

. If we got a divorce and I had to split everything I have straight down the middle I would be pissed. I work hard to save and invest and he doesn't.

I'm no legal expert, but I'm not sure it matters. DH works FT, I work PT. He has a lot more in retirement accounts in his name, than I have in mine. I feel entitled to the money in his name as much as he is. That's the thing about marriage, for the most part, it puts all your assets & debt together legally.

[Caoineag]

Out of curiosity, for the people with joint accounts, do you have only one person doing the majority of the bills?

The only reason we would even consider a joint account now is that my husband only pays the rent anymore (rest gets alloted to savings and my account when needed) and I use a credit card paid in full for the majority of bills so we wouldn't have to worry about things getting out of control.

[fruitbowlk]

Originally Posted by disneysteve

Please don't take offense at this, but I find this incredibly bizarre.

Originally Posted by geojen

I would have to agree (again, no offense intended). How does that work? Doesn't it breed jealousy/hard feelings between you?

LOL. No offense taken. It's is bizarre but what I'm learning is that when you have issues you haven't resolved in your childhood and carry them in your adulthood and decide to marry and have a child your life can very different from others. I never thought this would have been my marryed life but it is so I go with the flow.

[Gruntina]

Depending in what state you live in, having either a joint account or separate account is not going to prevent you from not splitting your asset in half in the case of a divorce.

They determine what you earned or were given during the time of marriage to be shared property between the two of you regardless if your name is on the account or title or not.

In state like California, having separate account to protect you in the case of a divorce is just moot.

Beyond that, each couple has to determine how to handle the divorce (or their lawyers).

[feh]

Originally Posted by Caoineag

Out of curiosity, for the people with joint accounts, do you have only one person doing the majority of the bills?

The only reason we would even consider a joint account now is that my husband only pays the rent anymore (rest gets alloted to savings and my account when needed) and I use a credit card paid in full for the majority of bills so we wouldn't have to worry about things getting out of control.

Yes, one person (me) pays the bills each month.

My wife carries the checkbook, but we use our credit card as much as possible. If she has to write a big, unexpected check for some reason, she transfers money into the account to cover it.