Do married couples have joint bank accounts

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 this arrangement as engendering trust between partners as they blend their financial lives and assets. "You are folding your lives together," says Drew Kellerman, founder of advisory firm Phase 2 Wealth Advisors in Gig Harbor, Washington.

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. "If they have had a nasty prior divorce, they will be more protective of their finances," says Mela Garber, a tax principal with New York City-based accounting firm Anchin and leader of its Matrimonial Advisory Group.

The question of whether to use a joint checking account isn't limited to married couples either. Parents may wonder whether to open a joint account with teens to monitor their spending and adult children may consider a joint checking account to help manage their aging parents' money.

With that in mind, if you're considering setting up a joint bank account, here are the benefits and drawbacks to factor in first.

Pros of Opening a Joint Bank Account

• Joint checking accounts promote trust and transparency.
• Joint checking accounts offer a clear financial picture.
• Joint checking accounts make it easy to plan and pay for expenses.

Read on to learn more about the advantages of opening a joint checking account with your spouse.

Joint checking accounts promote trust and transparency. Ask financial planners about the benefits of joint checking accounts, and they will likely point out that shared accounts foster communication and trust. In order to manage money together successfully, couples must be open about their financial wants, worries and goals.

With joint accounts, spending can be easily viewed by both spouses and that level of openness can be reassuring. "Financial trust is a pretty major component of marital trust," Kellerman says. He is quick to add that there is no reason to believe those with separate accounts don't also have open and honest relationships, but among his clients, those with the most harmonious relationships tend to lean toward joint accounts.

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. "It's easier to budget when everything is in one pot," Garber says. 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.

Joint checking accounts make it easy to plan and pay for expenses. 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.

Cons of Opening a Joint Bank Account

• Separate checking accounts promote autonomy.
• Separate checking accounts mean money may not be touched by others.
• Separate checking accounts offer less ammunition for money battles.

Keep reading for more information on the disadvantages of opening a joint checking account.

Separate checking accounts promote autonomy. Some people may balk at combining their assets with another person, even someone they love deeply. "If two people get married after establishing their own separate careers and building up their own financial assets, the transition to a joint checking account might seem rapid and unnatural," says Celeste Hernandez-Revelli, a certified financial planner and director of financial planning at eMoney Advisor, a provider of wealth management technology.

Separate checking accounts mean money may not be touched by others. Separate accounts allow each partner to retain their financial independence and spend or save how they want. That, in turn, may lead to more harmony in a marriage if each spouse doesn't feel as if he or she has to justify spending habits. That autonomy may be particularly important to those who marry later in life and are used to managing their own money.

Separate checking accounts offer less ammunition for money battles. Keeping money separate also avoids a scenario in which a marriage goes bad and one spouse cleans out a savings account, leaving their partner with nothing. 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 his or her name alone.

However, don't think establishing separate accounts means spouses never have to talk about money. "In any successful relationship, you have to have some sort of open discourse about finances," says Kerry Jackson, certified financial planner with wealth management firm Fish and Associates in Memphis, Tennessee. It's hard to achieve marital harmony without some type of ongoing conversation about shared financial goals, regardless of how daily expenses are handled.

The Best Arrangement May Be Combining 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. "The way I see it, it doesn't have to be all or nothing," Garber says.

"When I talk to couples, I recommend a blended strategy," Jackson notes. Spouses can funnel paychecks into one joint account for household bills and then divvy up personal spending cash in separate accounts. Another option is to have paychecks deposited into separate accounts and then transfer an agreed upon amount to a joint checking account to pay bills. Either way, it's wise to create a mechanism, such as a power of attorney legal document or transfer on death provision, that allows each spouse access to cash in separate accounts should one person become incapacitated or pass away.

At the end of the day, couples need to make a decision that works best for their marriage. "Part of this conversation starts with setting financial priorities together, understanding each other's values and aspirations, and where there are commonalities and differences," Hernandez-Revelli says. If you and your spouse have trouble starting this conversation at home, meeting with a financial planner may help.

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