Factors Couples Need to Consider when Holding a Joint Account

Money tends to be a sensitive issue for married couples, especially those that just tied the knot. Whether you decide to keep your savings in separate accounts or combine them in a joint account, the decision of handling money matters often boils down to finding a system that works for both husband and wife.

Many couples in Texas incorrectly think that if they keep bank accounts separate, then they continue to solely own those accounts, and that the spouse would have no claim to that account in which he/she isn’t named in. If your intention is to truly keep bank accounts separate, the best way to accomplish that would be through a well drafted pre-marital agreement, also known as a “prenup.”

It is important to note that although bank accounts are often referred to as “separate” when only one spouse has his name on the account, this is generally not determinative of whether the funds in the account will be treated as marital or separate property in divorce. Depending on the situation, money deposited into an account may be considered community property under Texas law. For example, an inheritance is separate property, but your monthly income once married is not. The presumption in Texas is that funds are community, and it is the burden of the individual making the separate property claim to trace that separate property. Despite these issues of when community property is acquired, for many couples, there are many reasons to maintain a joint account, some of which we’ve outlined below:

  • A joint account simplifies your financial lives, eliminating the need to track multiple accounts
  • You don’t have to worry about transferring money between accounts
  • In case of emergencies, you don’t need written permission for your spouse to access your account and vice versa. This is especially important in the unfortunate event of a spouse dies before you
  • Managing one account together encourages regular discussions on your finances
  • It fosters cooperation when meeting financial targets
  • It forces spouses to treat household income as shared money
  • It eliminates petty arguments on sharing the bills

If you decide to join your accounts into a single joint account, there are some matters to discuss with your spouse.

Set Rules

Talk to your spouse about your spending limits after paying your monthly bulls. Discuss your budget early on to avoid bouncing checks, over drafting, and potential arguments about your finances. The success or failure of your joint account’s role in managing your finances depends on setting spending boundaries and identifying financial goals.

If you wish to maintain bank accounts prior to marriage separate, they should remain separate, and co-mingling of assets should be avoided.

Resolve Relationship Issues, If Any

One of the biggest criticisms of opening a joint bank account is how it gives each spouse 100 percent control and rights over that account and the money in it. In other words, it allows either of you to withdraw or spend the money in that account whenever you please.

If you are concerned about your spouse spending that money or taking it all out, then you need to resolve some issues about your relationship. Indeed, a joint account makes life more convenient, but it can complicate matters when a relationship ends in divorce and assets have to go through property division.

The Bottom Line

The bottom line is, if you trust your spouse, you shouldn’t have any problems with a joint account. It makes paying bills easier, taking out money faster, and putting in money whenever you need to more convenient. It’s sharing another part of your life together, which is really what marriage is all about.

Whether you have one account or twenty as a married couple, remember to treat your finances in a unified manner and keep lines of communication open so there is an understanding of what the expectations are. If you would like things clearly defined, consider a Texas pre-marital agreement.

If you would like to know how a joint account affects your relationship today and in the future, talk about the legalities of family law with our legal team at Lyttle Law Firm. Contact us by calling 512-215-5225 or by filling up our online contact form.

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