Harrowing tale of a joint bank account...

[Octavia]

Date: 4/24/2009 3:38:01 PM
Author: purrfectpear
Just so you'll all know, it's perfectly legal for a spouse to clean out a joint account in it's entirety...regardless of the 'percentage' they put in there

I wouldn't want any of you youngsters harboring any naive assumptions

If you want to protect yourself from 'what if's' you need to have your own personal savings account. It is still considered part of community property in case of divorce, but at least he/she would have to fight for it in court...not just withdraw it at the teller window.

The laws regarding division of marital assets vary by state, and most states aren't pure community property jurisdictions. While co-mingled assets acquired during marriage are often divided between spouses, it's not always that simple...and there are definitely different laws that apply when two unmarried people share an account. It's always best to be both cautious AND informed -- so if anyone wants to know what applies in your specific situation, check your state's laws on it.

 

[LaraOnline]

Date: 4/24/2009 2:25:16 PM
Author: absolut_blonde
I'm a fan of the 'three accounts' system for spending money - individual accounts for each AND a joint account. Joint is for shared bills/expenses -- mortgage, utilities, groceries, travel. That money goes to bills in both of our names so there would be no benefit to one person squandering the cash anyway since you'd be screwing yourself in the process too.

Ooh, that system is a good idea!
Although I would probably prefer to have most investments in both names... that way, you share the pain, AND the good times!!

I think joint accounts are seen by the Australian Government as 'proof' that there is a genuine (de facto) marriage going on, so therefore each partner has full 'marriage rights'.
In practise, this can mean that the loafer boyfriend (who doesn't want to marry you, or adapt to work in with your lifestyle) gets to clear out with half your cash!

I mean, obviously any partner who did that would have to have either a strong grievance, low ethics and/ or as diamondseeker has pointed out, be a lousy 'catch' in the first place!

Somehow it seems even more unfair when a man does this to a woman, because a woman's earning potential is usually less than a man, due to lifestyle expectations (such as future motherhood and marriage commitments prioritising husband's work) .

In one case I read, a girl had to sell investment properties she had bought (I can't remember whether it was just properties she had bought while they were together, or properties she had brought prior to the relationship as well) to pay him when she was pursued by him (government funded legal aid lawyer, I believe) for the money!

Be advised!

 

[Deelight]

Date: 4/24/2009 9:46:29 PM
Author: diamondseeker2006
In principle, I''d say someone who doesn''t trust their future spouse enough to combine finances (after the wedding), then they probably do not have a good enough foundation for marriage. Ours has been combined since day 1. We do have multiple accounts and all are joint, but we each keep a checkbook for incidental expenses while bills come out of the main account. It''s worked for 30+ years so far. I pretty much keep the books at home because hubby has to do budgets, etc. for the plants he manages.

For me it has nothing to do with trust - personally I just like to know whats mine and what is his - we combine money out of accounts if need be but I like my independance.

 

[Rhea]

Strangly enough after my earlier post, we have joint accounts. We simply don''t make enough money to have the three account approach work. All money is joint for bills and savings, with both of us having very very small fun seperate accounts (less than £300 in there). Maybe when we make more we''ll change, but by that time we''ll have had joint accounts for so long.

 

[neatfreak]

Date: 4/25/2009 7:23:46 AM
Author: Addy
Strangly enough after my earlier post, we have joint accounts. We simply don''t make enough money to have the three account approach work. All money is joint for bills and savings, with both of us having very very small fun seperate accounts (less than £300 in there). Maybe when we make more we''ll change, but by that time we''ll have had joint accounts for so long.

Maybe I a misunderstanding you but it sounds like you do have three accounts?

 

[Rhea]

Date: 4/25/2009 8:59:40 AM
Author: neatfreak

Date: 4/25/2009 7:23:46 AM

Author: Addy

Strangly enough after my earlier post, we have joint accounts. We simply don''t make enough money to have the three account approach work. All money is joint for bills and savings, with both of us having very very small fun seperate accounts (less than £300 in there). Maybe when we make more we''ll change, but by that time we''ll have had joint accounts for so long.

Maybe I a misunderstanding you but it sounds like you do have three accounts?

Yes, we do. But if either of us cleaned out the joint account, the one both pay checks go into, the other person would only have £300 or less in their individual account. My personal account has around £108 in it right now. I *think* his has about the same. So yes, we do have three banks accounts, but the individual ones are so low that we''d really be screwed if the other person decided to take the money and run.

Someday we might have a true three account system, each with cushioning in it, but there''s not enough to go around for that right now.

 

[LadyBlue]

I''m sorry for your friend, I think is a good idea always to keep some money in a personal account. Besides the couple account.

 

[iheartbora]

I thought there are joint accounts that require both signatures for withdrawals? Is that safer?

In any case, I''m not a big fan of joint accounts either, you never know what will happen down the road. I think I will try to stay away from it if possible and propose splitting the duty of paying bills (you take care of cable, internet etc and I''ll get the gas and electricity)...

 

[chocolatefudge]

When we opened our joint account we were given the option of needing one or both our signatures to withdraw money so the bank leaves it up to each individual couple.

I have the three-account approach and it works well for us. We each put the same amount into the joint account when we are paid which covers the mortgage, utility bills, phone bill, internet etc. We then each have our own accounts with our own money which we can spend as we please.

Someone earlier posted that they would be worried about one person not paying into the account, if I thought this was an issue there''s no way I''d open the account in the first place, but as someone else said, to not have this trust in your partner does not make for a very secure relationship.

To the person who said they would never have a joint account, I think this would cause more problems. If myself and my SO didn''t share an account for the mortgage etc it would mean one of us paying for some of the bills and one paying for the others. As they would never add up to exctly the same each month I''m sure this would cause upset as one person would be contributing more. I much prefer us to both put an equal amount into one account.

 

[ilovesparkles]

This is quite a fascinating thread! H and I have yet to really talk about it. We have briefly, I am torn because when my parents divorced, my dad filed for bankruptcy which forced my mom to sell the house or loose it as an asset. Messy story... it left me with a sour taste and leaning towards separate accounts. H doesn''t understand why a married couple would have separate accounts. Perhaps the 3 account system will be an answer. To of course make it more complicated, I make more money. Neither of us are good with finances, hoping his dad will help out there...

Anyways, I''m rambling, sorry to hear about your friend!

 

[White Orchid]

Date: 4/24/2009 2:25:16 PM
Author: absolut_blonde
I think dumping ALL of their money into the joint account was ill-advised and I wouldn''t do that even if married.


I''m a fan of the ''three accounts'' system for spending money - individual accounts for each AND a joint account.

Ditto. We have this system set up too. Luckily for me I handle all the finances. I''m not sure DH would know how to pull out all the money even if he wanted to!

 

[sunnyd]

Date: 4/25/2009 1:12:28 PM
Author: chocolatefudge

Someone earlier posted that they would be worried about one person not paying into the account, if I thought this was an issue there''s no way I''d open the account in the first place, but as someone else said, to not have this trust in your partner does not make for a very secure relationship.

That''s just it though. He obviously did trust her. Who would ever think that the person they love and want to marry to steal your money and run? It''s risky.

 

[supergirl10]

wow i am so sorry to hear about your FI''s friend sunny, what a crappy situation to be in. I have also heard stories of this happening to Aussie soliders while away on deployement and their wives/gf/partners taking everything!

It is interesting that most of you either have the three a/c system or completely separate accounts. When my mother found out that my then bf and i didn''t have a joint account she didn''t hold back on telling me how strange she thought it was.

Her opinion was that if you are in a committed long term relationship you would have a joint accounts, she thought it was a very odd situation that we didn''t.

We have later conbined finances due to me being unable to work at the moment due to my prac requirements for uni. But the point of this post is that i am glad to see this is definetly not necessarily the normal.

 

[Dancing Fire]

everybody should have their own "secret stash"

 

[absolut_blonde]

Date: 4/24/2009 10:20:38 PM
Author: PrincessLily2009
Right, but let's say one of you spends all their fun money, plus borrows extra, and then they can't make their contribution to the shared account. The other will either have to sacrifice their spending money to pay your share of the bills, or you will both just have unpaid bills.

I'm just saying that the 3 account system only works for a certain type of person/couple.

Money goes into our joint account first, no questions asked. Every paycheque we get, we put in $x to our joint account. Not contributing to our joint account is simply not an option - it is the priority. Our mortgage and bills come out of that account. Plus we contribute a little extra each month so we are slowly building a cushion.

Fun money is, by our definition, whatever is left over after the joint and individual bills are paid. If for some reason, I had a lot of bills/expenses and were to only end up with $150 fun money (as a random example) for two weeks-- well, so be it. I'd have to make do. Fun money is just mad money, stuff for shopping or other non-necessary expenses.

Neither of us would dream of letting fun money interfere with the bills getting paid and honestly, I would never be with someone who would. Barring something catastrophic, if SO pissed away his money irresponsibly and couldn't pay his portion of bills? I'd leave him. I couldn't in good conscience stay with someone like that, particularly not when we'll be having kids someday and I would be even more financially vulnerable (working part-time or possibly not at all, for awhile etc).

 

[MishB]

My husband (of 6 years) and I don''t have a joint account, we each have our own spending accounts, and our savings is in an account in his name, purely because he was the one who opened it. There is a significant amount of money in it, and I don''t have a problem with that at all. If he took it and ran, the money would be the least of my concerns.

 

[Haven]

Wow, sunny, I'm sorry to hear about your friend.

As for the joint accounts, DH and I have one joint checking account and one joint savings account. We have separate investment accounts that we've both had since before we married, and a lot of my regular paycheck goes into those accounts, but the rest goes into our joint checking, and then I move 20% of all checking deposits into our savings.

It works for us. We tried doing the three accounts system, but that was just a mess for us. (Partially because DH owns his own business, so we have a business account as well, both of our names are on it, and we filter his income through that first. It was just a lot of accounts to juggle for us. We need to keep it simple.)

I agree with DiamondSeeker that if you don't want a joint account because you don't trust your SO, that's probably a red flag. BUT, if you just want to keep things separate because it's an independence thing, I totally understand that. Everyone is different.

I also would never combine anything financial with a SO until we were married, but that's me. (Heck, I wouldn't even live with him.)

 

[sunnyd]

I got another detail on the dental bills thing. I didn''t know this was possible either, so I thought I''d share as a PSA.

They were not on the same insurance, so the bill wasn''t in his name. But the bill did come to his address, and since she left no forwarding address, the bill is now his to pay. He is working with a lawyer, but he won''t get anything back.

 

[tlh]

Date: 4/24/2009 2:06:22 PM
Author: swingirl
I understand the empyting of the joint account but I don''t see how he could be responsible for someone else''s dental work under any circumstance. And if you have car insurance how can you be sued for an accident? I thought that was what insurance was for. He needs an attorney.

The bankruptcy will end up hurting all of us. This poor fella needs to get a grip on his responsibilities.

Insurance is a tricky thing. Your insurance company will try to settle an accident w/n your policy limits. However the state minimum in many states is EXTREMELY LOW!!! Some states as low as $5,000 for your property damage! So just because you have "the state required coverage" doesn''t mean you are adequately insured, and you could be what is referred to as an "under-insured motorist" So in this example, you''d meet the state''s requirements, but how many people on this board alone have a vehicle that is worth over $5,000?

But where the real tough stuff happens is w/ bodily injury. Those same states have mins as low as $15,000 per person, or $30,000 TOTAL per accident for bodily injuries. Which what that means, is... if 3 people are in the car - and are all injured... Let''s say one person has $20,000 in medical bills alone. That means, your insurance will only cover $15,000 TOTAL for that one person. If all three people are injured and have $20,000 of medical bills a piece - your insurance will only cover $30,000 TOTAL per accident.

So what happens? If your insurance company cannot settle w/n your limits... lets say these people don''t have "under insured motorist coverage" on their own policy? They will SUE YOU. Even though you have insurance. Your insurance company will try to protect you... but you have to know what you purchased. If you have assets... JEWELRY, CARS, HOUSES, etc- you better make sure you have enough insurance. 1 bad accident... even when you are THE MIDDLE CAR - can put you into a lawsuit.

 

[purrfectpear]

One tiny thing to remember about all those horrid, nasty, vindictive, spiteful divorces that you hear about................


they all started with trust too

Divorce typically brings out parts of people you never had a clue even existed

 

[Haven]

PP--Sadly, I totally understand what you''re saying. (Though, I do have a friend who entered into a marriage without trust, but that''s a story for another time.)

The combining of finances is just the right answer *for us.* Different lives, different answers.

 

[choyoyo]

I like the independence of an individual account- I would feel weird buying make up, surprise presents and jewelry on a joint account. I also like the idea of the individual accounts being small fun money accounts, whereas the joint accounts are for bills and savings/investments so we don't overspend our goals.

My FI, on the other hand, only wants a joint account because he doesn't see the point in maintaining both. He makes significantly more than me, but I handle all the finances because it drives me crazy when bills are paid late and numbers don't match up. And he doesn't keep track of stuff like that very well. He told me that I don't even need to consult him on things that I buy, since I'm more frugal than him anyways, except for bigger expenses like cars.

I think I'll probably give in and just maintain the joint accounts with my FI, because it would feel a bit unbalanced if only one partner has two accounts since FI doesn't particularly want to. Thoughts?

 

[Allison D.]

In principle, I'd say someone who doesn't trust their future spouse enough to combine finances (after the wedding), then they probably do not have a good enough foundation for marriage.

I'd agree with this concept in principle, but not always in practice.

Sometimes, it's not about 'trust'. Different individuals have different skill sets; some are savers and some arent.

I know a lot of really sweet people for whom money management is a weakness. I think a successful marriage is as much about knowing what strengths each person brings to the union and what potential weaknesses may cause problems, and then jointly agreeing on ways to navigate among them.

I know a couple where the hub is great with money and the wife not so much. If they operated within a joint account, I can easily see where they might run into trouble. His mental comfort level is at least $2k in cash flow; hers is more like $200. I don't think they'd function well together if relied on a joint-accounts-only system. Fortunately, she admits she isn't the best choice to manage the funds.

They each have a personal account; they also have another account that's joint. Since the joint account is really just a vehicle to make payments from, he doesn't have to worry about her differing comfort level since there's seldom much in there beyond what they pay bills with.

It works for well for them, and I think it's smart for couples to consider what methods might best suited their shared financial goals while also incorporating awareness of their individual spending/saving philosophies.

 

[swimmer]

Hugs to Monie!

yikes about the friend being wiped out...perhaps he could switch to public transport in order to prevent future accidents?

Personally we have been too lazy to combine savings accounts. We each have our own ING savings, IRAs, mutual funds, 401k, 503b, etc, perhaps my sister is still listed as my beneficiary? I should take care of that... Going to have to agree with DF here, everyone needs a bit of mad money (I say this as a super responsible saver with over 2 years salary in the bank). I like being able to purchase gifts for DH without him knowing the cost, and sometimes things for myself that are a bit of a splurge. Not that he minds, but I just like having that freedom.

Many of us who got married after decades of independence still need a bit of it. That isn''t about trust or a lack of it, just a joy in the financial independence that we maintained for years that we can still savor while married. I''m very happily with someone who saves and spends the way I do, but equal parts freedom and laziness mean that we have a joint cc, but separate savings and investments.

 

[MonkeyPie]

Date: 4/25/2009 7:23:46 AM
Author: Addy
Strangly enough after my earlier post, we have joint accounts. We simply don''t make enough money to have the three account approach work. All money is joint for bills and savings, with both of us having very very small fun seperate accounts (less than £300 in there). Maybe when we make more we''ll change, but by that time we''ll have had joint accounts for so long.

Ditto this. If we made more money, sure, but otherwise there just isn''t any point. Not to mention we share VERY well - no need for any, "This is MY money!"

 

[absolut_blonde]

Date: 4/28/2009 12:12:55 PM
Author: sunnyd
I got another detail on the dental bills thing. I didn''t know this was possible either, so I thought I''d share as a PSA.

They were not on the same insurance, so the bill wasn''t in his name. But the bill did come to his address, and since she left no forwarding address, the bill is now his to pay. He is working with a lawyer, but he won''t get anything back.

This still doesn''t completely add up IMHO. Unless things are different in the US? I know SO''s ex had a few unpaid bills in her name that went to their place after they broke up, and they didn''t go after SO for them. You would not be able to do that here (married folks might be another story), or people would get totally screwed by irresponsible roommates too.

 

[jaylex]

Date: 4/24/2009 9:46:29 PM
Author: diamondseeker2006
In principle, I''d say someone who doesn''t trust their future spouse enough to combine finances (after the wedding), then they probably do not have a good enough foundation for marriage. Ours has been combined since day 1. We do have multiple accounts and all are joint, but we each keep a checkbook for incidental expenses while bills come out of the main account. It''s worked for 30+ years so far. I pretty much keep the books at home because hubby has to do budgets, etc. for the plants he manages.

wow! I totally agree with you. and call me crazy but I feel the same way about pre-nups. If you''re going into marriage with the idea that it may fail and your spouse would screw you over in a divorce, it''s my opinion that the couple should hold off on making marriage plans. I have complete faith in my SO and I know he feels the same about me.
The only reason I could see myself having a separate account would be so that I can plan surprises for him without him finding out first (birthday gifts, vacation?, etc)

 

[sunnyd]

Date: 4/28/2009 9:09:21 PM
Author: absolut_blonde

Date: 4/28/2009 12:12:55 PM
Author: sunnyd
I got another detail on the dental bills thing. I didn''t know this was possible either, so I thought I''d share as a PSA.

They were not on the same insurance, so the bill wasn''t in his name. But the bill did come to his address, and since she left no forwarding address, the bill is now his to pay. He is working with a lawyer, but he won''t get anything back.

This still doesn''t completely add up IMHO. Unless things are different in the US? I know SO''s ex had a few unpaid bills in her name that went to their place after they broke up, and they didn''t go after SO for them. You would not be able to do that here (married folks might be another story), or people would get totally screwed by irresponsible roommates too.

This is what was told to me by FI from the friend. I agree, it sounds ridiculous that that could happen, but so it goes.

 

[jcarlylew]

Date: 4/29/2009 12:31:55 PM
Author: sunnyd

Date: 4/28/2009 9:09:21 PM

Author: absolut_blonde

Date: 4/28/2009 12:12:55 PM

Author: sunnyd

I got another detail on the dental bills thing. I didn''t know this was possible either, so I thought I''d share as a PSA.


They were not on the same insurance, so the bill wasn''t in his name. But the bill did come to his address, and since she left no forwarding address, the bill is now his to pay. He is working with a lawyer, but he won''t get anything back.

This still doesn''t completely add up IMHO. Unless things are different in the US? I know SO''s ex had a few unpaid bills in her name that went to their place after they broke up, and they didn''t go after SO for them. You would not be able to do that here (married folks might be another story), or people would get totally screwed by irresponsible roommates too.

This is what was told to me by FI from the friend. I agree, it sounds ridiculous that that could happen, but so it goes.

i guess it would be moot to agree (since i do), but i am surprised a simple phone call did not clear it up. unless he is listed as the emergency contact. Even then...

 

[janinegirly]

I think it''s a bit naive for people to say having a separate account means you do not trust your FI and therefore the marriage is off to a rocky start. Entering marriage with a some level of independence and a realistic view of expectations and the challenges you will face is your best bet at making it through the long haul. The fact is over 50% end in divorce, but 100% of those people also thought they''d met the perfect person and it''d last forever. I know it''s cynical, but it''s sadly the way life is!

I think it is really smart to have a separate account (along with a joint account for expenses, household expenses, children,etc). Especially if you work! (but even if you don''t). Worse case, you have some protection and breathing room if things go sour and in best case, you can splurge on purchases for yourself (or loved ones) just because! Even the most supportive DH is going to question certain splurges, and well if you are making yoru own money, why complicate things? I''m not suggesting hording secret money. I''m saying a joint account and each party also has a separate account and it''s up to the couple how you work out what is in each (or what %),etc. Finances is #1 reason for divorces, so this is something that should be looked at seriously and ideally without rose tinted glasses, as unromantic as it sounds.