Should Couples Merge Finances?
Levine advises on merging finances: subjective choice, prioritize honesty, consider tax implications, wealth differences.
Key Takeaways
- You don't have to merge all accounts to have a healthy financial relationship—maintain separate accounts if it makes sense logistically, but be completely transparent about what you own, owe, and earn
- Consider tax implications before combining appreciated assets: holding appreciated assets in the name of the spouse expected to die first can provide a full step-up in basis for heirs, versus only a 50% step-up for jointly held assets in most states
- Individual retirement accounts (IRAs) cannot be converted to joint accounts—they remain legally individual, so focus transparency on overall retirement strategy rather than account structure
- Be upfront about significant wealth and income differences early in marriage; prenups and separate accounts may be appropriate for those already established or with major disparities
- Financial honesty with your spouse about income, debt, and assets is critical because your financial decisions will impact them regardless of whether accounts are separate or joint
Should Couples Merge Finances? In this episode of "Ask The Hammer," Jeffrey Levine from Buckingham addresses a question about the impact of merging finances on marital satisfaction. He emphasizes that this is more of an opinion-based issue, as there is no definitive right or wrong answer. Levine highlights the importance of financial honesty in a relationship, stating that it doesn't necessarily mean all finances must be merged into joint accounts. He notes that there are various reasons, including tax implications and differences in wealth or income, why couples might choose to keep some accounts separate, especially if they marry later in life. To see more episodes of Ask The Hammer, please click on this link: https://www.finstream.tv/videos/ask-the-hammer/
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