Bringing individual assets into joint account

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9-5 Suited
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Bringing individual assets into joint account

Post by 9-5 Suited » Tue May 15, 2018 12:08 pm

Seeking wisdom from folks who may have been down this path before.

I have $130K in a taxable account that was (and still is) held as separate property. All other assets/debts are joint. My wife and I (both 32) have a joint net worth of $590K not counting this individual money I brought into the marriage. My annual income is $150K-175K and hers is $120K. So even if something like a divorce were to occur, losing half of my old money wouldn't have a big impact on my life.

My preference is to bring everything together. Emotionally and spiritually I really like the concept of our entire lives being combined: goals, assets, successes, problem, everything. But it's not a slam dunk of a situation given the obvious hard risks vs. these 'soft' benefits.

Has anyone merged and regretted it? Has anyone merged and found it positively impacted their marriage/financial success? Anyone opted to keep separate and either regretted it or happy that you did?

Thanks!!

RickBoglehead
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Re: Bringing individual assets into joint account

Post by RickBoglehead » Tue May 15, 2018 12:13 pm

I would argue that if holding funds in an individual account, or moving them to a joint account, impacts your marriage, you have other issues. By that I mean moving $130,000 shouldn't result in a happier marriage, just like not moving it shouldn't make your marriage have issues, especially given the size of your joint asset base.

That said, we're coming up on 40 years soon and don't have a single individual asset except for retirement accounts which by default are, but most of my wife's retirement contributions have been from my paycheck anyway.

Some years back a relative of mine gifted us some funds, and made out two checks, one to each of us, for 1/2 of the total. Sending a message that it wasn't a gift to me, which we got a good laugh at and put both checks in our joint account. We've always been amazed when people have his/her checking accounts, credit cards, and separate bills, we'd never consider that.

Moving it should have zero impact on financial success if you manage all your assets as one big pot with a plan.
Last edited by RickBoglehead on Tue May 15, 2018 12:17 pm, edited 1 time in total.

Doohop65
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Re: Bringing individual assets into joint account

Post by Doohop65 » Tue May 15, 2018 12:14 pm

You will get folks on both sides of this debate. My family is in a very similar position as yours and we had a similar discussion when we merged our finances.

The choice we made was we wanted all things merged as one. My spouse has been the higher earn and the lower earner. At this point the resources that were brought are blended together and it is very powerful to know we row in the same direction at all times. Additional resources as managed as one portfolio.

I don’t believe you will regret it but others may disagree.

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JPH
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Re: Bringing individual assets into joint account

Post by JPH » Tue May 15, 2018 12:25 pm

It would be like a gift to your wife. She could use it as she pleases. If you have no hesitancy about such a gift, then do it.
While the moments do summersaults into eternity | Cling to their coattails and beg them to stay - Townes Van Zandt

RickBoglehead
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Re: Bringing individual assets into joint account

Post by RickBoglehead » Tue May 15, 2018 12:46 pm

If she uses it as she pleases, or views it as a gift, then as I said they have much bigger issues.

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DanMahowny
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Re: Bringing individual assets into joint account

Post by DanMahowny » Tue May 15, 2018 12:49 pm

I have some assets in my name only, and so does my wife.

Doesn't matter to us whose name is on the account. It's OUR money. We are a team.
Funding secured

gluskap
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Re: Bringing individual assets into joint account

Post by gluskap » Tue May 15, 2018 1:49 pm

I just recently did this with my individual brokerage account and combined it into our joint brokerage account. I just liked the simplicity of less accounts. But we each still have our own separate smaller checking accounts. The majority of our money is in a joint account and all joint expenses go out of the joint account. But we still like the freedom of the smaller individual accounts in case we want to make selfish purchases without being questioned or want to give each other gifts. This has worked for us. No regrets so far.

delamer
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Re: Bringing individual assets into joint account

Post by delamer » Tue May 15, 2018 1:54 pm

I have a large taxable account in my name only. It is money that I received as an inheritance.

If I predecease my husband, It is important to me that this inheritance be handled in a different manner than the assets that we have accumulated jointly.

I was able to do that in my will, because I have kept the account in my name only.

In the meantime, we both benefit from (and pay taxes on) the earnings thrown off by the account.

Just some food for thought.

icefr
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Re: Bringing individual assets into joint account

Post by icefr » Tue May 15, 2018 2:12 pm

One thing I would caution is how the cost basis gets transferred if you move the account from individually titled to jointly titled. I did some similar research this year because my husband transferred some separate shares to my separate taxable account. The cost basis was a huge pain to transfer over and we concluded that even if we void our postnup at some point, we will leave the separate taxable account as is because we don’t want to deal with making sure the cost basis for all of our shares transfers correctly.

My other suggestion would be to use this money as a house down payment or for paying down the mortgage at some point as a way of bringing it joint, if you want, versus transferring it into a joint brokerage account.

dbr
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Re: Bringing individual assets into joint account

Post by dbr » Tue May 15, 2018 4:13 pm

Keep in mind retirement accounts cannot ever be joint, so not very many couples ever completely merge assets. Also income in retirement from pensions and Social Security is clearly designated to a primary account holder and beneficiary, spousal, etc., holder. The person who mentioned intentions regarding who inherits that money makes another point to attend to. That said merging the assets is common. In same cases someone ends up winning and someone ends up losing, hopefully not in your case.

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Doom&Gloom
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Re: Bringing individual assets into joint account

Post by Doom&Gloom » Tue May 15, 2018 4:29 pm

I didn't. No regrets.

If I had, I might have paid a price. Maybe not, but there would have been more of a risk. I'm glad I didn't have to find out.

As with most things in life, it depends.

DetroitRick
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Re: Bringing individual assets into joint account

Post by DetroitRick » Tue May 15, 2018 4:37 pm

Opted to keep one account separate - a taxable brokerage account that pre-dates our marriage. Wife is fully aware, and concurs. Basically, she's 5 years younger, we do not live in a community property state, is sole primary beneficiary, and it will be advantageous for her to get a full step-up basis if I go first. Of course, our IRA's are separate by definition, as others have pointed out. All other asset accounts are joint. Credit cards are all separate.

It's not the titling itself that we found important, it's the communication. Because we talk and because we both access our Quicken platform often, everybody knows everything at all times. This all has worked fine for 18 years.

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celia
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Re: Bringing individual assets into joint account

Post by celia » Tue May 15, 2018 4:46 pm

We went in the opposite direction. For most of our marriage, everything was joint. We are retired now and older relatives have been dying. About 10 years ago, I inherited a large sum, spent part of it on a new kitchen, and saved the rest in a separate account. Recently, DH inherited a large sum too and will spend part of it on the house and a new car, and save the rest in a separate account.

Since we recently re-did our estate plan, we have different wishes for what should happen to our separate accounts. (Maybe, the separateness is more important to some when they are older and have more assets, since we didn't feel this way when we were younger. We just wanted the survivors in the immediate family to be cared for, back then.) Part of our goal is to get the separate assets from the person who dies first to our kids, so they don't have to wait for both of us to die. We both feel that we could each spend our separate money how we want without consulting with the other (except for tax consequences for RMDs or capital gains) although we still seek input from each other.

OP, I noticed that the $130K is a little under one year of pay for you. So if the money had to be split, that would be like losing half a year's pay. Over a lifetime, that is not much, since it is easy to be out of work for that long (or longer). Been there!
Last edited by celia on Tue May 15, 2018 5:01 pm, edited 2 times in total.

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9-5 Suited
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Re: Bringing individual assets into joint account

Post by 9-5 Suited » Tue May 15, 2018 4:48 pm

dbr wrote:
Tue May 15, 2018 4:13 pm
Keep in mind retirement accounts cannot ever be joint, so not very many couples ever completely merge assets. Also income in retirement from pensions and Social Security is clearly designated to a primary account holder and beneficiary, spousal, etc., holder. The person who mentioned intentions regarding who inherits that money makes another point to attend to. That said merging the assets is common. In same cases someone ends up winning and someone ends up losing, hopefully not in your case.
The easy thing for us is that since we plan all of our investments together, our retirement accounts have the same asset values (within 1%), same allocation, and same annual contributions. So while true they aren't joint, there's little mathematical difference in our case.

And agreed that hopefully it never ends up mattering, whichever path is chosen :sharebeer

soccerrules
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Re: Bringing individual assets into joint account

Post by soccerrules » Tue May 15, 2018 4:52 pm

we have always shared everything as "ours", joint checking and taxable account.

we did get married at 24 and 22 straight out of college.
Don't let your outflow exceed your income or your upkeep will be your downfall.

Gnirk
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Re: Bringing individual assets into joint account

Post by Gnirk » Tue May 15, 2018 5:00 pm

delamer wrote:
Tue May 15, 2018 1:54 pm
I have a large taxable account in my name only. It is money that I received as an inheritance.

If I predecease my husband, It is important to me that this inheritance be handled in a different manner than the assets that we have accumulated jointly.

I was able to do that in my will, because I have kept the account in my name only.

In the meantime, we both benefit from (and pay taxes on) the earnings thrown off by the account.

Just some food for thought.
Same here. Although all of our investment accounts are kept separate (second marriage, each have adult children). Checking accounts and home ownership are joint.

FoolMeOnce
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Re: Bringing individual assets into joint account

Post by FoolMeOnce » Tue May 15, 2018 5:05 pm

celia wrote:
Tue May 15, 2018 4:46 pm
Part of our goal is to get the separate assets from the person who dies first to our kids, so they don't have to wait for both of us to die.
Just curious: how does help; why would they have to wait?

FoolMeOnce
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Re: Bringing individual assets into joint account

Post by FoolMeOnce » Tue May 15, 2018 5:09 pm

I moved a multiple of what you are considering into a joint account, haven't given it a second thought.

As for the comments about keeping inheritances and legacies on one or the other side of the family, that can still be accomplished (though less precisely). You don't need to divide things evenly in the will. Though, granted, you need to trust your surviving spouse not to change that aspect of his/her will after you pass.
Last edited by FoolMeOnce on Tue May 15, 2018 6:45 pm, edited 1 time in total.

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celia
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Re: Bringing individual assets into joint account

Post by celia » Tue May 15, 2018 5:12 pm

FoolMeOnce wrote:
Tue May 15, 2018 5:05 pm
celia wrote:
Tue May 15, 2018 4:46 pm
Part of our goal is to get the separate assets from the person who dies first to our kids, so they don't have to wait for both of us to die.
Just curious: how does help; why would they have to wait?
They don't. They also get sizable gifts now, but not so much that they get "lazy".

FoolMeOnce
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Re: Bringing individual assets into joint account

Post by FoolMeOnce » Tue May 15, 2018 5:33 pm

celia wrote:
Tue May 15, 2018 5:12 pm
FoolMeOnce wrote:
Tue May 15, 2018 5:05 pm
celia wrote:
Tue May 15, 2018 4:46 pm
Part of our goal is to get the separate assets from the person who dies first to our kids, so they don't have to wait for both of us to die.
Just curious: how does help; why would they have to wait?
They don't. They also get sizable gifts now, but not so much that they get "lazy".
I meant how does keeping separate accounts help achieve that goal?

delamer
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Re: Bringing individual assets into joint account

Post by delamer » Tue May 15, 2018 5:51 pm

FoolMeOnce wrote:
Tue May 15, 2018 5:09 pm
I moved a multiple of what you are considering into a joint account, haven't given it a second thought.

As for the comments about keeping inheritances and legacies on one or the other side of the family, that can still be accomplished (though less precisely). You don't need to decide things evenly in the will. Though, granted, you need to trust your surviving spouse not to change that aspect of his/her will after you pass.
And take into account that small possibility that you die at the same time.

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celia
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Re: Bringing individual assets into joint account

Post by celia » Tue May 15, 2018 5:55 pm

FoolMeOnce wrote:
Tue May 15, 2018 5:33 pm
I meant how does keeping separate accounts help achieve that goal?
There are also other goals for the separate accounts. For example, my money will first be used for Special Needs Trusts if my disabled relatives need more money than in their existing trusts. But, it is likely that I would outlive them and I can designate my separate money to go where I want (without impacting joint assets) instead of going to the beneficiaries of the Special Needs Trusts (had I just given the money to their trusts).

I have a separate trust and a different trustee for my separate assets. There is a very clear line between his, hers, and ours.

FoolMeOnce
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Re: Bringing individual assets into joint account

Post by FoolMeOnce » Tue May 15, 2018 6:22 pm

delamer wrote:
Tue May 15, 2018 5:51 pm
FoolMeOnce wrote:
Tue May 15, 2018 5:09 pm
I moved a multiple of what you are considering into a joint account, haven't given it a second thought.

As for the comments about keeping inheritances and legacies on one or the other side of the family, that can still be accomplished (though less precisely). You don't need to decide things evenly in the will. Though, granted, you need to trust your surviving spouse not to change that aspect of his/her will after you pass.
And take into account that small possibility that you die at the same time.
That would be covered by my first part about dividing things unevenly among relatives in the will. A will should cover simultaneous death.

delamer
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Re: Bringing individual assets into joint account

Post by delamer » Tue May 15, 2018 6:32 pm

FoolMeOnce wrote:
Tue May 15, 2018 6:22 pm
delamer wrote:
Tue May 15, 2018 5:51 pm
FoolMeOnce wrote:
Tue May 15, 2018 5:09 pm
I moved a multiple of what you are considering into a joint account, haven't given it a second thought.

As for the comments about keeping inheritances and legacies on one or the other side of the family, that can still be accomplished (though less precisely). You don't need to decide things evenly in the will. Though, granted, you need to trust your surviving spouse not to change that aspect of his/her will after you pass.
And take into account that small possibility that you die at the same time.
That would be covered by my first part about dividing things unevenly among relatives in the will. A will should cover simultaneous death.
I misunderstood you regarding the will.

I don’t really see the downside of keeping money in a separate account if you have a specific intent for it upon your death (that is, not going to the potential joint account holder).

Why own it jointly in that case?

FoolMeOnce
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Re: Bringing individual assets into joint account

Post by FoolMeOnce » Tue May 15, 2018 6:32 pm

celia wrote:
Tue May 15, 2018 5:55 pm
FoolMeOnce wrote:
Tue May 15, 2018 5:33 pm
I meant how does keeping separate accounts help achieve that goal?
There are also other goals for the separate accounts.
Of course. I was asking about this goal, though. I'm just trying to learn something I might not know.

FoolMeOnce
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Re: Bringing individual assets into joint account

Post by FoolMeOnce » Tue May 15, 2018 6:34 pm

delamer wrote:
Tue May 15, 2018 6:32 pm
FoolMeOnce wrote:
Tue May 15, 2018 6:22 pm
delamer wrote:
Tue May 15, 2018 5:51 pm
FoolMeOnce wrote:
Tue May 15, 2018 5:09 pm
I moved a multiple of what you are considering into a joint account, haven't given it a second thought.

As for the comments about keeping inheritances and legacies on one or the other side of the family, that can still be accomplished (though less precisely). You don't need to decide things evenly in the will. Though, granted, you need to trust your surviving spouse not to change that aspect of his/her will after you pass.
And take into account that small possibility that you die at the same time.
That would be covered by my first part about dividing things unevenly among relatives in the will. A will should cover simultaneous death.
I misunderstood you regarding the will.

I don’t really see the downside of keeping money in a separate account if you have a specific intent for it upon your death (that is, not going to the potential joint account holder).

Why own it jointly in that case?
Yeah, upon further thought, a will might not do the trick if the other account holder takes possession immediately upon death and the assets are not considered part of an individual decedent's estate. You would need to trust your partner to carry out your wishes upon your death.

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Sandtrap
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Re: Bringing individual assets into joint account

Post by Sandtrap » Tue May 15, 2018 6:41 pm

From either point of view.

Mine and all mine (at least I think so)
Mine and sort of yours
Yours and all yours . . . (not worth arguing over)
Yours and sort of yours
Ours but actually really. . . yours (and we both know it)
Ours and sort of yours
Ours and sort of mine . . and maybe not really mine . . . but I'm thinking about it

freebeer
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Re: Bringing individual assets into joint account

Post by freebeer » Wed May 16, 2018 10:07 am

9-5 Suited wrote:
Tue May 15, 2018 12:08 pm
Seeking wisdom from folks who may have been down this path before.

I have $130K in a taxable account that was (and still is) held as separate property. All other assets/debts are joint...

My preference is to bring everything together...
Just a note on mechanics: depending on your state moving assets into a joint account doesn't automatically transmute it into community property. WA State has had a series of precedents that have resulted in effectively eliminating commingling as long as sufficient statements are available to enable tracing. The name(s) on the accounts don't really matter. So to fully transmute the $130k to community property in WA you would want to execute a written document that so indicated, not just move the money. If you wanted to agree that all property would be community you could also mutually agree on that. Otherwise for example if you wife in the future received an inheritance, even if she put it directly into the joint account, it would likely stillbe characterized as her separate property, including pro rata appreciation.

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