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Should you and your spouse keep your bank accounts separate?

Historically, when couples get married, they tended to merge their lives completely, moving into the same home and merging finances. However, a Bank of America study shows a trend among “millennials” (roughly those born between the early 1980s and mid-1990s) to keep separate bank accounts. According to the study, more than a quarter of millennials keep separate accounts.

This may be because, on average, millennials tend to get married later, when they’re further along in their careers and perhaps value their independence over the idea of commitment. They, in turn, may say they’re doing this because it shows a greater level of trust for one another than merging their money might do.

This raises a lot of questions about whether it’s a good idea for married couples to maintain separate bank accounts. The quick answer is that there’s no easy answer. Nonetheless, here are some things to consider.

First, separate bank accounts don’t necessarily make it easier to split up assets in the event of a divorce. That’s because it doesn’t matter if bank accounts are held separately; any assets acquired during marriage generally become “marital property” and would have to be divided in a divorce settlement. This means if one spouse is squirreling away money in a separate account while the other spouse spends everything in another, it all goes into the same pot.

Separate accounts also make it tougher for the attorney representing you in a divorce. Since your soon-to-be-ex hasn’t necessarily maintained transparency during the marriage, it can be challenging and time-consuming to unwind everything, which can require some forensic work.

Studies also indicate that couples who keep separate bank accounts are more likely to get divorced than those with joint accounts. This doesn’t mean the separate accounts actually cause the divorce, but such an arrangement may indicate an underlying lack of trust and commitment. It can also allow for unpleasant surprises that may undermine a marriage, such as learning your spouse has racked up credit card debt you didn’t know about, leading to money problems and joint debt.

Meanwhile, on a more practical level, a joint bank account simplifies paying bills and other shared tasks. And if one spouse passes away, the other spouse has easy access to the funds without having to see if he or she has been left the money in a will and going through the probate process to receive it as an inheritance.

This isn’t to say there aren’t benefits to separate accounts. For example, a joint bank account can cause marital trouble if spouses don’t talk to each other about account activity. It can also be problematic when one spouse has significant debt at the time they get married. If you merge your finances, you’ll be paying off the debt with jointly owned funds, which can lead to marital problems if communication is lacking.

These are obviously complex issues, and it’s important to discuss them with your soon-to-be spouse before you get married, or at least as early in the marriage as possible. It’s also important to continue to discuss financial issues throughout the marriage, such as how to divvy up expenses and how much each of you should be spending and saving. This sets the foundation for a strong union. It also doesn’t hurt to give a family lawyer a call to discuss in detail what might be the best way to go.

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