# Recently married (benefit of joint account?)



## Money4life (May 17, 2012)

I've recently got married and been trying to decide if there's any benefits of opening up a joint account with my wife. Up to this point, we've had separate accounts for everything. We are both good at managing money and don't have trust issues with each other or any debt. We're trying to decide what to do with the money we've received for the wedding. We've already maxed out our RRSP and TFSA contributions and don't really want to put this money into anything long term. This is money that we'll one day use to spoil ourselves with. Technically, we haven't went on our honeymoon yet and were thinking of using this money for something fun; whether that will happen in 6 months or in 2 years, we are not sure. 

Interest rates seem pretty down right now and nothing is really jumping out at us. If we don't end up going with a joint account, then we were thinking of just placing the money into our separate savings account (both 1.9% interest). It will build a little interest there and we'll remember to not use that 'x' amount of money until we want to. 

Thoughts?


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## Karen (Jul 24, 2010)

I have been widowed twice, and both times I was extremely grateful that our bank accounts were in joint names so that I had easy access to cash without having to go through the whole process of settling an estate. In fact, everything we had was in joint names with right of survivorship, so it all just came directly to me without going through the estate. Since you say you are both good at managing money and there are no trust issues between you, I would strongly advise you to merge your accounts and to ensure that you name each other beneficiaries of your RRSP and TFSA accounts.


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## MrMatt (Dec 21, 2011)

Most of our accounts are joint, unless they legally can't be.

It makes it easier to handle stuff, all bills come out of one account, and we both know the precise status of our finances.
If we tried to split it it would be annoying, for no real benefit.

The only potential advantage I see is if you expect to separate, or if one of you is in significant debt and considering bankruptcy.


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## kcowan (Jul 1, 2010)

One thing to consider is guarantees. A joint account adds another $100k to the total guaranteed amount. Not a big problem yet but eventually it will be.


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## fraser (May 15, 2010)

The issue of guarantee is a good one, especially in light of recent events. We do exactly that, his, hers, and joint.

There is another issue that could apply as you accumulate wealth and if one of you ultimately withdraws from the workforce.

If you have investment income that you want to split or move over to a lower income spouse then you need to be aware of the income attribution rules. Income is attributed to the person who earned the money. CRA permits you to set up documented spousal loans. This can be an excellent way to reduce your joint tax burden-especially now since the CRA rate is only one percent.


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## Money4life (May 17, 2012)

Karen said:


> I have been widowed twice, and both times I was extremely grateful that our bank accounts were in joint names so that I had easy access to cash without having to go through the whole process of settling an estate. In fact, everything we had was in joint names with right of survivorship, so it all just came directly to me without going through the estate. Since you say you are both good at managing money and there are no trust issues between you, I would strongly advise you to merge your accounts and to ensure that you name each other beneficiaries of your RRSP and TFSA accounts.


Thanks for the response. We are only 27 and 25 years old. Do you think we should already be worrying about survivorship? Good call on having each of us down as beneficiaries for our TFSAs and RRSPs. I'm sure pretty sure we have that done already.



MrMatt said:


> Most of our accounts are joint, unless they legally can't be.
> 
> It makes it easier to handle stuff, all bills come out of one account, and we both know the precise status of our finances.
> If we tried to split it it would be annoying, for no real benefit.
> ...


Thanks for the response. We already have a system set up for bill payments, are good at tracking our spendings and already know our exact finances. I don't think there would be a real need for us to have a joint chequing account, for example. As for a joint savings account, that is another discussion. Clearly from a compounding standpoint, this would make the most sense...but what about tax implications? I assume there is a joint tax rate?



kcowan said:


> One thing to consider is guarantees. A joint account adds another $100k to the total guaranteed amount. Not a big problem yet but eventually it will be.


Thanks for the response. I'm sorry but I know very little about guarantees so this post confused me. A google search didn't help much either. This looks to be something to do with loans or debt. Right now, we don't have those concerns. In the long term, we might have to worry about that if we owned a home together or something to that degree.



fraser said:


> The issue of guarantee is a good one, especially in light of recent events. We do exactly that, his, hers, and joint.
> 
> There is another issue that could apply as you accumulate wealth and if one of you ultimately withdraws from the workforce.
> 
> If you have investment income that you want to split or move over to a lower income spouse then you need to be aware of the income attribution rules. Income is attributed to the person who earned the money. CRA permits you to set up documented spousal loans. This can be an excellent way to reduce your joint tax burden-especially now since the CRA rate is only one percent.


Thanks for the response. Both of us are currently working and are able to contribute to our own RRSPs so I don't think we would need to be doing any income splitting or stuff like that. Even though my wife makes a lower salary than me, she has been getting good returns on her income taxes.


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## Nemo2 (Mar 1, 2012)

Money4life said:


> We are only 27 and 25 years old. Do you think we should already be worrying about survivorship?


A few years ago I went out for a walk and was knocked down and run over by a City of Ottawa truck........I survived, but I might not have......survivorship is not just for (us) old folks.


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## Karen (Jul 24, 2010)

> Thanks for the response. We are only 27 and 25 years old. Do you think we should already be worrying about survivorship? Good call on having each of us down as beneficiaries for our TFSAs and RRSPs. I'm sure pretty sure we have that done already.


Of course you're not likely to have to worry about survivorship at your ages, and you're certainly not likely to have to worry about that for many years. However, bad things happen - car accidents, serious illness, for example. I have had two people close to me die of cancer in their 30s. I personally underwent some very serious open-heart surgery in my late 20s, which, obviously, I survived, but I might not have. If something like that happened to you, would your wife have enough available money in her own account to get her through the next few months? Would she want to go through the stress and expense of having your will probated if it could easily have been avoided. (Do you even have wills?)

I'm not saying that this is the only consideration that matters; others have made valid points about why they prefer to have separate accounts. I'm just pointing out that you shouldn't ignore the possibility of not living a long life.

Edited to say: I see I cross-posted with Nemo2 - his was another good example of what I am saying.


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## Guban (Jul 5, 2011)

Money4life said:


> Thanks for the response. I'm sorry but I know very little about guarantees so this post confused me. A google search didn't help much either. This looks to be something to do with loans or debt. Right now, we don't have those concerns. In the long term, we might have to worry about that if we owned a home together or something to that degree.


I think that what is being referred to is the CDIC deposit insurance.
See http://www.cdic.ca/home/Pages/default.aspx


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## Retired Peasant (Apr 22, 2013)

Money4life said:


> We're trying to decide what to do with the money we've received for the wedding.


Others have answered the joint/separate account point well, but I just wanted to comment on this part. If it was received 'for the wedding', then shouldn't it be spent on that - paying for the wedding? Or did you mean the money that guests gave as a wedding gift? If so, then I think people expect you to actually buy something for yourselves that you need (because they didn't know what you needed).


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## Money4life (May 17, 2012)

Nemo2 said:


> A few years ago I went out for a walk and was knocked down and run over by a City of Ottawa truck........I survived, but I might not have......survivorship is not just for (us) old folks.


Good call. You can never be sure.



Karen said:


> If something like that happened to you, would your wife have enough available money in her own account to get her through the next few months? Would she want to go through the stress and expense of having your will probated if it could easily have been avoided. (Do you even have wills?)


My wife would be OK for the first few months...however she would be reaching into her investments in the following months. But I see what you're saying; she definitely wouldn't want to go through additional stress if this could all be prevented. And no, we do not have wills. We need to find a good lawyer to get those set up.



Guban said:


> I think that what is being referred to is the CDIC deposit insurance.
> See http://www.cdic.ca/home/Pages/default.aspx


OK...that makes more sense now. Thanks.



Retired Peasant said:


> Others have answered the joint/separate account point well, but I just wanted to comment on this part. If it was received 'for the wedding', then shouldn't it be spent on that - paying for the wedding? Or did you mean the money that guests gave as a wedding gift? If so, then I think people expect you to actually buy something for yourselves that you need (because they didn't know what you needed).


My apologies for the lack of clarity. That would be money we received from the guests. Yes, that definitely should be spent on ourselves...but since we do not know what we're doing yet, the question was where to put the money in the short term.


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