# How do you calculate net worth when you're married?



## Alexandra (Apr 3, 2009)

I am just wondering if people include their partner's assets when they are calculating their net worth? My husband and I have separate RRSPs and savings accounts, but a shared home (with a mortgage), a shared rental property (also with a mortgage), and an RESP account for our daughter, in addition to lots of other shared assets. 

To calculate my net worth, I have always just split the shared assets in half (and any liabilities). Is this what other people are doing? Or do you count your net worth as yours AND your partners net worth?


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## CanadianCapitalist (Mar 31, 2009)

Alexandra said:


> To calculate my net worth, I have always just split the shared assets in half (and any liabilities). Is this what other people are doing? Or do you count your net worth as yours AND your partners net worth?


I keep track of the household net worth. Both of us didn't have much when we married, so if I ever want to know my net worth, I'll just split the household networth into 2.


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## mfd (Apr 3, 2009)

I calculate it as a household net worth. I don't see a reason to split it.


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## MoneyGal (Apr 24, 2009)

Same here - I do it for the family/household. 

If my hub ever had, say, a big inheritance (or I did), I would keep those assets separate. Or if he sold a business, etc. 

But our existing assets - our savings and our house - we hold jointly, so I track 'em jointly.


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## Sampson (Apr 3, 2009)

My wife and I are always calculated together.

I suppose it depends on how you split/share finances. We use a single joint account - despite disparity in incomes, we're even.

Lots of our friends have very separated finances and individual accounts. If that's the case, it may make sense to calculate those amounts for each partner separately.


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## steve41 (Apr 18, 2009)

If you are merely tracking net worth, then you will be OK lumping assets together, especially with the recent introduction of income splitting.

However, if you are intent on meaningful financial planning, you really should separate the assets. Income tax is an important part of the planning process, and until Canada adopts joint spousal tax returns, separating the two plans is wisest. 

(BTW, I would love to see joint returns... it would greatly simplify tax prep and future financial planning)


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## Mintycake (Apr 13, 2009)

We are like you - I calculate my own net worth seperately from my husband. Our only joint asset is the house, which I split down the middle.


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## Ben (Apr 3, 2009)

Sampson said:


> My wife and I are always calculated together.
> I suppose it depends on how you split/share finances. We use a single joint account - despite disparity in incomes, we're even.


Same here. Also, like CC, we both had little when we were married, so the accumulation (as modest as it has been so far...) has been joint.


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## FrugalTrader (Oct 13, 2008)

Alexandra said:


> I am just wondering if people include their partner's assets when they are calculating their net worth? My husband and I have separate RRSPs and savings accounts, but a shared home (with a mortgage), a shared rental property (also with a mortgage), and an RESP account for our daughter, in addition to lots of other shared assets.
> 
> To calculate my net worth, I have always just split the shared assets in half (and any liabilities). Is this what other people are doing? Or do you count your net worth as yours AND your partners net worth?


We calculate our net worth as a team. Even if you were to have separate RRSP's etc, if it were to come to divorce, the line in the sand probably won't be where you think.


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## Retired at 31 (Apr 20, 2009)

Joint. It's simpler, cleaner and easier. If you aren't pulling in the same direction, the odds of a happy marriage are slim.

It makes me think of a line from Chou's recent annual report - something along the lines of "This market worse than getting divorced - you lose half your assets and you're still married!"


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## Mockingbird (Apr 29, 2009)

FrugalTrader said:


> if it were to come to divorce, the line in the sand probably won't be where you think.


So true..
Having a monetary prenup is different story though...



Retired at 31 said:


> Joint. It's simpler, cleaner and easier. If you aren't pulling in the same direction, the odds of a happy marriage are slim.


Agree..
We also keep it as family.


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## Alexandra (Apr 3, 2009)

Thanks. It's nice because jointly, it sounds like we have so much more.

I have a feeling from what others tell me, that if divorce ever came into play, you'd actually end up with less than half - the lawyers need to take their cut too ;-).


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## Cal (Jun 17, 2009)

Yep, the two of you work together as a team. So you might as well count your Net Worth together too.


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## apples (Apr 10, 2009)

question for a married couple "do you file income taxes together?" - yes 

enough said.


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## specialk (Jul 14, 2009)

We share future goals, a bed, a child, and for that matter, a life....I see no problem sharing a bank account and assets.


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## steve41 (Apr 18, 2009)

It is a two step process. First of all,assume both live to some ridiculous ripe old age. Create a plan under that assumption. Next, to describe it accurately, you should determine a 'hubby dies early' age. Examine the hubby's plan at that age, take the balance in both his RRSP and nonreg portfolio and roll it into the wife's plan. Finally, continue on with the wife until her 'best estimated' year of death.

You have to consider income tax in the above calculation, and when you examine the combined 'net worth' (net worth defined as that after tax income which would derive should the couple or survivor die at any point along the way)... you will find it tracks a smooth uninterrupted value.

Hint.... don't use a spreadsheet for this kind of analysis. Tax makes the calculation very awkward.

As yet, there are no joint tax returns in Canada.


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## Oldroe (Sep 18, 2009)

It's easy we have ours and hers.


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