While it is generally easier for married couples to co-mingle finances — and most do — there are times when keeping accounts separate may be a better way of maintaining marital harmony.
“Traditionally there have been, and still are, good reasons to co-mingle finances,” said Edward Kohlhepp Jr., vice president of Kohlhepp Investment Advisors in Doylestown, Bucks County. “Generally, it’s easier to run the household this way. But as society’s idea of marriage evolves, so do marital finances.”
Clashes over money in marriage are widely considered the No. 1 source of arguments and divorce by divorce attorneys and martial counselors, which is why some financial advisers support the idea of separate bank accounts.
Keeping separate accounts is especially common in cases where there are second families and when spouses have children from prior relationships. But it also comes into play when couples marry later in life, have their own ideas about money and do not see eye-to-eye on financial matters.
“Someone with children from a prior relationship may want to keep at least a part of their money separate to satisfy pre-existing obligations,” Mr. Kohlhepp said. “Others may not be financially compatible. If one is a rampant spender and the other likes to save, joint finances can be an ongoing conflict and separate accounts can work, providing the household expenses are met.”
Mark Snyder, owner of Mark J. Snyder Financial Services, Inc., in Medford, N.Y., said from his experience, the topic of whether or not to commingle finances can be touchy.
“Some may wish to maintain a form of independence and therefore want some financial autonomy,” Mr. Synder said. “If each spouse agrees, then it won’t be a problem. But it can become one when things change, especially when children come along and financial demands tend to increase and one spouse, usually the wife, will probably see a drop in income.”
According to the Chicago-based American Academy of Matrimonial Lawyers, financial issues are at the top of the list of concerns most couples have even before exchanging vows.
In a survey of divorce lawyers, the organization reported 63 percent cited an increase in prenuptial agreements during the past three years. The top three items most commonly covered in prenups were noted as “protection of separate property — 80 percent; alimony/spousal maintenance — 77 percent; and division of property — 72 percent.”
“Clearly most couples commingle funds,” said Steven Hurvitz, president of the Pennsylvania Chapter of the American Academy of Matrimonial Lawyers and a partner at the McQuaide Blasko law firm in State College.
There can be reasons to keep some things separate, he said. “In Pennsylvania, if you come into a marriage with separate assets, they are non-marital assets and they remain non-marital unless you put them into joint names.
“The only thing subject to division is the increase in value during the course of the marriage prior to separation.”
Much of the anxiety associated with commingling finances stems from the fact that more couples are marrying later in life and have accumulated significant assets, said William Wolfe, an adviser at Fragasso Financial Advisors, Downtown.
“The thought of a failed relationship is painful, and then becomes downright frightening once you consider the possible financial burden,” Mr. Wolfe said.
Some financial experts feel that couples who choose not to commingle their assets could be setting their marriages up for failure.
“Most enter a marriage believing they’re now one entity and joint finances are a part of that,” said Peter Gore, president of Gore Capital Management in Williamsburg, Va. “Separate finances run counter to the spirit of marriage.
“If one member of a couple insists on separate finances, the other may take this to mean they are not considered trustworthy or responsible.”
Tim Grant: tgrant@post-gazette.com or 412-263-1591.
First Published: April 17, 2015, 4:00 a.m.
