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rob carrick

Marriage advice from a personal finance columnist: Have a joint bank account with your spouse.

It's the easiest, most sensible way to manage day-to-day spending and saving, and it will save you trouble if your spouse dies before you.

"Our recommendation is to have a joint account and to run things through the joint account," says Jennifer Black, a certified financial planner and co-author of Managing Alone: Your Trusted Advisors' Guide to Surviving the Death of Your Spouse.

Here's what can happen when your spouse dies and you have separate accounts. You try to access money in the spouse's account to pay for household expenses, but find you're frozen out. "The banks are pretty strict," Ms. Black said. "I have seen situations where people cannot get access to the money at all. Usually, the bank is waiting to see a probated will."

Ms. Black says that the process of satisfying the bank's need for proper documentation can take a couple of months. In the meantime, you'll need to find a way to pay the bills. A joint account eliminates this problem because both spouses have equal access.

My wife and I have had a joint account for more than 20 years, along with separate accounts we use for savings. Both our paycheques are deposited into the joint account, and mortgage payments, bill payments and savings are withdrawn from there. It's effortless, which is why it's so surprising to see how many couples maintain separate accounts for their day-to-day finances.

A bank survey from several years back suggested one-third of young couples keep completely separate bank accounts. When I asked about this on my Facebook personal finance page a while back, quite a few people said they mainly relied on separate accounts.

One explanation for separate accounts is that people are getting married later, which means they're set in their money habits and uncomfortable with sharing an account. Sometimes, this leads to compromised banking arrangements that don't address the shortcomings of separate accounts.

"I've seen where couples have a joint account, but two separate accounts as well," Ms. Black said. "The income goes into the separate accounts and then they put it into the joint account to cover the mortgage and pay other bills."

This arrangement may satisfy a couple's need for a degree of financial independence, but it doesn't solve the problem of being unable to access needed funds in a spouse's separate account.

Ms. Black said joint accounts are particularly important for couples where one spouse works and transfers what amounts to an allowance for running the household to his or her partner. "If something happens to the individual who is working, the money is all of a sudden locked in [to their account]. The surviving spouse is going to have difficulty getting access to the money to run the household day to day."

Joint accounts are also kind to spouses who have left financial decisions to a partner who has died. It's much easier to manage day-to-day spending if you can look back via online banking or paper statements to see what a routine month looks like in terms of income received and bills paid.

For newlyweds, joint accounts are a good way to find your financial groove as a couple. Both partners can look at the account online at any time to find out where the money's going. Reckless spending by one partner can be addressed quickly, before it causes a bounced cheque or missed payment.

Having a joint account is particularly helpful in a housing market where making your mortgage payments is quite likely going to require the income of both spouses. With your paycheques pooled, you're in a good position to always have the necessary money in your account when you need it.

It's my experience that joint accounts work best when paired with separate accounts that each spouse can use for personal savings. On each spouse's payday, arrange an automatic transfer of an agreed-upon amount to each separate account. Among the things you'll use this money for is presents for your spouse.

The average age of Ms. Black's clients is 57, and she estimates that about 30 per cent of them use separate bank accounts. One of the first recommendations she makes to them is to switch to a joint account. "Some do it," she said "And some find it difficult to get their head around it."

Follow me on Twitter: @rcarrick

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