Author Topic: Combining Bank Accounts  (Read 444 times)

firemane

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Combining Bank Accounts
« on: July 27, 2020, 11:49:48 AM »
Hello MMM.


I have a question regarding bank accounts now that money markets yields have lost their appeal. I have a high yield account with an online bank and my non-legally-married life partner has money in a MM fund elsewhere which needs to change since the yield lost ~80%. Partner does not do well with managing finances. For this reason, I try to Keep our number of accounts to a minimum. I would like to add him to my online bank's online savings account, and I am wondering if this is a good practice or not or if it will cause any tax complications/ramifications. I would think that I would just get the 1099-int and file it and pay the taxes for the full amount under my name since I am the primary account owner.


Paranoia here: We are speculating on Biden’s first time home buyers credit if it makes it that far. I own a home but partner does not. Could combining bank accounts affect that in any type of foreseeable way?


If there is anything that makes it not worth it, I will just open a separate account, I just thought this might be a nice way to reduce some hassle, and I couldn't find any other discussions on it.

Thanks!

Buffaloski Boris

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Re: Combining Bank Accounts
« Reply #1 on: July 27, 2020, 01:49:45 PM »
Speaking for myself, the time to combine bank accounts is the day after one gets married. One co-owner is responsible for whatever the other co-owner of an account does. Not to be paranoid but relationships have been known to end and end badly. A co-owner of a bank account can empty it out.  And what are we really talking here? A couple percent interest max? 

An alternative way to deal with this sort of stuff is to get all the paperwork ready and say “sign here” and have a 30 second or less explanation ready as to why.

PDXTabs

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Re: Combining Bank Accounts
« Reply #2 on: July 27, 2020, 02:36:19 PM »
Speaking for myself, the time to combine bank accounts is the day after one gets married.

Speaking for myself, the time to combine bank accounts is never. But I'm in the middle of a nasty divorce, and most of our finances weren't even joint.

EDITed to add - I do support a joint account for joint expenses, but everything else should be separate.

Buffaloski Boris

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Re: Combining Bank Accounts
« Reply #3 on: July 27, 2020, 03:26:37 PM »
Speaking for myself, the time to combine bank accounts is the day after one gets married.

Speaking for myself, the time to combine bank accounts is never. But I'm in the middle of a nasty divorce, and most of our finances weren't even joint.

EDITed to add - I do support a joint account for joint expenses, but everything else should be separate.

Yeah. We have both joint and separate accounts. Retirement accounts have to be separate.   

celerystalks

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Re: Combining Bank Accounts
« Reply #4 on: July 27, 2020, 06:06:19 PM »
Just keep things separate. To me it seems there are a lot of red flags.

If you want to show your affection through financial arrangements, then add this person as POD on the account, review and amend beneficiaries declarations for brokerage and retirement accounts, and review and update your will, durable POA, and medical POA given your present circumstances. Today, these things mean more than making someone a joint owner of property such as a bank account. They also have the benefit of being changeable in the future if your circumstances change.

Joint ownership ain’t what it used to be: For example, Some states freeze half of a joint account on one owner’s death until they receive a tax waiver from an estate administrator.

MustacheAndaHalf

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Re: Combining Bank Accounts
« Reply #5 on: July 27, 2020, 09:50:39 PM »
... non-legally-married ... does not do well with managing finances.
... I just thought this might be a nice way to reduce some hassle...
Giving someone permission to drain your bank account does not reduce hassle.  Someone I know had that happen during a nasty divorce - they can take everything from your account if you add them to it.

When you say "does not do well with managing finances", what degree of a problem is it?  There's people who spend everything they earn, or more than they earn.  There's being responsible but not doing any tracking, or caring about interest earned.  The higher the level of irresponsibility, the worse an idea it is to add them to your bank account or credit card.