It is legal for same-sex couples to open and maintain
joint checking accounts in every state in the country, even where gay
marriages or even civil unions are not recognized. College roommates, a parent
and a child or two Army buddies could all open joint checking accounts –
without anyone asking if they’re gay or straight.
But is banking as a couple always a good idea? Consider the
benefits and drawbacks before you decide.
Pros
- When two people share a bank account, they pool resources, with each then having access to more money than they would have as individuals.
- Simplification: The entire aggregate of the couple’s cumulative expenses is laid out in one single place on one single balance sheet.
- Transparency: Each can clearly see the expenditures of the other. This can be especially beneficial if one person is more financially responsible. The open nature of a joint account can make the more prudent party less likely to play cop, and can subtly goad the spendthrift into fiscal responsibility.
- It can make couples feel more like a couple – especially in states where same-sex marriage is not recognized. Perhaps more importantly, a joint checking account can serve as a “step” on the way to marriage (or basic cohabitation) to test the waters regarding financial competence, trust and compatibility.
Cons
- Loss of privacy: Everything one party spends – and, if you use a shared debit card, everywhere they spend it – is visible to the other.
- Neither party any longer has his/her “own money”, which can be difficult for independent people to accept.
- If one party earns more than the other, resentment can be a factor for both parties.
- Neither partner can be certain of current bank balance as both partners write checks from the same account.
- The biggest risk by far, however, comes down to trust, financial competence and potential for abuse. If one party sees a text message they don’t like on the other’s cell phone, they can take every dollar out of the joint account on their way out of the relationship, and the other party has essentially no legal recourse. If one allows tax arrears to fester, the government can seize funds in the account, regardless of whether the partner timely paid his or her taxes. A poorly maintained or frequently overdrawn checking account can degrade borrowing power or limit options for people whose credit is in poor shape, whether they were the ones who were irresponsible or not.
Sharing expenses is an intimate and
personal choice for all couples – but it doesn’t have to be absolute.
Consider maintaining separate checking accounts, but also open a combined
checking account exclusively for shared bills (or emergencies) as a way to ease
into this important and consequential decision.
For more
information, contact us at http://www.lgbt.tax/contactus
