Not married, but in a serious relationship? At what point does it make sense to merge finances with a significant other? If you're worried that love might be clouding your judgment, read this professional advice from Brad Kanter, C.P.A., E.A. of Kanter & Associates, P. A., C.P.A..
HeadDrama:
What's the best way to merge finances with a partner?
Brad Kanter of Kanter & Associates:
The best way to merge its finances with a partner depends upon a number of factors. It is always best to develop a good understanding of each person’s perspective on finances before merging money. Beyond that important rule, cash on hand can be easily transferred into one common bank account. If each person has their own investments, it is important to evaluate the success or lack thereof prior to closing accounts and transferring funds. If investment accounts are performing well, those assets need not be touched and access can provided to the other partner in writing.
HeadDrama:
Does it make sense to keep accounts separate?
Brad Kanter of Kanter & Associates:
This is a personal decision for many people. For some people money is a part of their self-identity and they prefer to be in complete control of how it is managed. In addition, the degree of formality in the relationship is a consideration. For example, married people in the case of divorce are entitled to the other partners’ assets even when separate accounts are maintained. It should also be noted that trust is a key ingredient to deciding about merged or separate accounts. However, it is worth noting that from my experience, trust whether associated with money or other relationship issues is a key ingredient to calling a person, a partner.
HeadDrama:
What are the advantages of joining your finances?
Brad Kanter of Kanter & Associates:
For many other people combining accounts creates additional efficiencies for managing money. One bank account can limit recordkeeping issues and improve security.
HeadDrama:
What happens if you merge finances and then break up?
Brad Kanter of Kanter & Associates:
Depending upon how formal the merging of a relationship becomes, when two people “break up” amicably, finances can be disengaged as they were merged. However when people are married, finances are disengaged in a legally agreed structure.
HeadDrama:
What are some important things to talk about before merging finances?
Brad Kanter of Kanter & Associates:
Some considerations to be discussed prior to merging finances should center around a common understanding of how money is to be spent, who is in charge of managing the funds and recordkeeping. Although two people can certainly spend money from the same account, it is customary and effective for one person to be assigned and for them to graciously accept that level of responsibility.
Brad Kanter, C.P.A., E.A. Principal Kanter & Associates, P.A., C.P.A. has 17 years experience in public and private accounting. Kanter & Associates P.A.,C. P.A.’s founder is a licensed Certified Public Accountant (CPA), an enrolled agent licensed by the U.S. Department of Treasury.
Brad Kanter received a B.S. in Accounting from the University of Tampa including his fifth year. He also received a B. A. in Marketing from Florida Atlantic University. He is working on his Masters Degree in Accounting specializing in Forensic Accounting. Kanter & Associates, P. A., C.P.A. is a firm that has been serving their clients for over a decade in the Tampa Bay Community.
Brad Kanter C.P.A., E.A. Principal Kanter & Associates, P.A., C.P.A. is a resident of the Tampa Bay area. He is married and the proud Dad to three boys.
