Should unmarried couples have one account?

When a couple joins financial forces, it’s typically to achieve a joint savings goal or contribute to shared expenses, such as those that come from living together.

This is a typical step for married couples, but more unmarried couples are taking the plunge to combine households: The number of unmarried partners that live together nearly tripled between 1996 and 2017 from 6 million to 17 million, according to the most recent Census Bureau figures.

One way to streamline shared expenses is to open a joint bank account, which can simplify the way you pay for things together. If you’re considering it, you’ll want to think about the pros and consn.

The benefits

Joint accounts can be useful for managing regular expenses as well as longer-term financial goals. Perhaps you and your partner want to make it easier to pay your rent and utility bills from one pot, or maybe you want to save for a vacation, wedding or house together.

A joint account can be a useful place to start, as long as you lay ground rules together for how much you each plan to contribute, how you’re going to use the funds and what you’ll do if your relationship ends.

Taylor Kovar, a certified financial planner and CEO of TheMoneyCouple.com, says unmarried couples should be very careful about opening a joint account. There aren’t as many legal protections as there are for married couples, who have inherent legal co-ownership of assets acquired after they got married. He says that there’s safety in keeping your own accounts and then opening a separate joint account that you and your partner both contribute to.

“There needs to be very transparent tracking for the account,” Kovar says. “Both people should be able to access the account at all times. You should both agree on what the account can and can’t be used for, so that way if an argument occurs, then you’ll both be clear on what went wrong.”

The drawbacks

What happens if you break up?

Parting ways is hard enough, but when there are shared assets involved, it can be even harder. The simplest way to handle a joint account post-breakup, Kovar says, is simply to split the funds in half. But if one partner contributed more than the other — perhaps because of a higher salary — then it may be a good idea to split it based on the percentage that each partner put in.

April Lee, the financial blogger behind HassleFreeSavings.com, is grateful that she and her former long-term partner never commingled their finances, especially when it came to the house that she purchased but that they both lived in. He consulted a lawyer to try to sue for ownership after they broke up, but in the end, he couldn’t prove that he had contributed financially toward the house.

“He couldn’t show that one penny had gone toward joint assets,” Lee says. “Not having any joint finances saved my bacon.”

How to do it

If you decide to open a joint account with your partner, you’ll need to research accounts that can be co-owned. Once you’ve decided, check with the bank to see what documents and identification both of you will need to become joint owners.

You also might want to ask your bank if there’s a way to set a withdrawal limit on the account, where if one person wants to withdraw beyond the set limit, the other partner has to approve it too.

Once the joint account is set up, it can be used for whatever you and your partner have agreed on.

The decision of whether to open a joint account with your partner is deeply personal. If you choose not to, you have other options, such as giving money to each other to pay for joint expenses.