Ask Kyle: Should my partner and I get a joint bank account?

Hi guys--it's a new week again and I've got a brand new Ask Kyle blog entry for you, this time centering on a relationship question. This one comes from Amblin who wishes for his location to remain private. Here's his original email:

Q: "Dear Kyle... Hi there. I stumbled across your blog the other night and spent an hour or so reading some of the advice that you've given to your readers. Maybe you can help me out too. I've been with my partner for over five years, and we fully intend to spend the rest of our lives together. Our state prohibits gay marriage but we've chosen to stay here to be close to friends and family--until we have marriage equality here, it looks like Manny and I won't be saying those vows. Nonetheless, we feel that we are married at heart. We have that close of a relationship. We've lived together for almost four years. And we talk about adopting kids all the time, though I'm not sure how soon we'll materialize those plans. The question right now is this...

"We handle all our finances together--or more accurately I handle both of ours--but up to now we have maintained separate bank accounts. Lately it's really been getting to me. I wish we could combine our accounts into one joint account like married couples do. While I'm great at keeping the bills paid, I don't know that much about the legal side of things. Should Manny and I get a joint bank account, or are there drawbacks that I don't know about? Thanks Kyle. I'm really looking forward to hearing your advice on this." To find out the answer, keep reading.

A: Amblin, great question. Combining finances whether inside a legal marriage or outside of one can be very complicated if and when you do decide to break up. The fact is, since as gay people we are unable to marry legally (unless of course you live in Massachusetts or California at the present time), many of us do choose to combine our finances as if we were married.

I think step one is simply to make sure that you two feel completely secure in your relationship. A joint account means that either one of you could simply make one giant wthdrawal and leave the other completely penniless at any point--so if you have any trust issues or any doubts as to where your relationship is going, keep those accounts separate. (In a marriage, depending on what state, you those funds would most likely be protected.)

If you decide to make the leap, I would recommend drafting a domestic partner agreement--similar to a prenup--to spell out who gets what in the event of a split. Assuming that you do feel secure enough to combine them (I don't think you would have asked me the question if you didn't feel that way), let's talk about the reality of that.

The only real benefit you're going to see is perhaps a little less complication in your home office when it comes to paying the bills. Having a joint bank account isn't going to make you any more "married" than you already are--until we are granted full marriage equality in this country, we'll still be "unmarried couples," period. But what about the emotional side of things? What about the heart? If seeing both of your names at the top of that check will make you feel more established, or more romantic, or more (fill in the blank), then I say it's a good thing. It's something that straight couples take for granted every day.

Legally there are indeed some pros and cons to consider, and some inconveniences as well. You're still going to have to file taxes separately--since the federal government and your state government don't recognize gay marriage to begin with, they aren't going to view the two of you as a single unit even if you do share a bank account. This means that you'll most likely find yourself doing more work to keep everything organized for tax time, or scrambling at tax time to figure it all out.

A big drawback could be the gift tax--any gift over $12,000 is subject to that, and when you split your account with your partner, that is essentially giving them a gift of half your account--and vice versa from them to you. This is something that legally married couples don't have to worry about. These are truly the murky waters of legalities and loopholes. You'll want to talk to a professional about this unless you are prepared for the IRS to come after you for those taxes later. Scary stuff.

Where could you see a benefit? When it comes to estate taxes, if you have combined all of your assets (owning everything jointly, not just a joint bank account), if one of you passes away in the future, your partner could avoid the estate tax. Whereas when one partner of a married couple passes away and leaves their assets to their surviving partner, that surviving partner does not have to pay any estate taxes--you and your partner would indeed have to pay estate taxes if one passes away and leaves their assets to the other. If I'm not mistaken, by jointly owning everything, you would bypass that entirely.

Now Amblin, I'm not a lawyer, and in your case that's definitely exactly who you need to talk to if you want to do everything in the right way to protect yourself and your partner. Look for lawyers who specialize in working with gay couples. Ask around. You might find some of them handing out business cards at local Pride events. If you'd like to get more information on financial planning for gay couples, here's a great article to get you started.

To sum it up, combining bank accounts can either simplify your bill paying process or bring you a lot of headaches in other areas. There's no way for me to give you a concise answer to your question, because without really knowing all the details of your relationship and finances, it's hard to say what would be best for the two of you in particular. When it comes to your finances, you need to talk to someone with professional experience and legal knowledge. Any more questions that I can help you with? You can reach me at kyle@blappr.com anytime, and while I'm no expert when it comes to the financial arena, I'll be happy to do some research and let you know what I come up with! Have a great Wednesday and I'll see you back here tomorrow with a fresh update!

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Kyle, Blappr's Gay Sex Toys Expert
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