Should Couples CombineTheir Finances? THE PROS AND CONS
A few decades ago, almost all married couples combined their incomes into joint accounts. Since most households only had one earner, it just made sense. Today, a lot has changed, and only three- quarters of married couples combine finances. Now that there’s more than one way of doing things, it can be hard to determine which option might be best for you and your spouse.
Combining finances is the traditional way of doing things for a reason: It’s streamlined. With a joint account, it’s simpler to budget, save, and reduce debt. If one partner makes significantly more than the other, it also puts both people on even financial footing. But problems do arise. In some cases, the higher-earning spouse may feel taken advantage of, and someone who is previously used to managing their own money can bristle under new spending restrictions. Furthermore, if one person spends money foolishly, they’re spending it for both parties. And if the couple splits, separating assets becomes tricky. That’s why keeping finances separate is increasingly popular, especially as couples settle down later in life with established careers and salaries. This method provides more independence for each person in the relationship and generally results in fewer disagreements regarding disposable income. It also provides protection if someone’s partner makes a big financial mistake.
But despite all of the potential upsides, keeping finances separate can actually create the need for more conversations about money. First, couples should decide who is responsible for what. Disagreements can arise when determining how to split the bills, and getting both shares put against one payment can be annoying. Plus, money arguments aren’t eliminated — couples with separate finances can still face problems when one person always pays their part of the bills late or buys something frivolous instead of saving for a joint purchase. Some couples try to have the best of both worlds by opening joint and individual checking accounts. In the end, the only “right” way to handle money as a couple is the way that works best for your relationship. But no matter what method you choose, managing money together will require trust, difficult conversations, clear communication, and transparent expectations. Getting on the same page can save you from future problems — in both your relationship and your bank account.
UNDERSTANDING POWER OF ATTORNEY MAKING THE BEST DECISIONS FOR YOUR LOVED ONE
Last month, we discussed different ways to make certain situations easier for you and your loved one after they have been diagnosed or have begun showing symptoms of dementia or Alzheimer’s disease. This month, we’re taking a deep dive into how to step in and act for a loved one by using a power of attorney. Power of attorney is a legal authorization that gives a designated individual the power to act for another person. A power of attorney can be used to make medical, financial, and other life decisions for an individual who otherwise couldn’t make these decisions on their own. A power of attorney does need to be signed while the individual giving it is competent, which makes this process an incredibly important part of estate planning. If you have a loved one who becomes incapacitated without a power of attorney, neither you nor anyone else will be able to make financial or medical decisions on their behalf, even if you know what they would have wanted. The same goes for those with dementia and Alzheimer’s. If the individual is not deemed competent, they cannot name a power of attorney. If you’ve been named as the power of attorney for a loved one, you may be wondering how to use it. You’ll need to bring the power of attorney or a copy to their bank, doctor, or another third party and explain that
you are acting under the authority of the document and are authorized to do this particular act. You may have to sign a document, but there shouldn’t be any issues if you possess the power of attorney. When signing, make sure you are not simply signing your name. You need to indicate that you are signing as the individual and not yourself to avoid becoming personally accountable for anything you’re signing on their behalf.
If you’re named the power of attorney for a loved one, you may have to make some difficult decisions on their behalf. Always keep their best interests in mind when making these decisions. If you are interested in beginning your estate plan or need to make some updates, give our office a call. We’d be glad to help you and answer any questions you may have.
Plan today for peace
2 | ( 951 ) 445-4114
Made with FlippingBook Ebook Creator