I've been married to my wife for eight years & live in Washington State. For that entire time, we've had separate bank and investment accounts, mostly due to inertia.

I make most of the money, and so I manage all of our finances out of my personal accounts. My wife isn't a finance geek like me, so her paychecks just pile up in her bank account until I log in under her name and do something with them. Usually that's moving them over to her Vanguard account and investing them. The vast majority of our total assets are in my accounts.

We both feel it would be better to merge our finances into single accounts. That way, I get a comprehensive view of our cash flow, it's easier for me to manage our finances, and she doesn't have to deal with any of this.

We already have a joint credit card, and we own our house under both of our names.

The question

What are the financial implications of merging accounts? I'm thinking about taxes, inheritance, etc.

Some examples of the things on my mind:

  • Inheritance. If I die, my wife will have access to everything in any joint accounts, without hassle. We have a will, so she'd get the money anyway, but making the process easier is a perk. However...
  • Capital gains. If I die, the cost basis for any investments I own will be stepped up when my wife inherits them. But as I understand it, that step-up is reduced by 50% on joint accounts. That's a potentially huge tax penalty. Conversely, if she dies before me and all the assets are in my personal accounts, I'll get no step-up at all, so the status quo also has some risk. I'm not sure I understand this fully, though.
  • Making transactions. I imagine that if we have all our assets in joint accounts, we'll both need to sign off on some transactions (maybe just the big ones?). That will be added hassle for both of us. I'm not sure exactly how this would play out, though.
  • Lawsuits. If someone sues my wife for whatever reason, AFAIK right now they can't go after my personal money (is this right?). If we have a joint account, they certainly could.

Is my understanding of these issues correct, and are there other issues I haven't listed above that could come back and bite us if we move forward with this?

(I'm also aware that if we decide to divorce, or if one of us gets in trouble with a collection agency or similar, joint accounts could pose problems. We're happily married, though, and our financial situation is very good, so I'm not worried about those types of issues.)

Approaches I'm thinking about

The simplest approach would be to create a joint checking account and a joint investment account. (In particular, "Joint Tenants with Rights of Survivorship" accounts, as described here.)

I could also create a joint checking account but keep my investment account for myself. Then my wife would have her paychecks go into the joint checking account, and I would move her money, along with my own, into my investment account from time to time. (AIUI, this would constitute a "spousal gift" and would not trigger any red flags with the IRS.) This might help with concerns about capital gains and inheritance.

There are also more elaborate options, like granting my wife the right to manage an account without making her an owner.

Related questions

There are several questions already about merging finances, such as these:

The answers to these questions discuss practical concerns such as trusting one another, keeping money for personal expenditures, etc. My question isn't about that; it's about legal issues, tax implications, and so forth.

  • 1
    Just to say upfront this doesn't include your 401K and IRA accounts. Jan 3, 2019 at 19:56
  • 1
    The primary implication is that this puts you at far more risk than you're at now. You're losing a lot, and your wife is gaining a lot. Why would you do this? Always look out for #1. That's you, not your wife.
    – user91988
    Feb 12, 2020 at 17:43

2 Answers 2


That's a lot of questions, I'll try to answer the ones I can, but it's not possible to answer the one about capital gains without knowing your legal and tax jurisdiction.

Inheritance - yes you basically have it, anything in your name will be a hassle for her if you die first and vice versa, but that can be solved by each of you having separate trusts own the individual accounts and have each other be successor trustees. Joint assets are obviously easier than that. Also, some types of accounts such as some bank accounts can have beneficiaries listed. That still involves sending in a death certificate, etc, but can pass outside of probate.

Capital gains - as above, need your tax jurisdiction to answer that.

Transactions - "Joint Tenants with Rights of Survivorship" means both joint owners can make transactions, as your link mentions so there isn't much hassle. It's real estate where both parties have to sign in the US. Also like you said you can use account management permissions to manage accounts without owning them in your name. Another option is to set up auto investment at a monthly amount so that you don't have to monitor her account until it piles up. The money would just get invested regularly.

Lawsuits - Yes, your individually owned assets are more protected if she is sued, and vice versa. So basic asset protection would say the person who is most likely to be sued should own the least assets. Cars are trickier, you'd need to consult a lawyer and again it depends on your state. Also unless one of you is in a career or position unusually likely to get sued such as an Obstetrician, it's probably not worth the hassle to move money to the other spouses name.

SE isn't for advice so only you can decide which option is best for you.

  • 1
    Hi T.M. - I just started a bounty on this question since I am also looking to understand the tax implications of merging accounts with a spouse. Since he provided jurisdiction in a comment after you originally posted I think it should be answerable now, if you're interested in updating with this info :)
    – Em C
    Apr 17, 2019 at 21:09
  • @EmC I don't believe that adding the United States tag makes it fully answerable because the capital gains taxes impact state taxes and whether the state is a community property state or not has effects on several tax aspects including estate planning.
    – T. M.
    Apr 17, 2019 at 23:18
  • Sorry about that, there had been a comment from the OP earlier with his state (WA). Looks like a mod has edited that info safely in the question now :)
    – Em C
    Apr 18, 2019 at 1:27

I'm also aware that if we decide to divorce ... joint accounts could pose problems.

Washington is a Community Property state, so all the increases (through contributions, dividends/interest, capital gains, etc) in those accounts in the past eight years are both of yours no matter who's name the accounts are in. Even the IRAs and 401(k) accounts.

We're happily married, though, and our financial situation is very good, so I'm not worried about those types of issues.

Famous last words. It's very important to get a documented tally of the assets and liabilities that each of you brought into the marriage.

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