My partner and I are unmarried and will be remaining that way. We want to finally start an investment portfolio and taking advantage of things like IRAs etc. I will be managing the portfolio(s) for both of us.

My question is, should we open a single joint, brokerage account, etc., or should we open separate accounts wherever and manage them independently? She has considerably more existing deductions than I do (mortgage interest primarily), but I'm not sure how that would impact a joint account. I know that when we file our separate taxes, I can't take advantage of any of her deductions.

I'm also wondering if it makes sense to open multiple IRAs for each of us. We plan to max our contributions since it's so relatively little each year, and since we are our own employer we can also make matching contributions from the company. Multiple accounts won't allow us to contribute more, I understand that. But we're interested in having a portion of our portfolio managed by services such as Betterment, Acorns, Wealthfront, etc. and then some fully self-managed. Not sure if everything should be strictly in IRAs, or some in IRAs and some in standard accounts, then the joint vs. separate accounts question...

Several questions in here I guess but I'm just a bit lost in trying to come up with the best overall approach. Input is appreciated!

  • What country are you in? – Marcus D Apr 25 '16 at 19:53
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    IRAs are specific to the US – NL - Apologize to Monica Apr 25 '16 at 19:57
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    Yes I'm in the USA, sorry for not specifying. – user41486 Apr 25 '16 at 20:30
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    The answer is simple. There is not a single advantage to having shared investment accounts, but there are many disadvantages. – TTT Apr 25 '16 at 20:48

Since the I in IRA stands for Individual there is no such thing as a Joint IRA. Even married couples can't have a Joint IRA.

Now who has the logins is a different matter....

  • Ah yes duh, of course. I was thinking of just plain joint brokerage accounts, and also IRAs, and merged them in my head. Will update my question to better state. – user41486 Apr 25 '16 at 19:32

I don't think there is a right or wrong answer and it will really depend on your situation. If you keep your brokerage accounts separate, you have the benefit of simplifying your tax return since each of you will get a separate 1099 from the brokerage company. If you create a joint account you will have to figure out how to divide them when you file your individual tax return.

  • Excellent point, we probably need to have a chat with our CPA about this. Thanks! – user41486 Apr 25 '16 at 20:29

There are, of course, the potential complications if you split. You're probably reasonably aware of those, so I mention them mostly for completeness.

The bigger issue, which argues for going is separate, is that you can inadvertently trigger tax consequences with the joint account. As a specific example, if you contribute disproportionately to the account, the joint ownership may constitute a "gift" under the US tax code from the "big contributor" to the "small contributor", even if it wasn't really intended that way. (Married couples have an explicit exemption in the tax code that gets them out of this potential issue that unmarried partners do not have.) Even if you fly under the radar on this while living, in the event that one of you dies it will likely be an issue at death of a partner since the assets will be part of the deceased partners taxable estate even though it doesn't go through probate if held joint tenants with rights of survivorship.

See, for example, http://www.diversityinc.com/wells-fargo-column/wells-fargo-advisors-lgbt-insight-unmarried-couples-joint-tenancy/

  • Fantastic point, thank you for pointing that out. I wasn't aware of this "gifting" issue. It sounds like there really are only potential problems/complications in going joint, and potential advantages in staying separate. Definitely leaning that way. Thank you again! – user41486 Apr 25 '16 at 20:29
  • @user41486 People will appreciate an up-vote on answers you like. You can up-vote more than one answer. – user32479 Apr 26 '16 at 0:01
  • Thanks but the site will not allow me to upvote, and I do not wish to log in here. – user41486 Apr 26 '16 at 18:10

If it was me, I'd go individual. While your kind of partnerships can last longer than marriages there tends to be far less legal recourse in case of a split.

Now there is nothing stopping you from forming a legal partnerships that covers all the bases of the partnership dissolving (including death). However, failing that, each should have their own accounts.

It could be fun. Each of you put in an equal amount and see who has better returns. Or each of you can pick part of the other's portfolio.

Now if you two choose to invest in real estate together, you should get those partnership agreements in place.

  • Yes, and we have various documents in place to treat our partnership appropriately, so we're good there. I'm personally leaning towards individual as well. It's more work (having to open/close positions in two accounts, potentially even in the same assets) but probably keeps things a bit cleaner. – user41486 Apr 25 '16 at 20:28

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