Honesty is a couple’s best financial policy

updated 4:42 p.m. ET Oct. 14, 2009

NEW YORK - If you need a legitimate reason to pay attention to the tabloid tribulations of reality show couple Jon and Kate Gosselin, follow the money.

A court on Tuesday ordered Jon Gosselin to return $180,000, out of a total $230,000 his estranged wife accused him of looting from their joint bank account.

While the numbers for TV stars may have more zeros, this part of their bitter divorce fight reflects a big concern for couples from all walks of life: Is it better to mingle money or to keep finances separated?

This very practical issue can spark an emotional discussion. For some couples, joining finances is as much a symbol of their commitment as combining households. For others, keeping separate accounts is a way to avoid conflict and maintain a measure of independence.

Financial professionals say there's no system that's right for everyone.

"The important thing is that both people need to be involved in the finances at some level," said Jean Keener, principal of Keener Financial Planning in Keller, Texas. In many relationships one person will take control of the money while the other remains unaware of details about things like bank accounts, investments and even household expenses. That is fraught with potential problems, particularly if something happens to the person in command.

Reasons for concern
Beyond the obvious issue of trusting that a spouse won't drain a joint account, there are several other factors that can complicate deciding how to handle personal finances.

A key issue is each person's attitude toward money. If one is a "spender" and the other a "saver," trying to completely combine finances may create problems. Similarly, if one person is meticulous about recording transactions and the other is not, disagreements or costly mistakes may result.

For some couples, the amount they have to contribute to the relationship can create tension. If one person has more money saved or earns a higher salary, for instance, the couple needs to discuss how much each will contribute. Likewise, there needs to be a discussion about any expectations of helping to pay off each others debts.

Personal histories also come into play. A prior marriage or children will likely inform how someone wants to handle money entering into a new relationship. If there are children involved, a parent may want to keep a certain amount of money separate and consider a more detailed estate plan.

Liability issues likewise need to be addressed. If one partner is in a profession with a high risk of lawsuits, like health care, or owns a business that could get sued, having only joint assets could endanger the couple's financial stability in a worst-case scenario. Even matters like whether there is adequate insurance on each person's car could put joint assets at risk, if the underinsured has an accident.

On the other hand, holding at least one joint account enables both people to access money that could be frozen in an individual account if the person dies. Since an estate can be held up for months, it's important to make sure at least some funds are available a surviving spouse.

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