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Combining finances once married

Discussion in 'Property Finance' started by Santaslayer, 16th Jan, 2016.

  1. Santaslayer

    Santaslayer Well-Known Member

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    Hi All,

    Long time lurker since the Somersoft days. Appreciate everyone's feedback on this matter.

    Sooner or later, I will be getting married. I was wondering how people combined their finances once they were married. To give you an idea, my partner has 1 IP and 0 PPOR, I have handful of IP's, no PPOR, and a very modest share portfolio. All the aforementioned assets are owned under our own names.

    How did people logistically combine their assets since these are owned in our individual names? Did people also create shared bank accounts? How is money and the cashflow from PAYG income and investments managed? Is there an agreement with discretionary purchases?

    Would greatly appreciate any views and to hear what works for you! Thanks!
     
  2. Heinz57

    Heinz57 Well-Known Member

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    Old fashioned view is that it is marriage and you pool everything.

    Of course it was different in the old days.

    We started out with nothing and we still have most of it left.
     
  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Don't do it without careful consideration. There are a number of strategies that cannot be implemented if you have joint ownership of property and bank accounts with the spouse.

    examples
    Spousal transfer of property in NSW without stamp duty
    Spouse A lending money to Spouse B
    CGT strategies when choosing which property to sell
    Death strategies - leaving whole properties instead of half
    Asset protection strategies - only one on the loan instead of 2 which reduces risk
    Borrowing serviceability strategies - not jointly liable for debts so can borrow more.

    etc

    I think I have written about all these in my tax tips and legal tips.
     
  4. Santaslayer

    Santaslayer Well-Known Member

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    Thanks Terry, I will have a peek at your posts
     
  5. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    Keep it simple - always purchase properties in single names (never in John and Jane's name) and always ensure that all income is directed into the offset that is linked to your owner occupied loan.
     
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  6. Marg4000

    Marg4000 Well-Known Member

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    Hubby and I went halves in a block of land when we were engaged. Each got our own loan for half the total amount and we each made repayments.

    When we came home from our honeymoon we had $135 in the bank. Standing joke over the years is that the first one who wants out can take their $67.50 and nick off!!
    Marg
     
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  7. Bran

    Bran Well-Known Member

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    I reckon my wife would take that deal.
     
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  8. pinkboy

    pinkboy Well-Known Member Premium Member

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    I reckon my wife would sue me for more than half and spend $50k in legal fees to get it!

    pinkboy
     
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  9. dabbler

    dabbler Well-Known Member

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    Well, I think you have a better base, you can continue adding property separately, if you split it makes no difference anyway as to what you gain going forward, not sure how they treat prior assets.

    One clear advantage will be land tax thresholds.


    If she saw one of the smarty pants who encourage them to go for it saying they will get everything.........it is a scam, not sure of now, but often the solicitors would be friends......both encourage each party to go for it.......
     
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  10. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    It does make a difference in family law. When making a property settlement under s79 FLA there are various things taken into account and this includes financial and non-financial contributions to property legally owned by either party to the marriage (and possibly property owned by others).
     
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  11. dabbler

    dabbler Well-Known Member

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    I really do not know, I think the key is choosing a partner where it won't matter.......I would assume it would be fairer than what it was many years ago.
     
  12. MTR

    MTR Well-Known Member Premium Member

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    .... and what's fair? I think its what works for you as a couple. No right or wrong.

    We have combined bank accounts, loans etc etc, everything is pretty much 50/50.

    My partner does not check out credit card statements to see what I am spending and vice versa, I really could not care less and could not think of anything worse than keeping tabs on each other.

    MTR:)
     
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  13. dabbler

    dabbler Well-Known Member

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    What's fair ? well what is just and reasonable to most would be fair.

    It would not be fair, for instance, for one to have significant assets or cash, the other not or nil, then 12mths later decamp with 50% lets say.
     
  14. MTR

    MTR Well-Known Member Premium Member

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    That's more about the person not the money, choose wisely...:)
     
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  15. dabbler

    dabbler Well-Known Member

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    Yeah, that is what I said......choose the right one :)
     
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  16. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    This doesn't happen.
     
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  17. vtt

    vtt Well-Known Member

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    I agree 100% with this. Relationships are built on trust and if there's no trust then don't get married!

    You should not need a lawyer to divide up your assets before you even marry. If you do, then I (who am not qualified in marriage counseling or financial advice) would advise to reconsider your choice of partner.

    You go into a marriage and you start sharing stuff. We are the same as MTR and her partner except both of us check the credit card statements. From time to time if he's buying too much stuff then I'll talk to him about it and vice versa for me too.
     
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  18. KayTea

    KayTea Well-Known Member

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    It's not just about your partner - it can also be about protecting your assets and position from an 'extended family' claim, if things don't go well.

    If I was about to walk into a relationship with a bucketload of assets, and the other person comes in with nothing, and we're okay with that, then I can't see there being an issue. But, if the other person then passes away, and their kids are of the position that "well, let's just go after half of 'the estate'" etc, then I would think that having a FBA done up that clearly shows that their parent didn't actually own any of the estate, may come in handy.

    I'm sure @Terry_w will tell me if I'm wrong…………..
     
  19. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    If the non owner spouse were to die it would be very difficult for their children to make a claim on the assets of the owner spouse. They could possibly challenge the will, but the will only deals with assets legally owned by the deceased. They could make a Family Provision claim if they do not receive adequate provision, but only out of the assets owned by the deceased - expect where there is a connection to NSW. In NSW non owned assets can be claimed against (Notonal Estate orders) but this is generally limited to assets the deceased had some control over - trust, super and Joint Tenant assets.
     
  20. Santaslayer

    Santaslayer Well-Known Member

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    Thanks for the responses so far everyone, really appreciate it

    Hi there it's not just about protecting assets, my question also related to how people were setting up their bank/loan accounts etc for tax purposes. How does the money flow? I assume I shouldn't have a joint account as the main offset for example? Tax office would be confused with where everything is going?