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Financial questions couples should ask before marriage

Here's what you should talk about when it comes to money before you tie the knot.
Financial questions before marriage
Should you should file taxes together or get a joint savings account as a married couple? Here's what the experts say.TODAY Illustration / Getty Images
/ Source: TMRW

Talking about money doesn't sound very romantic, but getting on the same page about finances can set your marriage up for success.

TMRW consulted top financial experts for the three questions every couple should ask before they get married.

1. Do married couples have to file taxes jointly?

Just because you said "I do" doesn't mean you have to take care of all your financial matters with your new spouse. At some point, all newlyweds have to decide if they're going to file taxes together or separately, and there are pros and cons to each route.

"It's a decision married couples should make based on their own financial situation. It is a drill of figuring out which way — filing jointly or separately — yields the lowest tax rate," Clay Stackhouse, regional outreach manager at Navy Federal Credit Union, said.

The case for filing taxes jointly:

When you get married, you combine lives, families and finances. And sometimes, filing your taxes jointly can pay off, too (literally).

"One of the advantages of filing jointly is qualifying for multiple tax credits, such as the earned income tax credit, American opportunity and lifetime learning education tax credits, credit for adoption expenses and child and dependent care tax credit," WalletHub analyst Jill Gonzalez.

Some couples have vastly different salaries or have one parent staying at home, and filing jointly can help offset any major differences in income.

"Because my wife has always been a stay-at-home mom, our tax bracket rate is lower when we file jointly, so that is what we have always done," said Stackhouse. "During my time in the military, many of my colleagues, especially the younger service members, had dual-income families. Their decision on how to file would depend on how much each spouse made what would result in the lowest tax bracket."

The case for filing taxes separately:

Most of the time, it makes sense for couples to file their taxes jointly, but there are a few situations where filing separately makes more sense.

"For instance, if one of the spouses has a large amount of out-of-pocket medical expenses to claim, it might make more sense to file separately," Gonzalez said.

Filing jointly makes a lot of sense if you and your spouse have very different salaries, but if you take home a similar amount of money, filing separately could possibly mean you end up paying less in taxes.

Last, but certainly not least, filing separately might appeal to you if you're worried about being responsible for your partner's taxes (if they end up owing any money).

Should married couples have a joint savings account?

Money is a deeply personal topic for many of us, and the prospect of pooling your finances with a spouse can feel a bit scary at first. In many cases, couples decide to have some kind of joint account but some prefer to keep their accounts separate and simply pay bills together.

"There is no one-size-fits-all answer. Some couples work better with all their finances combined, and for others it's best they maintain separate accounts. The important thing is to have this issue straightened out at the beginning of the relationship," Gonzalez said.

The case for getting a joint savings account:

As a married couple, you tend to share many expenses, like child care and mortgage payments. Since keeping track of multipleaccounts can get a bit time consuming, many couples find it easier to combine all their funds into one joint account.

"One of the pros of a joint savings account is that you have all your funds in one place. Working together toward the same financial goals can also become easier," Scott Henderson, financial coach and member of the Association for Financial Counseling and Planning, said.

Another reason to combine finances? You'll score a bit of extra deposit insurance, which can certainly come in handy as you advance throughout your career.

"The FDIC provides $250,000 insurance coverage per depositor, per institution. A joint account with two owners will get a $500,000 deposit insurance," Gonzalez said.

The case for keeping your accounts separate:

There's something to be said for only having to keep track of your own money, and it's understandable that some couples prefer to keep separate bank accounts. Having two accounts means that both partners are responsible for managing their own money and savings, and can also help you maintain a sense of individuality while you're part of a couple.

"Some couples may want to have their own discretionary accounts, which they can use as they see fit in addition to a joint account that’s used for household and family expenses. With this approach, there’s adequate funding for family needs, but each person may appreciate the freedom that goes with having their own funds," said Steve Pilloff, associate professor of finance at George Mason University’s School of Business.

When you're entering into a marriage, the last thing you want to think about is getting divorced, but safeguarding your money for the worst-case scenario is a reason that some couples choose to keep their finances separate once they tie the knot.

"If you have a joint account, legal action may be necessary to recover funds in case one owner depletes the balance. It also means a creditor can collect against the joint account to satisfy the debt of one of the owners," Gonzalez said.

Should married couples be on the same health insurance policy?

Whether you just joined your company's health insurance policy or you've been carrying the same plan for years, switching to another insurance can sound like a pain. But many couples consider the opportunity to combine policies as one of the legal perks of marriage, and it can sometimes save you quite a bit of money.

"Being covered under the same health insurance policy may be good for some couples, but make no sense for others. There are several factors couples should look into before making a decision about their health insurance coverage," Gonzalez said.

The case for combining health insurance policies:

Paying for two health insurance policies can get expensive, and most of the time, it makes sense for one spouse to join the other's policy.

“It’s typically more financially advantageous to go on a family policy as the premiums are frequently less than the cost of two single policies," Pilloff said.

When you're deciding whether or not to combine policies, you should also compare plans and see how much doctor's appointment copays and out-of-pocket maximums cost on both plans, since those unexpected fees can add up over time.

The case for keeping your health insurance policies separate:

On the other hand, some couples find that keeping their health insurance policies separate makes more sense. For instance, if one spouse is healthy but the other has significant medical issues, it could be better to have two policies.

"For example, my wife and I have two different policies. I have a high-deductible, low-premium policy because I rarely get sick and hardly ever visit the doctor. She, on the other hand, is more susceptible to getting sick and visiting the doctor. So she has a low-deductible, higher-premium policy. This ends up saving us hundreds of dollars per month," Henderson said.

If you're pretty loyal to your current doctors and don't have any intention of switching to new ones, you should also check to see if they're in your spouse's network before changing policies.

"Make sure to check whether your doctors participate in the new plan. For a lot of people, the benefit of continuing with a trusted doctor far outweighs financial benefits, even large ones.” Pilloff said.