Supreme Court Rules on Joint Accounts PART3

b) Wording of bank documents: The clearer the language used in the bank document to suggest the transferor’s intent regarding the beneficial interest in the account, the more weight the evidence will carry. c) Control and use of the funds in the account: Exclusive control and use of the account by the transferor may be of assistance in determining intention but is not determinative. d) Granting of Power of Attorney: The granting of a power of attorney may be of assistance in determining the intention of the parent, especially if the evidence suggests that the transferor appreciated the distinction between granting that power and gifting the right of survivorship. e) Tax treatment of joint accounts: Whether or not a transferor continues to pay taxes on the income earned in the joint account during his/her lifetime may assist in establishing intention, but such evidence is not determinative. It is up to the Court to determine the weight to be given each element of the evidence. It is of interest to note that the Supreme Court did raise the question of the potential capital gains tax payable when transferring assets to a joint account, but it declined to comment on the issue further. The Supreme Court stated that “these are matters for determination between the Canada Revenue Agency (CRA) and taxpayers in specific cases.” Conclusion: Where a parent gratuitously sets up a joint account with an adult child and there is a dispute as to the ownership of the survivorship interest after the death of the parent, the presumption of resulting trust applies and the onus is on the child to establish the parent intended to give the child the survivorship interest. The Court will consider evidence establishing the intention of the parent at the time of the transfer. The language of bank documents, evidence of use of the account and payment of taxes on the account may not be determinative of the issue. To avoid litigation among family members a parent wishing to set up a joint account with an adult child should consult a lawyer and follow the advice given about how to clearly document the intention with respect to survivorship rights.

Supreme Court Rules on Joint Accounts PART2

Pecore v. Pecore (2007 SCC 17) A father placed approximately $1 million of his assets in joint accounts with his daughter. She was one of several children. In his Will the father left the residue of his estate to his daughter and her husband equally. The father died and his daughter and son-in-law later divorced. The ex-husband challenged the daughter’s right to the survivorship interest in the balance in the joint account. Madsen Estate v. Saylor (2007 SCC 18) Again, a father placed approximately $160,000 of his assets in a joint account with one of his daughters. In his Will the daughter and her two siblings were to share 50% of his estate. The action was commenced by the siblings against the daughter in her capacity as the executor as she did not include the joint accounts in the distribution of the estate. There were a number of similarities in both cases including:  The father had control and use of the assets in the joint accounts during his lifetime  The father continued to pay all the taxes on the income earned in the joint accounts  The father had also given power of attorney to the same child whose name is on the joint accounts. However, after considering all the evidence, the Supreme Court of Canada reached different conclusions as to the intention of the parent in each case. In Pecore, the Supreme Court found that the father had indeed intended to gift survivorship rights to his daughter whereas in Saylor the Supreme Court found that there was no intention to gift the survivorship rights. The majority of the Supreme Court applied the following principles in both cases in reaching its conclusion: 1. Where a joint account is set up with an adult child and funded gratuitously by a parent, the presumption of resulting trust applies and the onus is on the child claiming the survivorship interest in the account to rebut the presumption by showing the parent intended to gift that interest to the child. If the evidence is not sufficient to rebut the presumption on a balance of probabilities, the joint account will be considered as part of the parent’s estate to be distributed according to the parent’s Will. 2. The Court will consider the evidence establishing the intention of the parent at the time of the transfer including: a) Evidence subsequent to the transfer relevant to the intention of the transferor at the time of the transfer.

Supreme Court Rules on Joint Accounts PART1

In two much anticipated decisions, the Supreme Court of Canada ruled on the legal presumptions to be applied when determining the intention of the transferor as to the survivorship interest in a joint account on the death of the transferor. Both cases involved an aging parent gratuitously depositing funds into a joint account opened with one of several adult children. The principles set out by the Supreme Court when dealing with this type of situation can be summarized as follows: 1. The presumption of resulting trust applies in cases of a gratuitous transfer of property from a parent to an adult child. This shifts the onus to that child of establishing on a balance of probabilities that the parent intended to gift the right of survivorship to whatever assets are left in the account to the survivor. Where there is insufficient evidence to rebut the presumption, the assets will be treated as part of the parent’s estate to be distributed according to the parent’s Will. 2. Some of the evidence which may be considered by the court in determining the intention of the parent includes:  evidence of the relationship between the parent and the child holding the account;  wording in bank documents that suggests the parent’s intention as to the beneficial interest in the account;  control and use of the funds in the account;  granting of a power of attorney; and  tax treatment of joint accounts. Background Joint accounts with right of survivorship (hereinafter referred to simply as joint accounts) are used by many Canadians for a variety of purposes, including estate planning and financial management. An elderly parent may often use a joint account to transfer assets on death outside of the estate to minimize potential probate tax payable and to simplify the administration of the estate. The parent may also use a joint account to allow a child to help him or her with the day-to-day management of the account
The varying intentions of the parent in setting up the joint account can lead to confusion among family members after the parent has passed away. Did the parent intend to gift the beneficial interest in the joint account to the child whose name is on the joint accounts? Or was it the parent’s intention for the child to hold the assets in the joint accounts in trust for the benefit of the parent’s estate to be distributed according to parent’s Will? The difficulty here is that the parent is no longer around to state his or her intentions. It is often left up to the courts to determine the parent’s intention after the fact. Two such cases were heard by the Supreme Court of Canada and the Court’s decisions were released on May 3, 2007. A brief background of each case is provided below:

Joint ownership of bank accounts and investment accounts

When it comes to bank accounts and investment accounts, some couples prefer joint ownership while others are strict about maintaining separate accounts.

Joint ownership with your spouse

There are pros and cons to joint ownership of bank accounts and investment accounts with your spouse.

There are some benefits to having your spouse as a joint owner like:

• No income tax payable upon your death
• Not part of your estate – no probate process or probate fees
• No delay in your spouse’s access to these funds.

On the other hand, the disadvantages of joint ownership are:

• Funds available to your spouse’s creditors
• Cash may not be available to pay your taxes and other debts after death thereby forcing your executor to sell other assets
• Funds not available for distribution to other beneficiaries
• Needs careful record-keeping for income tax purposes during your lifetime.

For estate planning purposes, most spouses should have joint accounts unless the disadvantages pose real problems in their particular circumstances.

Joint ownership with a child or other person

There are often reasons why a lone surviving parent might want to have a joint account with an adult child:

• So the child can pay the parent’s bills
• So the child can manage the money (e.g. reinvesting expired GICs).
• To leave the remaining money to the child after the parent’s death.
• To avoid probate process and probate tax on the account.

Despite these reasons, putting a bank account or investment account into joint ownership with anyone other than your spouse is typically NOT recommended.  There are a number of reasons for this:

• Funds are immediately available to this other person’s creditors (including in a divorce)
• Funds may not be available to pay your debts after death
• Funds not available to your other beneficiaries
• Careful record-keeping is required for income tax purposes during your lifetime
• Many family fights have occurred over joint accounts.

Generally speaking, the disadvantages of joint ownership with children are greater than the benefits.  Be very cautious about putting children as joint owners of your bank and investment accounts.

If you need the regular assistance of your child for bill payment and money management, there is a better way to give your child power over your accounts.  Simply go to the bank with your child and give your child signing authority over your account (rather than joint ownership).  Another alternative is to set up electronic banking and have your child help you do your regular banking from the comfort of your own home.

If you were considering making an account into a joint account with a child so that the child would receive the funds after your death, then you can achieve the same result with a clause in your Will that gives the account to the child.  Even though this may subject the account to probate tax and the probate process, it is cheaper than having your family litigate whether your child is entitled to the account.

Cautionary Tale:  Fighting all the way to the Supreme Court of Canada

Surviving family members fighting over joint bank accounts left by a deceased parent has been such a problem that the Supreme Court of Canada had to address the issue three times in 2007.

In these cases, three different Ontario families had the same problem.  An elderly parent had a bank account that was made into a joint account with an adult child.  After the parent died, another family member challenged the adult child’s right to keep everything in the joint account.  In two of the cases, the challenging family members were siblings of the adult child, and in one case, the challenge came from the ex-husband of the adult child.

Even though it might be obvious to many people that the purpose of a joint account is to allow the surviving account holder to receive full ownership of the account, the Supreme Court of Canada disagrees.  As it stands now, the law in Canada is that an adult child does not automatically gain full rights to a joint account after a parent dies.

Instead, the surviving child must prove that it was the parent’s intention to give the adult child full rights to the joint account after the parent’s death.  Precisely what evidence is sufficient under what particular circumstances was not exhaustively decided by the Supreme Court of Canada.

With this continuing uncertainty, why risk causing a family fight over this issue?  Avoid joint accounts with your children and it will never happen.

Joint Accounts: Appropriate Use of Joint Accounts

As part of the estate planning process, in some provinces, some financial or legal advisors may encourage their clients to establish joint accounts with their heirs as an estate planning tool to avoid probate fees or the process itself.

Under certain provincial laws, there may be some benefits to this strategy although they are often outweighed by the risks described below. If you request in person (not through a Power of Attorney – see Opening a Bank Account with a Power of Attorney), that a joint account be opened and your bank has no reason to think that you are not capable of making this decision, they will usually open the joint account.

Be aware of the potential for abuse /conflict with a joint account

If you open or make existing accounts joint with a family member or caregiver to make it easier for that person to assist with paying bills, etc., or for estate planning purposes to avoid probate fees, you make that person a co-owner of the funds in the account. This arrangement may be harmless if the other person is trustworthy and follows your wishes. But, if not, an abuser can take over the funds in a joint account and use them for their own benefit, not yours.

You should also consider that, if the joint account holder is sued or has a previous legal judgment or garnishment order against them or is engaged in a family law proceeding, your funds may be considered part of their assets and could be at risk. Conflict can arise if you or your Attorney do not agree with how that person is operating the joint account. On your death, further conflict can arise in your estate administration if the joint owner claims the funds in the joint account as their own, contrary to the distribution set out in your Will.

A safer alternative to a joint account is a Power of Attorney, which allows the Attorney to help with financial transactions without transferring ownership of the funds to the Attorney.

Or, if the purpose of the account is for the other joint account holder to assist you with paying household bills, a joint account for that purpose could be established, but you could set up a bank transfer from another account where only the funds necessary for household bills would be transferred and accessible to the joint account holder. Keep in mind, however, that if you give a POA to the same person who is joint on the account, the Attorney may be able to move funds from your other account to the joint account, potentially creating the risks mentioned above.

This text only provides general information and does not constitute a legal opinion. Since the POA rules vary between provinces, the CBA strongly encourages you to seek advice from a legal expert before making any decision in these matters.

Joint accounts: What does it really mean?

Joint accounts

A joint account offers the same features and benefits as a personal chequing or savings account in one name only, but allows two or more people to make withdrawals, deposits, payments and other transactions from the same account.

Managing a joint account

It is a good idea to ask the financial institution what happens if one of the joint account holders dies and to make sure that the survivor will be able to access the funds without delay. If not, you may want to consider depositing your income into an individual account before transferring it to a joint account. 

Check with your financial institution to learn about their policies on joint accounts and how your joint account is managed.

Your responsibilities as a joint account holder

As a joint account holder, you share not only access to the account but you are also responsible for any transactions made by the other account holder. For example, if you have overdraft protection attached to this account, all account holders may be held responsible for repaying the debt.

 

Before you open a joint account, talk about it with the co-owner and make sure you both agree on how the account will be used.
 

Receiving information on joint accounts

Under a voluntary commitment, Canada’s banks have agreed to make information available to clients opening new personal bank accounts or converting an account that is held in one name to an account that is held jointly by more than one person. For more information, visit FCAC’s page on Joint Bank Accounts: Your rights and responsibilities​. 

Official Definition of ''Joint Account''

Bank account in the name of two or more individuals (account owners) who jointly (equally) share its concomitant rights and liabilities. Joint holders of an account are regarded in law as together making up the 'owner.' Any action against them (pertaining to that account) is made against jointly and not individually (severally). Two types of joint accounts are: (1) Joint-tenancy account (owned usually by a married couple) in which either owner may individually exercise full rights to make deposits or withdrawals on his or her signatures. In case of either owner's death, the survivor automatically takes the sole control of account assets without probate. (2) Tenants-in-common account (usually owned by two or more business partners or directors) in which signatures of all owners are required to exercise certain rights such as making withdrawals. In case of one or more owners' death the other owner(s) may take control of account assets only in accordance with the terms of agreement entered between them before such eventuality. A company account operated by two or more signatories as a means of accounting control or security is not a joint account in the legal sense. See also jointly and severally.

Exemples of ''Joint Account'' in a sentence PART2

That way personal spending is kept out of the joint expenditure account.I asked our experts if there is anything to be wary of with a joint account.

Source: I am moving in with my boyfriend but should we get a joint account? | This is Money

I'm not saying that's the way to go, just that it worked fine for us and not having a joint account of any kind didn't cause any problems or inconveniences.

Source: I am moving in with my boyfriend but should we get a joint account? | This is Money

Over the years the joint account got used more and more by both of us and we now pay our wages in there, and just transfer out the amount we each agree is for personal stuff.

Source: I am moving in with my boyfriend but should we get a joint account? | This is Money

Another alternative to a joint account is for your spouse to add you as an authorized user to any existing credit card accounts she or he already has established.

Source: New citizen tips for building good credit

Credit history, Authorized user or joint account holder Todd Ossenfort is the chief operating officer for Pioneer Credit Counseling in Rapid City, S.D.

Source: New citizen tips for building good credit

Let credit card companies know you've parted ways with your spouse and explain that you want joint accounts closed (or to have your ex removed as an authorized user).

Source: Don't let your ex trash your credit - - MSN Money

Since I cannot apply for a credit card myself, and I am not working yet, I've been told by my bank that I can get a "joint account" with my wife to get a credit card to start building credit history.

Source: New citizen tips for building good credit

- Doh , Reading, 29/3/2013 12:10 Click to rate Rating 2 Report abuse NO NO NO but you can keep your own separate accounts and open another joint account and ech of you pay into that a fixed amount each month to cover expenses .

Source: I am moving in with my boyfriend but should we get a joint account? | This is Money

Exemples of ''Joint Account'' in a sentence

Use joint account in a sentence

• You may want to open a joint account with someone you trust so that someone can always have access to it.
  Source: BusinessDictionary
• One of the perks of getting married to my wife is the ability for us to start a joint account for our checking needs, since now we can both direct deposit our paychecks right into the account, and both draw the funds when we need it.
  Source: BusinessDictionary
• My bonus was paid into the joint account last week and my wife already spent most of the money to pay bills.
  Source: BusinessDictionary
• We pay into the joint account for running the household.
  Source: I am moving in with my boyfriend but should we get a joint account? | This is Money
• Joint accounts can create problems long after a marriage is over.
  Source: The 11 Most Commonly Asked Credit Questions - Yahoo! Finance
• If you hold any joint accounts at the same credit union, up to $250,000 of each account holder's share is covered.
  Source: Money Power: Most credit union accounts covered by deposit insurance | Tulsa World
• With a joint account, you will be equally responsible for the payment of the account along with your wife.
  Source: New citizen tips for building good credit
• - RobertBurns , Aberdeen, 25/3/2013 15:52 Click to rate Rating 7 Report abuse we have seperate accounts plus a joint account.
  Source: I am moving in with my boyfriend but should we get a joint account? | This is Money
• It would be nice to set up a joint account for paying household bills but I am aware that this might come with pitfalls.
  Source: I am moving in with my boyfriend but should we get a joint account? | This is Money
• Facebook allows you to set up a joint account, but making it work as a marketing tool depends on your own team coordination.
  Source: Having a Joint Facebook | Business & Entrepreneurship - azcentral.com
• Most likely, it could be that a creditor reported that one of the two joint account holders has passed away, but its the wrong person.
  Source: Betty Lin-Fisher: What to do with accounts when a spouse dies - Business - Ohio
• She had previously asked her husband to pay the bills using money from the joint account she shared with her mother, and gave him her PIN.
  Source: Former Woodlands coach in court
• He transferred a total of $2.3 million from the company's bank account into his personal account, joint account and to his wife's account.
  Source: Pathological gambler jailed 7 years for forgery involving $2.3m
• If you added the authorized user, you can revoke it, but you generally can't kick someone off a joint account.Contact your creditors.
  Source: Don't let your ex trash your credit - - MSN Money
• - tommy , Denbigh, 27/3/2013 21:38 Click to rate Rating 4 Report abuse We never got round to having a joint account - I don't think we even got round to discussing it.
  Source: I am moving in with my boyfriend but should we get a joint account? | This is Money

Risks of joint bank accounts

Most consumers sock away cash into bank accounts -- checking, savings, certificates of deposit -- to maintain liquidity. But opening a joint bank account, whether with family members or business associates, has potential pitfalls even as it offers convenience.

While pooling your money may imply love or trust, the ramifications of joint accounts can elude both parties. Here's what you need to know.

Rights of ownership

Drama most often crops up during marital discord, but the same drawbacks apply to joint banks accounts held by:

• Minor children and parents.
• Elderly parents and adult children.
• Cohabitating couples.
• Roommates.
• Business partners.

"You can have a joint account with anyone in the world, but once we're jointly on that bank account, once we sign the papers, both of us have 100 percent rights to that account," says Sandra M. Radna, a family attorney with Radna & Androsiglio in New York.

No matter who started the account or who put in more money, she says, "In the eyes of the law, you're equal holders."

Account co-owners enjoy the right to spend, give away or transfer funds to other accounts, without the consent or knowledge of other account holder(s). In many cases, the "wronged" party can get back some of the money, but legal action is required.

"There is no protection for either party with a joint account," says Brent Adams, senior vice president at Private Bank of Buckhead in Atlanta. "There is nothing (the bank) can do to protect either party if the other person comes in and withdraws all the money."

Rights of survivorship

In addition, most joint accounts carry rights of survivorship. "So, if one of the joint holders dies, there is nothing the surviving joint owner has to do to get that money," says Radna.

That can be an upside, but there may be unexpected consequences. Mahlia Lindquist, an estate lawyer in Boulder, Colo., says, "You may unintentionally subject your assets to the claims of someone else's creditors, disrupt your estate plan and trigger higher taxes."

In many cases involving families, the added co-owner of the account upholds wishes for financial sharing upon the other's death. However, when you give money outside the normal estate settling process, "gift" taxes can come into play.

Risk of tax triggers

If someone other than a spouse is co-owner of a bank account while all parties remain alive, additional tax issues may arise.

"When you put money into an account, it isn't necessarily a gift, but if that person takes money out of the account in excess of the $13,000-a-year limit, then that would be treated as a gift, and you might have a gift tax filing requirement," says Benjamin C. Sullivan, an associate with Palisades Hudson Financial Group, in Scarsdale, N.Y.

What happens to funds in the Joint Account if one of the accountholders dies?

This will depend on the terms that govern the account and the direction provided by the accountholders to us at the time the Joint Account is opened. In some cases, the Joint Account may have a right of survivorship which allows TD Canada Trust to pay the account balance directly to the surviving joint accountholder(s).

Note: In Québec, a joint account is frozen upon the death of one of the joint account holders. Talk to us about how this works.

If one accountholder dies and the account has been designated by the accountholders in our records as having a right of survivorship, we are entitled to pay the funds to the surviving accountholder(s).

We are, however, not in a position to determine whether the surviving accountholder(s) may keep the funds as their own or whether they should be distributed in accordance with the deceased's will or provincial laws governing estate matters. In some cases, legal ownership of the funds could be challenged by others who may think they have an interest in the account such as beneficiaries of the deceased's estate. A surviving joint accountholder may have to demonstrate that the deceased accountholder intended the remaining funds be a gift to the joint account holder. This could potentially lead to delays in the surviving accountholder being able to access funds in the account.

Consider whether you would benefit from making pre-authorized automatic payments to service providers and arrange with them and us to set up these payments from your bank account.

If you need additional assistance, consider whether a power of attorney is right for you. For more information on powers of attorney, please see the following link: td.com/to-our-customers/power-of-attorney.jsp

Understanding Joint Bank Accounts

At TD Canada Trust, our personal deposit accounts may be set up in the names of two or more individuals. These are referred to as “Joint Accounts”. When a Joint Account is set up with us, the accountholders must decide whether their joint consent is required to withdraw funds or otherwise transact or provide instructions in respect of the account or whether either of them may do this on their own.

Joint accounts can help you pay household bills or manage other shared expenses with a spouse or family member, especially if you have health or mobility issues that make it more difficult for you to manage your personal banking on your own. In addition, a parent may consider setting up a joint account with a family member, such as an adult child, if they are planning to be out of the country traveling or vacationing for an extended period or following the death of a spouse who typically handled the household finances.

Unless you set up the Joint Account to require all accountholders to instruct us or transact on the account jointly, any accountholder may transact without your consent. Transactions include deposits, withdrawals, transfers and account closure. This means that:

• You will be responsible for all transactions initiated by the other accountholder(s) just as though you made the transactions yourself.
• Other accountholder(s) generally have the right to withdraw some or all of the funds in the Joint Account at any time regardless of who deposited the funds into the account.
• You may be exposed to financial problems of another accountholder where the accountholder has unpaid debts and a creditor seeks to recover amounts it is owed by seizing the funds in the Joint Account.
• You are responsible for any transactions that result in an overdraft in your Joint Account even where caused by the other accountholder(s). For example, a cheque deposited to the Joint Account by another accountholder may be returned due to insufficient funds (“NSF”). If payments were made out of the Joint Account in reliance on that NSF deposit, the Joint Account may be put into an overdraft position and you will be responsible for all related interest and fees owed to us.

Transaction Accounts

Sometimes a temporary joint account is opened by two parties entering into a transaction where one party needs a security for the fulfilment of the transaction and the other party has to pay the sum (deposit), being the security for the other party. Any payment from the joint account, or return of the deposit from the joint account, will only be possible if both parties sign a joint written instruction to the bank. It is not possible that only one of the parties gives instruction for payments of the joint account.

Because (European) banks are not very interested in opening temporary joint accounts, as they are normally used for one transaction only, there are specialised parties or companies taking care of such accounts as trustees. A temporary joint account is normally closed after the transaction for which it was opened has been concluded. Temporary joint accounts are used in transactions in which large sums of money are involved as an alternative to letters of credit or escrow accounts.

Survivorship Accounts vs. Convenience Accounts

In the United States, there are typically two types of joint accounts - survivorship accounts and convenience accounts. Either joint owner of the account may withdraw funds during the lifetime of both owners, and most states have statutes protecting the bank from claims brought by one joint owner against the bank if the other owner "wrongfully" withdraws funds from the joint account. The distinction between survivorship and convenience accounts matters at the death of one of the owners. If the joint account is a survivorship account, the ownership of the account goes to the surviving joint account holder. Joint survivorship accounts are often created in order to avoid probate.^[1] If two individuals open a joint account and one of them dies, the other person is entitled to the remaining balance and liable for the debt of that account.

If the account is a convenience account, if the person who placed the funds originally in the account dies, the joint owner does not become the owner of the account. Instead, the account becomes a probate asset of the deceased person. If the joint holder passes who was simply put on the account for "convenience" purposes, the original owner of the account continues to own the account, unaffected by the death of the convenience account holder.

How to tell whether the account is a survivorship account or a convenience account will depend on the bank's account opening forms. The form will typically include a choice for designating the account as a joint account with right of survivorship ("JTWROS") or a joint account for convenience purposes.

A special type of joint account with right of survivorship, called a tenancy by the entireties account, is used for survivorship accounts between spouses. This special type of tenancy by the entireties account will typically offer the account holders protection from creditors under applicable state law.

Joint accounts: Only cons

We’ve chosen not to go the route of 64% of couples.

 9

Every week, I get dozens of press releases from media professionals across the country looking to have their story featured on MoneySense.ca. Some are about new products, others are about upcoming events but the vast majority are findings from some survey or other. I pay most attention to the ones that cast the spotlight on some piece of information that you, dear reader, may find helpful on your personal journey to financial independence. This week however a press release on the topic of love and money caught my eye and entirely for selfish reasons: I’m getting hitched in 6 weeks.

TD Canada Trust surveyed adults in committed relationships and found 79% of Canadian couples have joint finances; no surprise there. But here’s where it gets interesting, well for me anyway. The top three personal finance products that Canadians combine with their partner are a joint bank account (64%), a mortgage (60%) and a joint credit card (50%), the bank found. Looks like my husband-to-be and I are taking the road less travelled.

Sure, I’ll be adopting a portion of the mortgage on Michael’s (and soon our) home. But unlike the majority of respondents to the TD poll, we recently made the decision not to open a joint bank account to pay for household expenses like groceries and utilities since neither of us is comfortable closing our existing accounts in favour of a single joint account. After discussing the logistics and monthly fees involved in transferring money from two individual accounts into a third account, we came to the conclusion that it just wouldn’t pay.

Instead, we thought, why not open a joint credit card to pay for all shared expenses? It’s convenient and reduces transaction costs. It also allows us to adjust our individual contributions from month-to-month. We suspect it’ll take a few months for us to determine exactly how much I’ll be contributing to the monthly bills anyway. You see, Michael is used to carrying the cost of the house on his own while I’ve grown accustomed to aggressively saving and budgeting for the odd luxury item (oh the spoils of living at home). We’re both looking forward to this new financial chapter of our lives and realizing our goals together. Ideally, we’d like to accelerate our mortgage payments but not at the expense of my retirement savings for instance. Realistically, we’re not going to achieve the perfect balance right off the bat. Paying the bills from a joint credit card will allow us to track our monthly expenses and test various splits as we go.

Of course this strategy means we’ll have to be extra diligent about paying off our bill to avoid costly interest fees, but neither of us carry a monthly balance on our credit cards so it really doesn’t require a change in habits. And we’ll be able to earn cash-back by paying with a reward credit card which should in theory help us reduce our monthly bills.

Meanwhile, I’ll transfer my share of the mortgage to Michael in lump sums and he’ll continue to pay the mortgage from his existing account. From our perspective it’s a very cost-conscious approach. But we’re clearly not in the majority here so I figured I’d consult TD’s Janice Farrell Jones for a second opinion.

“I wouldn’t say that there’s necessarily any real flaw in your strategy,” she said. “It is a good place to start with one product first, learn about each other that way and go from there.”

Jones also stressed the importance of clearly defining what our joint credit card should be used for. “What are you looking to spend on and do you have the same views on spending habits. Would you treat (the card) the same way?”

If there’s anything the study shows is that there’s no one-size-fits-all approach and we’re on the right track, Jones said, adding that a financial plan is key regardless of how we decide to combine our finances.

“A financial plan is really what’s helping you toward those long-term goals. If you are in a long-term, committed relationship, that’s likely what’s going to matter most down the road,” she said. The TD study found only 36% of Canadian couples have a common financial plan.