3 March 2014

Should I ... Jointly Own Assets with my Spouse?

Married couples often own assets jointly. That could include the family home, savings and investments. There are certainly advantages in doing this - it keeps it simple when one spouse dies, for example. But it isn't always the best approach.

First of all some assets just can't be held jointly. ISAs and pensions are good examples.

One advantage of holding assets separately is that it allows you to take advantage of different tax situations. If one spouse is a non-taxpayer, for example, then a better tax outcome might be achieved by that person owning assets which are being sold. And since it is often straightforward to pass ownership between spouses there is potential for savings by shifting the ownership just before the sale.

However, problems can arise with joint ownership - for example, if either spouse has been married before. Generally you would want your children (from the first marriage) to inherit some of your assets on death, rather than everything going to your new spouse who might then expect to pass everything to THEIR children on their death leaving your children without anything.

So it may best to keep pre-owned assets under individual ownership in those circumstances. At the very least it needs some serious planning to avoid some bad feeling (or even legal action) between families in due course.

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