Questions seems strange, in my marriage all our money is jointly owned, we don't divvy up a ratio for each separately owned account, all the money is OURS..
We don't consider a "fair ratio each person should pay".

A marriage is 50/50.

But the dynamics of a marriage might not be 50/50.

If the az in your name is Arizona, you're in a community property state.

For what I say next, I'm assuming Arizona is similar to California. Even when one spouse works and the other doesn't, all income is considered as owned 50-50 in any event and so expenses paid from that income are considered as having been borne 50-50. If the gross income earned has a ratio of 55/45, the share that's yours is half of his 55 and half of your 45. That equals 50%.

Are the assets pre-marriage or separate property gifts? Anything accumulated during marriage would similarly be community property, no matter if in one name and not two.

Sushipup, I'm scratching my head about your comment. You might want to say that marriage is a partnership where things are shared, but to say 50/50 broadly just rings wrong to me. Each partner doesn't do half of each work task nor should feel like they need to individually consume or account for half of spending.

Count me in for the confusion over trying to keep finances separate in a marriage. You're not roommates.

If there's a large discrepancy in your incomes, would the higher earner go on lavish trips and buy expensive cars while the lower earner scrimps and saves to put gas in their old run-down car?
If one gets laid off and stays home for a while, would the other person pay them for the extra chores they do around the house?

The only "fair" split in a marriage would be one that both parties mutually agree on and are happy with no matter how much money each person earns or how much free time each person has to do household chores or how much each person spends. You have to look at the whole relationship, not just the numbers. And it can be a constantly shifting dynamic.

Like all of you, I too agree whole heartily that marriage is OURS; after the marriage, assets and debts should be jointed and shared. I thought I am old fashion (old age for sure), it is a pleasure to hear from like minded folks here.

How about treat this as a mathematics question? if have to derive a ratio from the scenario, what is a fair ratio?

My bride and I have been married for 42 years. And from day one we had ONE bank account.
There has never been a case of "your" money and "my" money. Everything always has gone into that one account.
We never had her car and my car, it was our cars. All our possessions are ours. Ok, the dog likes her more, but I can live with that.

How about treat this as a mathematics question? if have to derive a ratio from the scenario, what is a fair ratio?

So then we should treat this as a temporary roommate situation and not a marriage. Then the living expenses should be split 50/50.

I have friends who are happily married, but have separate checking accounts. apparently when they were first married, he had no money management skills - not a lot of debt, but no credit rating. Their house is in her name.

I don't know how they split household expenses, but I know they each pay for their own vehicles and vacation expenses. We talked about this recently, as they are the only married couple I know who don't pool their incomes.

She said it would be different if they had children - it would be much more difficult to split things up. Their system works for them, but it's completely by mutual assent - which is WHY it works.

In my marriage (of 27 years), what's mine is ours and what's his is ours. At various times, each of us has been primary breadwinner, but that didn't change how we each looked at money. Neither makes a major purchase without consulting the other.

In both of my marriages the money was ours and I didn't earn anything except from 2 or 3 part time jobs over the years. I think doing "mine and yours" is a matter of trust and security. I wouldn't marry anyone I didn't trust to handle money.

Thank you for the inputs.

Every marriage is different, each person faces different circumstance. Things may change in the future....If the couple who asked this question are OK with paying expense according to a ratio at this point of time, I want to help out in deciding the ratio.

Snidely, You brought up an interesting point. In community property states, it really does not matter what ratio they use to pay now if the couple ultimately get divorce in the future. But what would be a fair ratio to use at this point of time while they are being married?

My calculation is 61(H) and 39(W) based on the 1099 income and asset size, does this sound right?

Signing a marriage license is the same as signing a contract. You are responsible for each other financially no matter how you have it set up. Regarding debts, care home and catastrophic health care both are held responsible for the debts. I know a lady that married for the second time and then had to pay her new husband's bankruptcy debts or her credit would be ruined. I think it is better to live together and always refer to each other as friends and always introduce each other by their names. Otherwise a court may decide you are married by common law and you pay anyway. This was all told to me by an estate attorney. This is not a common law state.

Emma, she's in a community property state. Debt is almost always shared no matter if in one or both names.

In separate property states (about 41 of the 50), it doesn't always work as you explain, especially not for debts covering personal matters of one spouse not affecting the other.

For anyone who has a concern or a need for clarification in their own situation, please speak to a lawyer.

The information I gave is accurate for my state, he was an estate lawyer. Both are responsible. Even my inheritance had to be added into the assets when my husband went to a care home. When I told my sister about our inheritance, she was very upset and saw her own lawyer, same information. I know the lady that paid off her husbands debts after they married. It took most of her savings. I am sure she saw a lawyer regarding that matter she is not a stupid woman, except for not doing a background check on her husband. I will ask her next time I see her.

never mind

This post was edited by sushipup on Thu, Sep 25, 14 at 22:11

I've lived in a lot of states and never knew the "fair ratio" of marriage in them. My own ratio for the "How about treat this as a mathematics question?"

is What's mine is yours and what's yours is mine and if we find we need to calculate our fair ratio then we'll need to get some legal advice, and I'd rather figure it out between us than pay some lawyer.

My own spouse can have it all if needed. We don't measure fair ratio in our marriage though. I would expect a split to be just that - fair. Good luck Arizona,

I don't understand "bankruptcy debts".
Bankruptcy eliminates all unsecured debts. In some states it even eliminates 2nd mortgages.

Every marriage is different, each person faces different circumstance.
Which is exactly why there is no answer to your question. What is fair for one couple may be seen as unfair to another couple.
The only way to look at this situation as a purely math question is to remove the "life partnership" aspect of the equation.
Get a prenup (or a postnup if they are already married) and specify that all assets owned or earned by each person is separate. Split all shared costs equally.

But since that answer isn't what you want ... and finances MUST be kept separate ... I'll give my own personal viewpoint (that is actually irrelevant since I'm not part of the couple)
My calculation is 61(H) and 39(W) based on the 1099 income and asset size, does this sound right?
To me, that seems like you are skewing the ratio in the wrong direction. The husband is bringing twice the assets into the relationship than the wife. So the wife should pay more of the daily costs in order to make up for that since if they break up, she'll get half of 'his' assets.

Bankruptcy eliminates all unsecured debts.

Aren't many student loans unsecured debt? I thought some types of student loans are difficult to have eliminated through bankruptcy.

It does not eliminate all debts not here anyway. I know the woman this happened to.

This post was edited by EmmaR on Fri, Sep 26, 14 at 20:43

Greg_2010, interesting point.

Yet your calculation requires an assumption that the money brings into marriage has to be kept as community property.

Many couples keep all or a part of pre-marital property as separate property. If they break up, only community property gets divided.

One more scenario, if a spouse has $1 million asset without a job, the other one has no asset, but has annual income of $100K. How the household expense should be paid?

I am not looking for any answer "I want to hear"...really, it does not matter to me... Any input is good.

Student loans are not included in bankruptcy. Nor are taxes.
Of course each state has different laws as what you can keep and what you must liquidate as far as your home, cars, possessions, etc.

"...One more scenario, if a spouse has $1 million asset without a job, the other one has no asset, but has annual income of $100K. How the household expense should be paid?..."

Simple. They're married. The assets of one are the assets of the other, and the 100K is the household money.

Much of the division on community property depends on state law and alas the judge.

We before marriage decided that both of us should have an account that we could spend freely from. The rest is deposited in joint accounts. We both have transfer on death on the accounts that are not held jointly. In marriage there is really no fair division unless you have already decided to split.

One more scenario, if a spouse has $1 million asset without a job, the other one has no asset, but has annual income of $100K. How the household expense should be paid?

Either combine everything and everything becomes 'theirs' or live as room mates and keep everything separate. Anything else is negotiated between the couple.

Otherwise ... in my opinion:
If the assets become community property, then I think the person with the job should pay more (the amount to be decided by the couple). If the assets stay separate, then split the expenses evenly.

Just out of curiosity ... this question is obviously not about your own marriage ... why are you involved at all?

This post was edited by greg_2010 on Mon, Sep 29, 14 at 9:10

If you are trying to figure out a fair way to divide household expenses how about this: compile a list of total household expenses, he pays 55%, she pays 45%, it's simple math. I'm assuming the "assets" your refer to were acquired prior to the marriage? For people to assume, anymore, that all earned income goes into the same pot isn't always realistic, particularly when there are children/expenses from a previous marriage and assets acquired prior to this marriage. What if one spouse has 2 children, the other spouse has 3, are the assets split in 1/2 (1/2 to his kids, 1/2 to her kids) or are they split in 1/5ths? These things aren't so clear cut all anymore.

Sorry but this question seems ridiculous. In a 2nd marriage myself with a child involved I could see how you would want to protect pre marital assets in the event of a divorce and in light of the fact that a child(ren) were not from the current marriage and need to be taken care of should a divorce occur. So seperate pre marital assets is one thing. But. dividing current income or living expenses seems absurd to me! You are married! This is not a roommate situation!

Bankruptcy laws are FEDERAL LAWS not state laws. The rules are the same in EACH state...with certain exceptions such as homestead laws.

/tricia

My husband and I have a setup similar to what you describe. He makes more than I do, so he puts a bit more into our joint account each month that we use to pay for all communal expenses (including vacations, cars, gas, etc.). The remainder goes into separate accounts that we get to spend as we like. I donâÂÂt feel like consulting him every time I want to buy myself something frivolous, same goes for him. If the concept bothers you, why not think of it in the converse, in that we each get an âÂÂallowanceâ out of our paychecks to do with as we choose. Personally I donâÂÂt really think it would be fair to include investments in the calculation, or at least we consider all assets, investments, retirement accounts, the like, to be shared equally. We use strictly take-home pay only in our calculation, so that 401(k) contributions, healthplan costs, etc. do not enter into the equation. This does not mean that we are roommates who go dutch every time we eat out. ItâÂÂs just the method we have chosen for keeping our joint account supplied with money.

In our second marriage we combined everything....it was ours, except for our hobbies. My hobby turned into some income, his cost a great deal of money, but got it back when he sold his Cushmans. Neither my husband or I would have had it any other way. The only reason we had our separate hobby money was because he wanted to keep track of what he spent. It was just hobbies and when sold went into our savings. Why get married if each of you are working for different goals. Being together and secure was our goal. We were together 33 years before he died.

With regard to 61 and 39 ... as contrasted to 60 and 40 ... or 70 and 30 ... or 89 and 11 ... having no knowledge of the couple or their situation or circumstances, I wouldn't be able to offer a smidgeon of suggestion - that would have any real bearing on the situation, I feel.

I don't recall having been consulted in any similar circumstance when I worked as a personal financial advisor, and would have wanted to have had a long, drawn out discussion regarding various scenarios, with them together, possibly with each separately, before offering even any suggestions, let alone recommendations. "Suggestions" would have been offered along the road related largely to "what if"s, I think.

I recall at this point having a discussion on the Kitchen Table some time ago regarding one of my major tasks as a parent being to help my child prepare him/herself for independence, a few steps at a time, with the parent helping the child consider various scenarios regarding various actions which they were considering as they grew.

Whatever this couple chooses .. they need to negotiate to come as close to congruency in their agreement with regard to how it should be done as possible ... may I suggest that the future of their marriage might well depend on their being a very small difference between them with regard to what's fair.

Major differences will result in a feeling of unfairness, of injustice, that'll fester under the skin for some time, and sooner or later break out, quite likely with major consequences.

ole joyful

Triciae, I just read your post about bankruptcy being a federal item. Yes it is done in Federal Court, but each state does indeed have different parameters.

In some states like NJ you lose your home and all the equity goes to the creditors. Here in VT you can keep as much as $125,000 in equity. Example: If you own a $150,000 house, and you owe $75,000 you have $75,000 in equity which is under the VT threshold.
Same with a car. a Couple can have as much as $5,000 in total equity on two cars.

However, in other states, if you have a 2nd mortgage, that debt could be eliminated through bankruptcy, but in Vermont it isn't.

I think you need to separate legal issues from how a couple manages their day-to-day joint finances. I believe the original question pertained to the latter issue. I think it makes perfect sense for a couple to manage their finances in a way that works for them, even if the method they use would be irrelevant in the event of a divorce or bankruptcy.

Many of my friends who married early in life put all of their money in joint accounts. This generally leads to certain rules they establish about spending allowances, how much can be spent without getting the other's approval, etc.

Other situations (large asset imbalances between spouses, needing to protect children from previous marriages, etc.) may require various legal arrangements, and it's usually necessary for the management of finances to follow these arrangements.

Finally, in many situations it makes sense for a couple to manage their finances in a way that works for them, even if it would have no bearing in a legal proceeding.

My wife and I have joint accounts and credit cards, but we also have our own separate accounts. Even though my wife is very frugal, it would drive me crazy seeing every pair of shoes she buys on our credit card statements. And it would drive her crazy knowing I was looking at her purchases. It's much easier contributing a percentage of our incomes to a joint account to pay for our joint living expenses and managing our personal expenses from our own accounts.

Going back to the original question, I don't think the assets that either spouse has is particularly relevant, unless they are using those assets to meet their living expenses. If they are living off of their income, then I think expenses should be split based on their respective incomes.

The law here in Kansas has changed since my step daughter filed, she told me she could keep a home and one car. If you had a million dollar home paid for you might not get to keep it. Also the new law said you can still owe money after the bankruptcy is filed and done.

My niece lived in ark and had charged a computer on her credit card. When she filed for bankruptcy the courts wanted the computer and when she said no, they said it is the computer or your home. Being who she is she kept the pc and is now living off of her family.