If you don’t trust your spouse, stop reading. Ah, did I just detect a slight hesitation? Careful.
Marriages are not just to share joint custody of the dog, buy bulk at Costco or spoon in January. This is serious. It involves money. Successful couples are almost always economic units, sharing assets, debts, budgets plus retirement, investment and tax strategies. It’s always a surprise how many young hooked-up people I talk to whose intimacy stops when it comes to a joint chequing account. He has his money. She has hers. They actually don’t know what assets and liabilities the other one has – and they never asked before getting hitched. Scary.
Now, would you buy a sexy semi without a home inspection? See what I mean?
Fusing with another person brings not only emotional benefits, but financial ones, too. The sooner new couples learn this, the better. Eight of ten divorces happen because of money – since lots of people think finances trump compromise. Maybe so. But you can also get over that by being transparent. And a joint account is a good place to start.
“You had indicated in a recent post about the need for a joint account between spouses,” writes Keith. “I figured the reason would be income splitting but a quick search seemed to dismiss that idea. It would be great if you could elaborate or explain any benefits on having a joint bank account.”
Well, Keith, a joint bank account does have some pluses – like lower bank fees, easier budgeting, accomplishing joint goals and nipping secret spending. But the real benefit probably comes with a joint investment account.
For most couples the best financial structure is a joint non-registered account (also called a ‘cash’ account), plus two individual TFSAs, two separate RRSPs and probably an RESP for the kids. All of these accounts should be managed in a holistic fashion – in other words, constituting a balanced, globally-diversified portfolio when they’re all lumped together. Also, assets should be moved around between spouses for tax efficiency. Put bonds into RRSPs (since they pay interest), with dividend-producing stuff in the non-registered account (to reap the tax benefit) and fast-growers in the TFSAs, for example.
If you and your squeeze maintain separate accounts, you probably have duplication, overlap, inefficiency, lack of balance and – without a doubt – you pay too much tax. No joy there.
There are two big advantages to a joint investment account. First, you pay less tax if the two of you are in differing tax brackets since half the gains made can be attributed to the less-taxed person. Second, if you croak then your spouse gets instant ownership of all assets. No legal costs. No delay. No probate. It’s the responsible thing to do, especially if you have kids.
To achieve this, ensure the joint account you open has “joint rights of survivorship”. If you check out early, your death won’t be a taxable event (which is normal, when all assets are deemed to have been sold and tax is payable on the gains), but everything in the account simply carries on as the property of the surviving spouse.
Of course, income-splitting can be accomplished in other ways, too. For example the higher-income earner can pay family expenses while the less-taxed spouse devotes all of his or her income to investing – with gains taxed at a lower rate. Or the person making more dough can stop contributing to an RRSP and divert the money to a spousal plan. That way the contributions are still deducted from the bigger income, but the money (after three years) becomes the property of the other spouse, cashable at a lower rate. Voila. Less for Justin.
So why would you not have a joint investment account?
Some people think the CRA meanies will squish the tax advantage by insisting the source of the funds be traced back to the contributing spouse, and taxed accordingly. Of course, that’s impractical in any marriage that’s lasted longer than a week.
And then there’s the problem of marrying an evil person, since either spouse can remove money without consent, or give trading instructions to an advisor. A joint account can also be frozen or raided by creditors like the CRA if your hubby turns out to be a criminal, terrorist or Trump supporter. So watch that.
On balance, the benefits of integrating your finances outweigh the risks. Exactly. So, what’s love got to do with it?
114 comments ↓
I learned somethin’ new today, thank you Mr T.
Canada’s world famous loose mortgage lending standards (since 2000) and emergency rates (since 2009) have created extreme housing bubble conditions in cities from coast to coast.
Compare what Canadians in a cold, small Ontario community pay for a new house to what Americans pay for a new house with more bedrooms, more bathrooms, etc. in a massive California city.
Note that incomes in the two countries are approximately equal and that house prices were similar until 2006 (when Canada loosened lending standards even more).
More prudent lending standards in the US (after 2008) have prevented house prices there from completely bubbling over (compared to incomes) the way they have in Canada. For example, in most parts of the US, the minimum down payment is 20%. For a lot of buyers in Canada, it has been zero or almost zero (5%) for a long time.
Mortgage fraud was identified as a major contributor to the housing meltdown in the US. We have plenty of that in Canada.
History repeats itself with housing bubbles from all over the world. The loosening of lending standards and a lack of enforcement are common traits.
All houses:
– Min. 3 beds, 2 baths, 1,300 – 1,700 sq. ft.. (above ground, primary living space), basement unfinished (if one exists)
– Attached double garage
IN A MASSIVE CALIFORNIA WEST COAST CITY:
$427 K – San Diego, CA
– 3 beds, 3 baths, 1,662 sq. ft.
– new construction
IN A SMALL ONTARIO TOWN:
$376 K – Russell, ON
– ONLY 2 beds, ONLY 2 baths, LIKELY SIGNIFICANTLY SMALLER
– new construction
If Canada’s lax lending standards have pushed house prices this high in Russell, Ontario, imagine how high they’ve pushed prices in two of the most extreme bubble cities in the world – Victoria and Vancouver.
No bubble in history has had a happy ending.
$376 K – Russell, ON
If you don’t fully trust the person, why decide to marry? Risk on, yes, everything come with risk, even marriage, that’s why you need to evaluate it just like your investment strategy, know it full well before you sign on the dot and after.
When the investment goes down, hold it, not bail (divorce) unless is a fraud.. otherwise you are almost always coming out ahead in the end. Investment and Marriage sometimes work so alike.
Nowadays younger generation don’t know any better or just can’t/won’t take on the risk or work it out with a risk management strategy.
My advice to the young Men? Unless you want kids there is no reason to get married . Another one of my pards is finishing up a divorce . Just added 10 more years to how
Working life.
I do everything you suggested for joint accounts but decided to keep both our personal accounts so the little things that bother me aren’t seen like expensive coffee, e-transfer fees, online purchases, etc…
I know it’s still there. We don’t pay bank fees directly (when maintaining a 2K balance). Easier and cheaper to avoid conflict.
#147 Ronaldo on 12.19.16 at 1:58 pm
#114 NoName on 12.19.16 at 8:15 am
China consumed just over 50 percent of global coal in 2014,
https://goo.gl/Z0iARq
Is air quality in China a social problem?
https://goo.gl/WuKgR4
—————————————————————-
To give you an idea at just how much coal that represents here is something to think about. The world produces roughly 8 billion tonnes of coal annually. A 100 car coal train = 1 mile = 10,000 tonnes. 8,000,000,000/10,000 = 800,000 miles of train.
The circumference of the earth is around 24,900 miles.
800,000/24,900 = 32. Imagine that, a continuous train of coal circling the earth 32 times. Or, putting it another way. A train stretching past the moon by an additional 560,000 miles.
And that is every year.
Oh, Investors Friend, could you please check my math because I’m not that good at it and I know you are.
—-
Excellent way to describe amount of coal used every year.
WHat i would like to add is if 13.6 Million Ontarians are paying obscene amount of money for their hydro it will offset all that pollution , and bring world wide pollution in equilibrium, and we all know, best thing about equilibrium is that nothing changes… #sumF=0
One more interesting thing 3 billion world wide cook and heat using open fire or non efficient stoves.
https://goo.gl/IOJOPb
All bubbles end badly. Nobody on this blog or anywhere else has been able to provide one example to prove this wrong.
A housing bubble forms when gains in house prices exceed gains in incomes and rents over the same period of time by a big margin. Housing bubbles are also characterized by big increases in household debt (most of it mortgage debt), when real estate investment and construction activity increase dramatically as a percent of GDP, when the homeownership rate increases substantially, etc.
All of these things have happened in Canada and to a much more extreme degree than in the US.
Housing bubbles are not defined by their deflation. In other words, a housing bubble is a housing bubble before the major price correction takes place.
A real estate bubble is one example of an asset bubble. The dot-com and BRE-X bubbles are good examples of other asset bubbles. Of course these ended badly. The dot-com and BRE-X bubbles were recognized as bubbles before they imploded.
For years, international economists, housing experts, banks, rating agencies etc. have warned Canada about its housing bubble and the dangers it brings to our economy.
Canadians talked about the US housing bubble long before house prices there peaked just like Americans have talked about our bubble for some time.
Canadian economists, of course, deny the existence of a housing bubble in Canada just like American economists denied the existence of their bubble before things inevitably imploded.
Here’s what Alan Greenspan had to say about the American bubble:
“I have no particular regrets. The (US) housing bubble is not a reflection of what we did, as it is a global phenomenon.”
Housing bubbles can be maintained for some time with additional stimulus, delaying the inevitable. If house prices go sideways for some time, it doesn’t mean the bubble has evaporated. Some Canadian cities are good examples of this. Wolf Richter warns of the dangers of maintaining a housing bubble:
“Bubbles don’t land softly. They implode. It’s a brutal process. The longer bubbles are maintained, the more brutal their implosion.”
Time alone doesn’t make a bubble disappear. To make a bubble go away, several things have to happen: gains in incomes and rents would have to outstrip gains in house prices and close the gap, household debt would have to be reduced back to normal levels, etc.
There’s no example of a housing bubble anywhere in the world where incomes caught up to house prices to make the bubble disappear. The reason is that incomes rarely (if ever) increase as house prices fall during the deflation (falling price) cycle.
Incomes fell in the US as house prices declined. This happened in several other countries that had bubbles as well.
Rising prices stimulate the economy. This normally causes incomes to rise (although in Canada we’ve had income stagnation). Rising prices also increase consumer spending (the wealth effect) and job creation.
Falling prices damage the economy. Incomes fall, consumer spending falls dramatically and jobs are lost. (Two thirds of the Canadian economy is based on consumer spending.)
There’s simply no easy way out of a housing bubble. When a country allows a bubble to form, it must expect everything negative that comes with the downside of falling prices.
A safe, controlled, fairy tale happy ending is 100% impossible for Canada’s gasbag. Attempts will likely be made to prevent the bad ending that awaits us, but this will end in failure just like it did in Japan, Ireland, the US, Spain, etc.
what happens if your partner croaks and the house is all in his name? Is the principal residence still taxed in his name by CRA, or not?
Thank you…great info!
I think Freedom First will give this a pass.
He’s a rock star stud who doesnt “cohabitate”
Ponzi-esque?
Mon Dec 19, 2016 | 6:55pm EST
U.S. charges Platinum Partners execs with $1 billion fraud
The charges … highlight the brazenness and the breadth of the defendants’ lies and deceit,” Brooklyn U.S. Attorney Robert Capers told reporters.
Capers added that the case was one of the largest and “most brazen” investment frauds ever and Platinum was ultimately exposed to have “no more value than a tarnished piece of cheap metal.”
The U.S. Securities and Exchange Commission announced parallel charges Monday against the same executives and two Platinum entities for similar civil fraud charges.
http://www.reuters.com/article/us-platinumpartners-lawsuit-idUSKBN1481BI
Another very important consideration is joint ownership of vehicles. The following comment was from a lawyer.
“If the vehicle is owned “jointly” (both husband and wife are registered as owners, jointly), then the surviving spouse automatically is granted ownership as a right of survivorship. The registration still needs to be straightened out, but the vehicle does not form part of the estate of the deceased and there is, therefore, no need to wait for probate of the estate for the surviving spouse to do whatever they want with the vehicle.”
Chuming the waters for “Freedom First”? A nice gift to him and I’m looking forward to the diatribe.
A public service reminder to get your blog dogs spayed and neutered.
What is your advice to couples where one has all the assets? That was my situation when I got married. I’m a sucker for love and put my wife on all my accounts. Fortunately she still loves me.
Wow, what beautiful doggies…bet even Felix the Cat can’t come up with any suitable insults for those two.
The cable guy did our install for the telecom etc. Now the cable and phone rigs hire contractors to do the install but these independents do not get paid overtime so now I see where the younger generation gets their “dystopian” perspective on society.
Social media was supposed to enhance consumer’s power but looking at the latest national TV and on-line ads for Lincoln’s lease rates and calling the local dealer my car fever is now gone. The Lincoln ads show $750 rebate plus a winter rebate of $1,500 but both rebates are already in the advertised lease rates. Social media has turned the dealers into foxes and the customers into cute little rabbits. I bought my 2003 Ford Taurus back in 08 in Hamilton for under $3,000 and had to replace it recently…just goes to show ya buy used.
What’s with “Victoria Real estate Update”? Sounds like a bitter basement dweller who got left out of the housing market. The prices might level out, but they will never go back to 2009 levels and anyone who wasn’t on board missed the greatest wealth building opportunity of this generation.
Yes. Great Post today!
Yes. Everyone should take advantage of every legal tax & wealth growing advantageous strategies available. It is wise and prudent in every way.
Yes. I mean really, who would ever want to put themselves in a position to possibly be screwed over financially in any way.
Yes. 8 in 10 divorces are over money. Vast majority of divorces are initiated by women. The courts overwhelmingly back the women. Act accordingly.
#1
Freedom First
Master of Freedomonics.
IVANKA….MARLA……AND NOW MELANIA!!!!
Garth, what are you thinking??
Well Garth, as is often the case you have provided plenty to agree on whilst the same things are plenty to disagree on.
I’m personally opposed to the “joint checking account”. The reason? Accountability. Without accountability all is lost. Sure I agree with all the stuff about maximizing your investments and taking a holistic approach to the portfolio, but joint checking accounts? Say no people.
So, here is my argument.
A pivotal observation I made in my youth was when my dad cancelled my mom’s access to his funds. They had a joint account, but he also used that account to buy tools and materials (he was a “general contractor” ie. a handy man/construction dude). The situation came to a head when dad could no longer buy the tools and materials he needed to conduct his business because mom would see the money in the account and spend it all, before he was able to complete his contracts and then get paid at some later date you know a month later or up to 90 days. So what would happen is there would be some money in the account for living expenses and some money in the account for business expenses but my mom would spend it all. He had to separate the accounts and put her on a salary.
Then there is the whole divorce experience. Your advice, implicit in the post, is that if you combine finances divorce will be less likely. I’d like some stats on that. Divorce is seldom rational. It’s emotional. And what happens is that the first one who wants out secretly clears out all the joint accounts prior to the divorce actually happening. Yep, people are that bad. Your best friend and lover for years, but when she or he wants out they clean you out first. It can be a brazen as moving the money to a non-disclosed private account or as simple as buying a lot of new stuff like a BMW and wide screen TV that they want to have after the divorce. The only ways to stop it is to marry well or ring-fence your money. Since marrying well isn’t an option for most people in the modern era, you must ring-fence. Please remember people you don’t really know your spouse until you’ve been married for more than 10 years! You are wondering what happened to that guy who used to be fit and energetic and now is just fat and lazy? Well he lied. So did you. Now you both just let the laundry pile up in the hopes you can force the other person to finally load the machine because relations have gotten that bad.
A joint account for shared expenses is a fine idea, but with the divorce rate at 50% (so yes it can happen to you) you need some sort of insurance, but last I checked TD would insure my car but not my marriage.
Play safe folks. An extra percent isn’t worth losing it all. And you really don’t know your spouse. All she or he has to do is read some book or article and suddenly they want a divorce, and when they decide that’s what they want they see you as the enemy and will try and take everything they can. You must, at all times, make the divorce “pay-off” as small as you can to avoid providing an incentive. Even if it means a bit more taxes and a not totally ideal management of funds.
If you want your wife or husband to stay home, you have to ensure that the incentive to stay is greater than the incentive to leave. That means not letting “dirty Steve” steal your wife and through her your money. Plus 1% and tax avoidance be damned, dirty Steve is your bigger problem.
First but not last. Lot’s of learning to do… Hope 2017 is the year to make good changes.
And then there’s the problem of marrying an evil person, since either spouse can remove money without consent, or give trading instructions to an advisor. A joint account can also be frozen or raided by creditors like the CRA if your hubby turns out to be a criminal, terrorist or Trump supporter. So watch that.
……..
YUUGE TRUMP SUPPORTER HERE.
This is why you pay your account 10k a year to look after your various business, make sure you don’t screw up. Even does my gambling budget. That way you I can chirp Butts, T2, Wynee on Twitter all day long without worry.
My biggest fear in life is having a heart attack at Seneca. No insurance for Usa shit. But my credit card says I’m covered.
Yet to be tested.
“Solar power is becoming the world’s cheapest form of new electricity generation, data from Bloomberg New Energy Finance (BNEF) suggests.
According to Bloomberg’s analysis, the cost of solar power in China, India, Brazil and 55 other emerging market economies has dropped to about one third of its price in 2010. This means solar now pips wind as the cheapest form of renewable energy—but is also outperforming coal and gas.
In a note to clients this week, BNEF chairman Michael Liebreich said that solar power had entered “the era of undercutting” fossil fuels.”
http://fortune.com/2016/12/15/solar-electricity-energy-generation-cost-cheap/
Good news if you’re worried about global warming. Not so great if you are running a Middle Eastern state with surplus millions of aggressive young men who have few prospects of satisfactory employment. A bit queasy for the rest of us who worry how that aggression will be channeled.
Happily married for over a quarter of a century, due partially to full disclosure of our financial situation, prior to getting hitched. Life throws enough curveballs, why live with more stress than required.
I wonder what freedom first will have to say on this topic?
I just love a surprise!
. . . most difficult topic . . .
What about divorce Garth?
Keeping separate accounts is the easiest way to deal with separation or divorce (Which happens in 1/2 of marriages)
A prenup with a joint investment account is basically unenforceable because it’s an accounting nightmare to track every contribution down.
Paying a bit extra in taxes (unlikely to be a significant amount unless you’re rebalancing your portfolio very aggressively) is a reasonable price to pay.
Perhaps a case study run with 2 different variables would be ideal. (Variable 1: Joint account or separate, variable 2: marriage intact or divorce)
Your first sentence is the most important one in the article.
This is such a strange concept to me. When you are dating, don’t you slowly test one another and build up trust BEFORE you get married? Before you commit the rest of your life to each other, shouldn’t you trust each other with a chequing account?
Garth, time for a poll. Who trusts their spouse with ‘their’ money?
I’m sure Freedom Worst will explain all relations only work if everyone distrusts everyone, but that just makes one a inconsolable, narcissistic bore. For proof of this, see his next (or previous) comment.
Thank for this post
With Tangerine you have no bank fees, when you mention it to other banks they can waive their fees for all your accounts, just tell them that you want to close all your business with them.
Make sure your spouse has a job in one of the subsidised industry’s in B.C , that way you’ll be able to purchase the overpriced real estate in B.C. $500,000,000 subsidy every year for the film industry .Too bad for all of the lower paid taxpayer’s footing the bill.https://news.gov.bc.ca/releases/2016FIN0016-000699
Great post Garth. That is very valuable information and free. I hope the blog dogs realize how much all this would cost if you had to hire a financial advisor for it. I’m sure those of us who have been through all of this stuff know full well. Next year I turn 71 and in January I will be making my final transfer from my RRIF to my unregistered investment account. This process took several years (16) since I started melting down my RSP’s after retiring………now fully under my control with all the advantages that go along with unregistered accounts….
I’m gonna start sending a link of this article to all my Tinder matches. It’ll be my opener.
I’m disturbed whenever I see human in destress, any race, religion, brief system. Don’t matter I have empathy.
But Man, if you have Twitter, hush tag this. #ElectoralCollege
The unravelling of the loony left brained. Absolutely hallarious.
For this is not disturbing to me.
# 19 the other white meat (pork)
Plus / Minus – Sales of detached homes (year-over-year):
Oak Bay:
April: + 72%
May: + 6%
June: – 33%
July: – 36%
August: – 54%
September: – 32%
October: – 25%
November: – 24%
Saanich East:
April: + 48%
May: + 25%
June: + 16%
July: + 11%
August: + 11%
September: + 5%
October: – 18%
November: – 20%
As a realtor you probably don’t know that Victoria’s housing market began to change months ago.
Indeed the housing market correction process is underway in Victoria.
In 2010, Victoria realtors predicted higher and higher prices. They made claims similar to yours.
Then prices fell. Oak Bay was hit almost as hard as anywhere else in Greater Victoria.
. . . . . . . Single Family Home Prices. . . . . . .
. . . . . . . . . . . . .Oak Bay. . . . . . . . . . . . .
. . . . . . . (Percent Below 2010 Peak). . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0%. . . * . . . . . . . . . . . . . . . . . . . . . . . .
-1%. . . . . . . . . . . . . . . . . . . . . . . . . . . .
-2%. . . . . . . . . . . . . . . . . . . . . . . . . . . .
-3%. . . . . . . . . . . . . . . . . . . . . . . . . . . .
-4%. . . . . . . . . . . . . . . . . . . . . . . . . . . .
-5%. . . . . . . . . . . . . . . . . . . . . . . . . . . .
-6%. . . . . . . . . . . . . . . . . . . . . . . . . . . .
-7%. . . . . . . .*. . . . . . . . . . . . . . . . . . .
-8%. . . . . . . . . . . . . . . . . . . . . . . . . . . .
-9%. . . . . . . . . . . . . . . . . . . . . . . . . . . .
-10%. . . . . . . . . . . . . . . . . . . . . . . . . . .
-11%. . . . . . . . . . . . *. . . . .* . . . . . . . .
-12%. . . . . . . . . . . . . . . . . . . . . . . . . . .
-13%. . . . . . . . . . . . . . . . . . . . . . . . . . .
-14%. . . . . . . . . . . . . . . . . . . . . . . . . . .
-15%. . . . . . . . . . . . . . . . . . . . . . . *. . .
————————————————————————
. . . . .March. . Dec. . .Dec. . .Dec. . .Dec. . .
. . . . . 2010. . .10. . . .11. . . .12. . . .13. . .
(source: Victoria’s RE board)
This happened while 5-year mortgage rates were falling, stimulating the housing market.
Rates are rising and will be a downward force on prices for years.
Victoria’s market had already begun the correction process without rising rates or the fed’s recent mortgage rule changes.
This won’t end well.
#22 Nonplused on 12.19.16 at 7:51 pm
Look, here’s the thing, she never told me she was married and it just happened a few times. Like twice a week for a year and that’s the max, it was probably less.
And I wasn’t trying to steal your money she told me she got a bonus at work and was going to cover our trip to Aspen. It’s over now and it’s not gonna happen again until she is sure you won’t find out next time. Please stop calling me “dirty” Steve, I shower everyday.
#169 Polls R Phake on 12.19.16 at 4:20 pm
#145 IHCTD9 on 12.19.16 at 1:50 pm
#103 Mark on 12.19.16 at 1:54 am
I highly doubt this. Self-driving vehicles will cost millions a piece…
_______________________________
Millions for a self driving car? Maybe in 1980…
———
About 3 million each after all is said and done. Mark is correct.
———
Right.
Maybe do a quick Google next time.
http://www.fool.com/investing/2016/08/04/how-much-do-driverless-cars-cost.aspx
Hell hath no fury like a… spouse scorned.
I found a bit of a mutual safety net through Questrade.
Open a joint margin account.(aka joint non-registered/’cash account’)
DON’T open a joint savings/checking account through a standard bank like bmo, vancity etc. (or close your existing joint savings)
The money can only be withdrawn into a joint bank account if it has both joint margin holders names on it.
The possibility of a post-argument ETF selloff is eliminated :)
Either spouse CAN contribute to the joint margin.
Downside. If you need the money it would take about a week to open a joint bank account and transfer the funds in.
Last time I spoke to them about this was a while ago. You’ll definitely want to double check my info if you go ahead with this strategy.
Smoking Man Post Decoded:
1. Start (and finish) off topic (attention grabbing as much as it’s disrespectful)
2. Pretend #1 is unintentional or justified because you are A) passionate or B) drunk C) lonely D) all of the above
3. Set up straw man argument based on something in the news that can be attributed to someone on the left
4. Attack and vilify everyone who understands the validity of social progressive viewpoints as ‘looney left brained’ (comment #35)
5. Laugh at how stupid people are who don’t hold your viewpoints
6. Substantiate nothing
7. Treat personal criticism with good, selfless humour (your most redeeming trait)
8. Contribute to the dumbing down of society by glorifying unsubstantiated prejudices
9. Brag about your PhD, which you don’t substantiate. Sometimes I think you may have made it up…
Repeat, day in, day out….
RE: #5 LovethisBlog :
This is very true. Marriage is really just an asset split. That and it makes it easier for the lower income divorcing spouse to get monthly payments from you.
When you marry, from that date forward, everything you purchase and every penny you earn, is split equally when you separate. So unless you are marrying a high income earner who loves to save, it is pointless.
This goes for girls as well as guys.
Pretty sure if one spouse dies and they shared a joint with right of survivorship non reg account, the deceased’s half is still taxable. You avoid probate, but can’t avoid deemed disposition at death.
Incorrect. — Garth
The difference between Deplorables and Progressives.
You’re at the Holiday Dinner at a Progressives house. Wine starts flowing and the issues come up, you chat.
1) Open Borders. We love everyone.
Immigration without vetting.
2) Man-made climate change is real.
3) Let men into our wives and daughters restrooms, poor souls, they may be transgender.
4) Allow illegal works in to suppress our wages.
5) We must destroy cheap energy. God damn big oil.
6) Driving a bike to work for your low-wage job, that cost a fortune at university and living in 500 sqft tomb is cooler that having a McMansion and driving a Camaro.
7) Wearing a Cowboy costume at Halloween is disgusting and insensitive.
8) Ordering a coffee from a girly man at Starbucks with a deep smokes octave forbidden.
9) All men are rapists, believe the woman all the time.
10) Hollywood Celebrities are the wisest of them all, worship or else.
Now in the progressive holiday party, you disagree with any one point you will be called a racist, a homophobe, sexist, pedophile. You and your entire family will be shown the door, even though your family had nothing to do with it.
Now at a Deplorable Christmass Party. You can say whatever the hell you want, we will just get you drunker hoping whatever demon in your head will be fried with the Jack Danials.
Marry Christmass my Dogs
#169 Polls R Phake on 12.19.16 at 4:20 pm
#145 IHCTD9 on 12.19.16 at 1:50 pm
#103 Mark on 12.19.16 at 1:54 am
Mark has a severe blind spot (pun intended) when it comes to self-driving vehicles. I think he just really struggles with understanding how the technology works.
I figured he didn’t get the technical but I’m surprised that he can’t understand the financial side of it either. If there’s an industry out the that can push on suppliers to get costs down, it’s automotive. Mark, just stop buddy. Just stop.
Excellent post Garth, (but you already know that!)
I started late on the Spousal RSP, but it is a real winner as my better half is in a much lower tax bracket.
Don’t forget the wills and powers of attorney, they will give you peace of mind as well as a smoother asset transition.
Sad that so many blog dogs are scared of their spouses, and what lies ahead for them.
Divorce happens; it happened to me, suck it up, move on, and make sure everything including money habits are discussed before getting married. You will be happier, and probably wealthier in the end if you do!
There are only a few investment places three-for-three on Brexit, Trump and the problems in Italy. These guys are one of them and their latest forecast is quite interesting:
http://icecapassetmanagement.com/global-outlook/december-2016-icecap-global-outlook-ostrich/
Great post today!
I always wondered why settling up divorces ends up being so complicated. The law is so cut and dry. Each party gets half.
I have assumed it was because spouses hide income and wealth from each other (or debts).
Just combine all finances from the beginning. It will force responsibility and discipline and if it ends in divorce, you will be able to settle it easily without giving it all away to lawyers.
Lead Paint respond to #43 Smoking Man on 12.19.16 at 9:27 pm
You inspired it.
Let’s rock little one
“So, what’s love got to do with it?” – BeauGesTe
#EssentialCouplesTherapy…
https://youtu.be/lu4RHvouJH8
[NoteToGT: And guess what, no BC FilmTaxCredits either… Do you know what really kills me, though – the Auteur is just 31. It doesn’t get more precocious than that. Bastard.]
When I started relationship with my wife, I was better looking (than her), made more (than her), saved more (than her), now 16 years later it’s other way around, plus she has secret account. I think she is putting something in my food… But now that I have think of I kook most of the time.
What is going on here, black magic…
https://youtu.be/J8moax_85j8
This separate account stuff is more significant than whatever reasons given by [millennials :)] for what benefit it may hold.
It would make household financial decisions a headache no? What do they do? Each pay 50% of the phone bill, ISP bill, mortgage payment, tax bill and on and on? What a pain in the @ss!
More important is the implied lack of trust. Bad way to kick off a marriage. That’s like letting the air out of a tire or two before driving off on a long, long road trip.
Shouldn’t a husband and wife be a financial team? My wife is a hard left NDP voting 90’s feminist, I am a fairly hard right Harper loving neandercon – we plan and execute with ease and jointly enjoy the fruits of our mutual sacrifices. If we can do it, anyone can.
I’d hate to try and run a household that has divided itself in this way, marriage is an “all in” kind of deal.
I understand why women want to get married, but a man has to be crazy or desperate to agree to that arrangement.
Lots of men waking up to this fact, but still a lot of namby pamby’s out there willing to submit to anything in the hopes of a little female attention.
#18 bigtowne
“just goes to show ya buy used.”
Whaaat!!! Buying used cars!?! Yer just buying someone else’s problems.
Most of ’em are two wrecked cars welded together, with parts falling off daily. You’ll need new brake shoes and socks every summer.
Seriously though, if you keep promoting used cars, there’ll be less suckers, er, new car buyers churning cars for you and me. Zip it.
I finally talked son number 1 into getting into politics, Conservative candidate. He can’t lose.
Number one sales rep in his fortune 500 corp. I taught the bastard door to sales. Now that’s a book that might get some traction. Vs my disaster sales fiction novel.
Screw you money desperadoes. Figure it out yourselves. That is where the real fun is.
Life is all about finding your voice, independent of who you’re trying to please.
Why would anyone try and please?
Teachers, I’m thinking.
So, if one’s spouse is already in the same marginal tax bracket, really we’re only talking asset allocation and survivorship as benefits, right?
Free blog dog advice: make sure you marry someone who is money compatible with you. If you’re a saver, you’ll go crazy if you’re married to a spender.
DELETED
I asked my wife once (or twice), why are you still with me? You can take probably 65% + alimony with kids.
She told me …
1. All men can’t be trusted with money. You are a cheap bastard but understand investing vs consuming.
2. Why would I want to leave you? Most men out there are idiots.
3. I get 100% when you die.
My love of my life. Hot and awesome at math.
If your partner doesn’t understand being frugal but well off then be ready for a divorce . Life is but an equations. Keep it balanced!
Welcome to free tax advice on the internet – worth exactly what you paid for it.
As there is no tax in Canada on capital gains of your (his) principal residence, his estate will owe nothing. So as long as you are the beneficiary, it’s all good.
If not, time to lawyer up.
#7 NoName on 12.19.16 at 6:56 pm
Excellent way to describe amount of coal used every year.
WHat i would like to add is if 13.6 Million Ontarians are paying obscene amount of money for their hydro it will offset all that pollution , and bring world wide pollution in equilibrium, and we all know, best thing about equilibrium is that nothing changes… #sumF=0
One more interesting thing 3 billion world wide cook and heat using open fire or non efficient stoves.
https://goo.gl/IOJOPb
—————————————————————-
Thanks NoName and Investors Friend. I always like to give these examples when sitting around with friends and they start talking about climate change/warming and carbon taxing. I often get blank stares and silence falls around the table and then I get a few looks of disbelief. One would think that with that amount of coal being burned each year that the entire planet would be surrounded by a massive black cloud but it isn’t. So where is all the stuff going? Certainly not in Nanaimo anyway. Makes a person wonder about why we are paying so much in carbon taxes when the amount we are polluting is a wee tiny fraction of what China itself contributes and on a world scale it’s really nothing. Not saying that we shouldn’t be concerned about how much we do contribute but are we taking it a little bit too far and is it now becoming a way for governments to further tax the people. Just my honest opinion.
In an ex career I was at first surprised to see so many older women finding out they had no credit or financial identity after the hubby died and everything had been in his name……typical of a past generation.
I was behind an elderly gal who was finding out her Sears card was being declined at the register….she was saying that she’d been using it for thirty years….eye opener for her…..sad. I saw this many more times working with contentious estate negotiations….sad.
The law says she gets half no matter what….do what Garth is suggesting and get protect her interests if you pass. The ancillary benefits are as stated. Joint acts etc….all rock over time.
I figured out that a young wife is far more happy when she’s secure fellas….wink wink. I always put the house in my wife’s name….knowing the law would give me half if anything happened anyway……29 years on….no problem….very happy wife.
Smoking Man on 12.19.16 at 9:27 pm
The difference between Deplorables and Progressives.
Now in the progressive holiday party, you disagree with any one point you will be called a racist, a homophobe, sexist, pedophile. You and your entire family will be shown the door, even though your family had nothing to do with it.
Now at a Deplorable Christmass Party. You can say whatever the hell you want, we will just get you drunker hoping whatever demon in your head will be fried with the Jack Danials.
Marry Christmass my Dogs
======================
Smok…
Can you enlighten us why the MSM reports on Hilliary’s “Putin hacked us” rant hasn’t labelled her as a “conspiracy theorist”?
I read a bit and can’t find the term used in any report… but it seems obvious since not one of her accusations is substantiated.
You mean unsubstantiated like that ‘rigged election’ thingy Trump kept saying, and the millions of ‘illegal’ votes? — Garth
#44 JJ. sorry I hadn’t read your post earlier…..yeah contentious divorces…..in my experience many begin in the lawyers office…..I settled many through understanding lawyers rate books. I discovered that by negotiating with the lawyers about their pay out was more beneficial to all parties than negotiating with the parties themselves . See…the lawyers know going in what a file is worth….they hate settling early. They also know the court calendar and how much time they have between court dates to sew the seeds of animosity. I discovered that by paying the lawyers off in present value they were willing to play nice a lot sooner…..this saved everyone a lot of money. To the lawyers it’s all about their money and when they get an approx sum sooner than later everybody wins.
[…] Read more here:: http://www.greaterfool.ca/2016/12/19/intimacy/ […]
at 9:40 pm
Great post today!
I always wondered why settling up divorces ends up being so complicated. The law is so cut and dry. Each party gets half.
I have assumed it was because spouses hide income and wealth from each other (or debts).
Just combine all finances from the beginning. It will force responsibility and discipline and if it ends in divorce, you will be able to settle it easily without giving it all away to lawyers.
=============================
A couple of thousand years ago three wise guys visited a baby the called “Hey Zeus”.
They gave the infant gifts of the Earth and one special answer to the question,
“Do you know why a divorce costs so much?… Because it’s worth it!”
Seriously peons. Make good choices, listen to Garth and ignore your relative’s advice.
The little woman & I are coming up on 35 years married (to each other).
Enough already about the cash accounts
I finally opened one. For my daughter
$1000 VFV and 1 share of TSLA
But you have to be a 5%er or even 1%er to afford a cash account
Normal family making say $125k combined can sock away 11k tfsa ,5k resp and say 8k or more rsp and get to plenty of tax value from this. That’s around 20% of gross saved in registered accounts. Could probably put more even in rsp and get tax benefits. Now mortgage, fuel, car,heat,hydro,taxes,kids stuff,fun stuff (life is for living) etc
There is no non registered left over. Forget it. Ok if you’re advising dinks making $250k but that’s a tiny slice of the population so please, enough already with cash accounts.
Love ya❤️️
How do you share the capital gains in a shared non-reg accounts?
Do you need to share them equally or based on how much money each spouse makes/contributes?
If one spouse has a bunch of capital losses carried forward, can that spouse use them all up before we start splitting the capital gains attributions?
Or is it better in this case to open an account in that person’s name only first, use up the losses carried forward and then change the account to a joint account? Thanks
Married 24 years to a great lady who is smart and has been earning six figures for as long as I can remember. Joint with full disclosure is the only way to go…. Do your homework up front to avoid the flakes and you’ll be fine…
Btw, FF, can you tell us more about your sweet, massive appendages? I need a good laugh to end the day…
Russ on 12.19.16 at 11:03 pm
…. enlighten us why the MSM reports on Hilliary’s “Putin hacked us” rant hasn’t labelled her as a “conspiracy theorist”?
I read a bit and can’t find the term used in any report… but it seems obvious since not one of her accusations is substantiated.
——————————————-
You mean unsubstantiated like that ‘rigged election’ thingy Trump kept saying, and the millions of ‘illegal’ votes? — Garth
============================
After presenting a suitably deep genuflect, this writer states,
“Exactly! MSM was all over Trump on the shit he spewed. Hilliary. Crickets.”
I love the game and ‘ can be very glad to be a bystander with little emotional involvement in either side.
Thanks for the advice Garth. I utilize it during my regular fee-for-service manager.
My hobby account is balanced precisely on your recommendation (with the exception of Eagle Energy ETF) as a comparison to the “pro”.
#9 stats freak
what happens if your partner croaks and the house is all in his name? Is the principal residence still taxed in his name by CRA, or not?
####################################
Yes, the principle residence will be taxed at 1.5% of its value, if youz partner croaks and diezs, and your name is not on title. If youzs comes across something like dis, you use the MPAC statement of your property assessed value, NOT THE MARKET VALUE (no matter what your goomba lawyer says!!!) YOU TAKES A COPY OF THE MPAC ASSESSEMENT AND SHOVE IT IN THE GOVERNMENTS FACE. THE MPAC VALUE IS USUALLY LESS THEN TODAYS ACTUAL VALUE, AND THE GOVERNMENT CANT DO NOTHIN ONCE YOU SHOW THEM THEIR MPAC ASSESSMENT.
IF YOUZS HAVE ANY PROBLEM, YOU LETS ME KNOW AND I WILL TAKE CARE OF IT, CAPISCE!!!
FUGGET ABOUT IT
So us Trump supporters are bad huh? Well I can live with that considering we have been right over and over again. Look for more of the same and look for more of the same from the Trump deniers.
DELETED
#36 Victoria Real Estate Update on 12.19.16 at 8:53 pm
# 19 the other white meat (pork)
Plus / Minus – Sales of detached homes (year-over-year):
Oak Bay:
April: + 72%
May: + 6%
June: – 33%
July: – 36%
August: – 54%
September: – 32%
October: – 25%
November: – 24%
Saanich East:
April: + 48%
May: + 25%
June: + 16%
July: + 11%
August: + 11%
September: + 5%
October: – 18%
November: – 20%
As a realtor you probably don’t know that Victoria’s housing market began to change months ago.
Indeed the housing market correction process is underway in Victoria.
In 2010, Victoria realtors predicted higher and higher prices. They made claims similar to yours.
Then prices fell. Oak Bay was hit almost as hard as anywhere else in Greater Victoria.
. . . . . . . Single Family Home Prices. . . . . . .
. . . . . . . . . . . . .Oak Bay. . . . . . . . . . . . .
. . . . . . . (Percent Below 2010 Peak). . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0%. . . * . . . . . . . . . . . . . . . . . . . . . . . .
-1%. . . . . . . . . . . . . . . . . . . . . . . . . . . .
-2%. . . . . . . . . . . . . . . . . . . . . . . . . . . .
-3%. . . . . . . . . . . . . . . . . . . . . . . . . . . .
-4%. . . . . . . . . . . . . . . . . . . . . . . . . . . .
-5%. . . . . . . . . . . . . . . . . . . . . . . . . . . .
-6%. . . . . . . . . . . . . . . . . . . . . . . . . . . .
-7%. . . . . . . .*. . . . . . . . . . . . . . . . . . .
-8%. . . . . . . . . . . . . . . . . . . . . . . . . . . .
-9%. . . . . . . . . . . . . . . . . . . . . . . . . . . .
-10%. . . . . . . . . . . . . . . . . . . . . . . . . . .
-11%. . . . . . . . . . . . *. . . . .* . . . . . . . .
-12%. . . . . . . . . . . . . . . . . . . . . . . . . . .
-13%. . . . . . . . . . . . . . . . . . . . . . . . . . .
-14%. . . . . . . . . . . . . . . . . . . . . . . . . . .
-15%. . . . . . . . . . . . . . . . . . . . . . . *. . .
————————————————————————
. . . . .March. . Dec. . .Dec. . .Dec. . .Dec. . .
. . . . . 2010. . .10. . . .11. . . .12. . . .13. . .
(source: Victoria’s RE board)
This happened while 5-year mortgage rates were falling, stimulating the housing market.
Rates are rising and will be a downward force on prices for years.
Victoria’s market had already begun the correction process without rising rates or the fed’s recent mortgage rule changes.
This won’t end well.
YOU’RE RIGHT ABOUT IT NOT ENDING WELL.
AS A MATTER OF FACT, IT WON’T END AT ALL, EVER.
NOW, GIVE IT A REST SINCE EVERYBODY KNOWS YOU OBVIOUSLY RENT.
#2 & #8 Victoria Real Estate Update
EH, OH, YOUZS BREAKIN ME WITH YOUR UPDATES. WAY TO LONG. I’M GETTING A HEADACHE JUST READING YOUR STORY. KEEP IT SHORT AND TO THE POINT!!! THAT GOES FOR ALL OF YOUZ. KEEP IT SHORT AND TO THE POINT, CAPISCE!!!
BY THE WAYS, I’M A FRIENDS OF JOHNNY ROASTBEEF.
Nothing quite like the traditional values expressed in a joint account.
Could someone please point out to Smoking Man that if he has ever, in his lifetime, immersed himself in a public pool, hot tub or public swimming hole at the lake then he has been in a transgender bathroom, literally.
Because they are everywhere, no?
#16 glad it has worked out.
in cases such as yours and particularly in cases where one partner is bringing most of the assets (monetary at least)
into the union, a prenuptial agreement is a definite consideration, otherwise after you are married your assets
become common property ,your spouse is entitled 50% if the love boat sinks…
I know so many couples who think I’m nuts for having accounts joint with my wife. Less for Justin! That’s reason enough.
Great info Garth.
The non-reg account was precisely what I was curious about. Thanks for the clarification and all the other useful info.
Mr. Turner please remove this post if it is in violation of your forum rules.
I have no affiliation with this organization, but upon stumbling on the work they do I felt compelled to share:
http://www.empowermentplan.org
There are small but great things happening in Detroit and surrounding area.
#45 Diversified in Oakville
I just loved your Post!
Reminded me of the “Dumb and Dumber” movie.
Hysterical!
#47 JJ
Yes. I too like to keep everything simple JJ.
However, when it comes to being simple minded, it would be extremely difficult to surpass you.
Unless, of course, you are under the age of 12 and are simply displaying the naivety of youth.
Hi Garth,
I get the purpose of a spousal RRSP but it seems better for a married couple to contribute to their own RRSP’s. The higher earner can contribute to both RRSP’s and the CRA would have a tough time tracing the money back to a specific partner, especially if they have a joint bank account.
This way the higher earner keeps their RRSP room and also tops up their partners RRSP.
Take care,
Nick
p.s. Please don’t send my IP to the CRA
Too late. Damn. — Garth
Re: #22 Nonplused
You make some good points.
In marriage, one has to be really lucky. Even if the mutual lies between young nuptials are initially unintentional, no young person really knows themselves that well before they become betrothed and joined in holy matrimony.
Marriage is a huge risk, notwithstanding the financial aspects involved. Why would people engage in any activity where the failure rate is statistically proven to be 50%? Emotion. Lust. Hormones. Desperation.
Kind of like buying a house in Vancouver. But I digress.
So yes, marriage is a risky and uncertain endeavour, that can have disastrous emotional and financial results in half of the situations, and unimaginable benefits (happiness, joy, security, love, life-long companionship, joint wealth, tax benefits, family, harmony, etc.) in the other half. It’s a crap shoot at worst, and an educated guess at best.
Nevertheless, your old man should have kept his business funds separated from his personal funds. That was a big mistake. Having a joint account with one’s spouse has nothing to do with maintaining a legitimate a commercial account for transacting one’s business affairs.
What was he thinking??? C’MON!!!
To “Co-Mingle” an inheritance or not.
“Junior” inherits $100k and wonders about throwing it into the spousal joint account. (Paranoid thoughts abound)
I’m still going with the theorum that Freedom First is
a dwarf with large appendages
OR
An emotional dwarf with large issues.
Either way, a freak of nature that every Florence Nightingale wishes to “save”.
Not a bad schtick if it works eh Firsty……
Young punks:
If you’re dating a young woman, and want a view into her future – take a good look at her mother.
If your GF looks like she was raised well, and her parents appear to be solid, then compare yourself to her father. If you seem similar in a lot of ways, that is a good sign for future marital compatibility as well.
In short, if you are dating a young woman who comes from a broken family, has been “riding the carousel” for years, has no ambition, no convictions and is a general all around shallow person – you are an ultimate fool to even consider the possibility of marriage. Just burn your all your money and house now, it’ll be less painful.
“Better to live on a corner of the roof than share a house with a quarrelsome wife.”
Proverbs 21:9
To Wayne and Jerry
I agree, how can the average family top up all registered accounts and plans and still contribute to “nonregistered” accounts…well when you get that inheritance THAT is where you stash it to compound greatly not to be used til retirement.
To achieve this, ensure the joint account you open has “joint rights of survivorship”. If you check out early, your death won’t be a taxable event (which is normal, when all assets are deemed to have been sold and tax is payable on the gains),..Garth”
Is it possible for a child to also set up a joint account like this with an elderly parent so that upon death, assets could be taken over without tax implications….
Garth
Quite surprised you never give the rank and file advice on setting up residence outside Canada. Lots of great places to live in Asia, South America that have zero taxes on any assets, investments, dividends held outside the country. The only catch for old farts is health insurance, but many of these countries also have that as well. As for putting stuff jointly in a Canadian spouse name, that’s just plain crazy. Get a foreign spouse who likes to cook and clean, look after her well and enjoy your overseas residency.
#18 bigtowne on 12.19.16 at 7:33 pm
“…just goes to show ya buy used.”
Excellent post and one that also points out trending commercial behavior. The marketplace, bricks and mortar a well as online, is rife with it.
Buying new is very nearly always a PITA. Something always seems to be wrong- defect, missing part, lack of performance, far cheaper than its predecessor…..not to mention time lost, car usage, attitude in attempting to redress the problem.
Yes indeed, buy used, as the savings are so underrated and you’re far more likely to find better quality NOT made in China. Plus, if you break it, wear it out or get tired of it- no worries.
#114 NoName on 12.19.16 at 8:15 am
One more interesting thing 3 billion world wide cook and heat using open fire or non efficient stoves.
https://goo.gl/IOJOPb
=================================
I traveled a lot to India in the 80’s.
No doubt it is still much the same today.
Every evening at dinner time the whole country was a smoky haze.
I wondered why until I realized it was wood and coal used in cooking that caused the greatest pollution of the day!
Our Anti Progress eco Nazis will not see the forest for the trees.
They will just block all progress thinking that the whole world has electric stoves powered by Hydro electricity.
Meanwhile they do’t stop to think about how they DRIVE to their Protest marches.
Bottom Line:
Without oil, gas and its by-products, life in earth would be Brutal and Short. Maybe 40 year life expectancy.
Allow the natural evolution of eco products to take over oil. If you get Government picking winners like wind farms you get failure.
Every salesman lies whenever they open their mouth. When a wind farm salesman says the wind farm will produce 10 megawatts do you actually believe them? Where are the bullshite dectectors?
In the last post I was referring to the ECO nazis who are against even the cleanest of fuels CNG!.
This will go a long way to providing Clean cooking gas that is easily transportable to peasants in the third world.
They will cut down a lot less trees as well if they are allowed access to such fuels.
Better yet lets leave all our resources in the ground never to be used.
We’re pretty comfy now, why should we care about the others still in the water when we have our lifeboat!
#33 Ronaldo on 12.19.16 at 8:25 pm
Hey Ronaldo, melting down the RRSP sounds like a great idea.
Care to share the process?
The only way I see marriage working today is the man needs to make a million in the stock market, gotta be a trader, buy the house in his name, then sign a good prenup.
This way you keep control of the finances, this helps the woman with temptations of cheating or being disrespectful.
Once you have a large sum of money like that, you can work lower paying jobs as she’s entitled to money earned in the marriage.
I don’t see safety any other way in marriage today.
#81 Doomer
“Marriage is a huge risk, notwithstanding the financial aspects involved. Why would people engage in any activity where the failure rate is statistically proven to be 50%? Emotion. Lust. Hormones. Desperation. ”
You forgot societal pressure – you know those friends who are miserable in marriage and want to see you the same.
Would love to income split but if you marry an American living in Canada then a lot of financial tools beneficial for Canadian couples aren’t that helpful. Maybe Trump can put an end to the IRS’ far reach.
My latest conspiracy theory:
Creating a culture that makes people embarrassed to talk about money, or think that talking about it with their partners is not “romantic”, is yet another way that the TPTB conspire to keep the 99% poor.
The US election was rigged. And Trump continues to be right.
#40 Lead Paint on 12.19.16 at 9:20 pm
Smoking Man Post Decoded:
9. Brag about your PhD, which you don’t substantiate. Sometimes I think you may have made it up…
—————
You’ve been had! Of course he made it up. You must be new. You weren’t around when he started using it. He thinks he is an expert on “herdenomics,” hence he give himself the PhD.
You missed a couple of things. In the past, he would claim that he was a liar anyway. (Hasn’t mentioned this too much recently. Maybe he had an encounter and looked into the face of Honesty!) So when someone claims they lie when it is to their advantage, you cannot believe anything they say. Except the drunk part.
Also he claimed often he was an alien put on this Earth for who knows what. You mean an “advance society” of chain-smoking drunks??
If SM was around in the middle ages, he would have a notable position as the official Court Jester. Perhaps that is why he is still permitted on this blog.
#79 Freedom First
Oh FF, I wouldn’t have expected any less of a response from you.
The point is, if you are going to get married, all your wealth and income gets split evenly by law. So don’t try to hide it.
If you are not okay with that, don’t get married.
Marriage is mostly just a financial agreement. People don’t seem to realize that.
My wife and I are newly weds, we have a joint account but she still has her account where her cheque is deposited. We are mid 30’s. I pay all of our over priced household bills and mortgage payments since I am the bread winner with a little extra to contribute to omers AVC account, she pays for the groceries, and the outings, and my weekly cash allowance, so far so good.
Here is an interesting example of what I mean when I talk about real estate speculation:
Outwardly crappy building, with good bones, in a bad area that is likely to undergo a transition, making it very valuable:
https://www.thestar.com/news/gta/2016/12/20/only-the-province-can-protect-artists-enclave-keenan.html
From $150,000 in 1994, to $50,000,000.00 in 2016.
Remember, there has to be a “bet”. You cannot simply buy anything and ride the price up.
Joe Oliver: Trudeau’s foolish fake carbon-credit fixation is a betrayal of struggling Canadians
http://business.financialpost.com/fp-comment/joe-oliver-trudeaus-foolish-fake-carbon-credit-fixation-is-a-betrayal-of-struggling-canadians
#66 Michael on 12.19.16 at 11:27 pm
How do you share the capital gains in a shared non-reg accounts? Do you need to share them equally or based on how much money each spouse makes/contributes? If one spouse has a bunch of capital losses carried forward, can that spouse use them all up before we start splitting the capital gains attributions? Or is it better in this case to open an account in that person’s name only first, use up the losses carried forward and then change the account to a joint account? Thanks
=================
In a case where one spouse has capital losses, especially if substantial, it could be beneficial to keep the accounts separate and have the spouse with the losses take on all future capital gains. May as well get something out of your past mistakes.
As Garth pointed out, the other spouse can paying living expenses, allowing the spouse with the losses to invest maximum amount possible and pay no tax on capital gains.
Naturally, once this evens out — then you should consider the joint account. And also for estate planning, that is a consideration.
Bank of Canada senior policy advisor Joshua Slive
The risk of household financial stress and a sharp correction in house prices
Bank of Canada – Banque du Canada
https://www.youtube.com/watch?v=rR8TqaHIOu4
http://www.macleans.ca/economy/economicanalysis/the-bank-of-canada-just-laid-out-how-the-economy-could-collapse/
Hoo Boy…lots of life advice today.
I’m getting a more clear picture of why some of you seem so miserable…
Recall some time ago that I put forth the proposition that you should have a holding company all registered and filing and etc.
Seek the advice of your accountant but my holding company, active or not, thinks highly of its shareholders and as such it pays for all our insurances, home, vehicles and life. Among many and significant other tangible perks.
My wife of 42 years and I have a sort of 51-49 split on it although its structured such that if I go wacky my wife’s vote along with the one my accountant has overrides mine. Hasn’t happened yet but if I continue to read here it seems close…
sorry, it happened once before a few years back. I wanted to open up a rehab centre for former Girls Gone Wild after they put the dude in jail…teach them how to pass over shiny things in the store and and keep the T shirts on after a glass of wine…basic life skills.
Both my accountant and my wife thought that wasn’t the highest and best use of our investment money.
I am unsure why everyone keeps saying that in a divorce, each party gets half. That is not quite true.
With the very recent changes to the family law in BC and Ontario, whatever you bring into the marriage is excluded from the division of assets.
If the wife had $1 million in assets (house, bonds, cash, etc) BEFORE she got married, in the event of a divorce, that million is excluded. If the woman brought that into the marriage, she gets the million. The husband and her split the growth on the million and any other ‘growth’.
For example, if she brought in one million and after 2 years their assets are now worth $1.2 million, they each spit the 200k in growth. So she gets $1.1 million, and he gets $100k. Not really half now…
In BC and ON, the family laws now almost act like a pre-nup.
Its interesting that as more and more women have higher incomes than their male counterparts in the younger demographics, and more of a trend to being the breadwinner in the younger demographics, the law now changes….
#16 I’m stupid on 12.19.16 at 7:22 pm
“What is your advice to couples where one has all the assets? That was my situation when I got married. I’m a sucker for love and put my wife on all my accounts. Fortunately she still loves me.”
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That was stupid! :-)
If you put me in all your accounts, I’d love you too… :-0
TCC
Melting Down RRSPs
Ronaldo at 33 said:
Next year I turn 71 and in January I will be making my final transfer from my RRIF to my unregistered investment account. This process took several years (16) since I started melting down my RSP’s after retiring………now fully under my control with all the advantages that go along with unregistered accounts….
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Melting down may well make sense if you retire before age 65 and yet don’t have a large pension income.
For example the tax rate on the first $42 k of taxable income in Ontario is just 20.05%.
But not sure how common that it is to retire much before 65 with no pension income.
I started collecting a pension last year at age 55. So far, it seems better to let my RRSP grow rather than pay tax now.
But let’s see the marginal tax in Alberta is 30.5% on taxable income from over $45,916 up to $91,831.
It seems I could get some money out now and pay 30.5% tax Then I might be able to have that money grow in a non-registered account on a tax deferred basis (unreleased capital gain) or low tax basis (dividends or realized capital gain).
On that basis it could very well make sense to take some money out now.
But it is hard to change a mindset of letting it simply grow in the RRSP.
And, money in a margin account is accessible and very easy to spend away. I am more inclined to leave it grow in the RRSP and deal with the taxes later. Also in RRSP I can trade stocks without worrying about triggering any tax just yet.
How to Offset the RRSP tax
One theory is to borrow a lot of money and create interest to offset the RRSP tax.
That only works if you don’t trigger any much taxes with the investment money (go for unrelealised capital gains). And at 3% interest or whatever it takes a TON of borrowing like $333k borrowed with 3% = $10k interest to offset the tax on a measly 10k RRSP withdrawal, 666k borrowed to get out $20k. No thanks.
Furthermore the tax saved just goes to paying interest albeit you MIGHT make more on the investment.
I just wanted to say that I am on those who was with someone for ten years and then got a phone call telling me not to come home because I didn’t live there any more and it was over. And it WAS… she had cleaned out every account we had and transferred all the money to her parents, leaving me homeless and with $16 to my name. Because I had been living my life debt free until then I had no credit cards, no lines of credit, no vehicle and no way to get any useful amount of credit since I had no credit history.
The house was sold and she then refused for nearly a year to negotiate the release of the funds from the real estate lawyer so there they sat in trust while I sat homeless.
Never ever believe anyone who tells you the worst it could be is half of the change in net value during the marriage.
Going to family court to fight for half costs $10000 per day, which is why 95% of cases settle out of court. They never settle for 50/50 though.
In my case, she got 75% of the assets, the kid, the car and years of support that reduced my net income below the poverty line.
There is none, NOTHING, ZERO advantage to trusting a domestic partner with your finances. If it happened to me it can happen to anyone. 50% of marriages end in divorce, don’t become another statistic.
Don’t date, cohabit with or marry anyone who can’t pull their own weight financially. Don’t let them stay out of the workforce to raise children. Don’t give them access to your resources. The risks are not worth it.
I feel very hesitant about accepting the advice about keeping a joint taxable investment account. Are there any known cases of CRA deciding one way or the other on the issue when it comes up? I would much rather keep accounts separate and not risk angering the taxman, than save a little bit of tax and have the nagging worry that I could be busted at any time.
CRA can request banking records, so wouldn’t it be readily apparent that only one spouse was responsible for all purchases made in the account, if (for example) only one person had any earnings?
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Can somebody please help with the following questions?
If you marry someone with debt, does this debt become yours?
If you split from this person, does this debt follow you?
If this person dies, does the debt pass on to you?
what a difficult topic… I have to bite my tongue and not say things I will regret, other than thank Garth for touching such a difficult topic…