Couples Are Asking For Trouble By Using Separate Financial Planners

With record high divorce rates and the growing popularity of cohabitation, there's hardly a cookie cutter financial plan for today's modern couples.

But whether they are married or live-in life partners, couples who choose to use separate financial planners could be causing more problems for themselves than they realize.

Keith Singer, president of Singer Wealth Management in Boca Raton, Fla., often deals with seniors who have remarried and would rather stick to their own guns financially.

"We just had a couple that came in today and they've been together 10 years and have separate houses," he told Business Insider. "He's super frugal and has a couple million bucks but he doesn't really need the money. Her kids help support her. There was definitely a conflict there. We almost had to ask for a mediator between them. It's difficult in that case to help them both meet their individual financial goals along with their joint goals."

Financial harmony in relationships is almost as important as intellectual attraction. When spouses or partners attempt to keep their finances separate, they create a logistical nightmare for their financial planners to sort through and leave themselves both vulnerable to losses if the relationship doesn't work out.

"Trying to coordinate the plans of two different planners to form a comprehensive strategy for the couple would generate a nightmare of complications," said Gil Armour of SagePoint Financial, Inc. in San Diego, Calif. "Both parties just need to be comfortable with the planner before beginning the financial planning engagement. Even though the risk tolerances or investment experiences of the two parties may be different, a good planner can make sure that the needs of both parties are met in an overall plan."

Oftentimes, the key to joint financial planning is learning to compromise on a plan that fits your unique relationship. Both Armour and Singer have clients who keep individual bank accounts and maintain a joint account for household expenses, a plan that gives each partner a sense of autonomy but still keeps them connected in their common goals.

"I always recommend having both parties meet with a planner at the same time," Armour said. "Occasionally you get a couple where one person has absolutely no interest and the other spouse handles everything. As long as they're comfortable with that, I can proceed and do my best to let them both know what we're doing. In most cases you have at least some modicum of interest for both parties."

Here are some rules of the road when it comes to financial planning for couples:

The best time to find a joint financial planner: Before you commit.

Armour: "Before marriage would be ideal because typically money problems are one big source of conflict in a marriage. We don't want any big surprises, like 'Oh my gosh you still owe $100,000 in college loan debt.' It's best to put everything on the table beforehand so people can enter into marriage or long-term partnership with open eyes."

How often to revisit your joint financial plan: Once per year to start, then every two to three years thereafter (varies).

Armour: "I'd say check in with your planner annually unless there has been no major change to your finances. Big changes are the addition of a child, a divorce, a big inheritance, anything that would change your investment picture."

Topics that important to cover with your planner: End of life care, estate plans, your retirement savings, trusts.

Armour: "You can certainly prepare for things like death or disability with proper forms of insurance if needed. Divorce is tough to plan for other than in most cases there are state laws determining division of assets depending on how long they've been together. If two people come together and there are significant assets already, you can set up separate accounts and not commingle them. They can keep existing assets separate and not mixed together."

Singer: "One of the common scenarios is when one spouse has assets they want to leave to their kids but they also don't want their new spouse have a [lesser] lifestyle. So you can create something called a Q Tip trust, which lets you leave money in a trust and provides that during the surviving spouse's lifetime, he or she gets income out of it. At their death, the money goes to their kids."