Sharing finances in a relationship might have benefits but there are also risks to consider. PHOTO: iStock

Are you sharing finances in your relationship? Consider this first

When entering into a financial collaboration, one should consider what will happen to the finances if a partner were to die.


Sharing finances in a relationship might have benefits but there are also risks to consider. PHOTO: iStock

It might be romantic to share finances with a partner but there are risks to consider before sharing money matters. Perhaps consider the dreadful consequence of the sudden death of the partner. 


Collaborating on finances has its advantages, such as the ability to pool income together to buy property as co-applicants for a bond. Also, there is the cost-effectiveness of a single shared bank account. But this is not without risks.

It is important for couples to enter into this type of financial relationship with “their eyes open” to such risks, said FNB Fiduciary Product Head Johan Strydom.

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Strydom says couples who take the approach of sharing finances need to be aware of the risks and make necessary arrangements to mitigate them. This is essential should a partner suddenly die.

“Nobody wants to think about the possibility that their partner may pass away, but if your money matters are so closely interlinked, it is essential that you consider the possible repercussions and be sure that you’re prepared for them.”

Johan Strydom
There are many things to consider before sharing finances in a relationship. PHOTO:


If the primary account holder of a shared bank account passes away, the bank is legally bound to freeze the account. This is until the estate of the deceased partner has been fully processed.

“This requirement can be challenging for a surviving spouse or partner, even if they held separate bank accounts. But it is especially difficult in a joint arrangement because the surviving partner will be unable to access the account, or the money in it, for the full time it takes to wind up the estate,” Strydom said.

The same could apply to co-applicants on a home loan. When one of the co-applicants on a bond passes away, it impacts the entire credit agreement with the bank.

“This means that, in terms of the bond agreement, the total amount owing on the loan will need to be paid back to the bank,” he said.

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Inadequate plans in place could leave the surviving partner under immense financial pressure should one of them pass away.

According to Strydom, there are some rules of thumb that financial partnerships should stick to.

“If you have a bond, especially a joint one, make sure that both parties have adequate life insurance in place to cover the full amount of the bond. Don’t ever be tempted to cancel that life insurance later in life, before the bond is fully paid off. The older you are when a co-applicant dies, the more difficult it will be to refinance the loan or get credit elsewhere to pay it off,” he said.

Couples who choose to use one bank account should consider opening separate accounts. This is to ensure they have access to enough money to cover essential monthly expenses for a couple of months if their partner dies.

“While sharing all your money matters may have some romantic appeal and might offer financial benefit, it is vital that couples enter into this type of financial relationship with their eyes open to the potential risks it presents,” Strydom said.

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