Combining Piggy Banks: A Lesson in Shared Finances
Recently, two of my sons got into a heated argument over a toy they had purchased together after combining their piggy bank savings. One claimed greater ownership because his piggy bank had been fuller. But neither had counted their money before merging it, leaving no way to determine individual contributions. I stepped in and declared the toy community property—equally owned by both.
This moment mirrored the complexities of divorce or business dissolution and became a teaching opportunity. I explained in elementary terms that combining money with someone else is always a serious decision that requires planning. Generally, it is best to avoid merging finances or making large purchases with someone unless you are married or in a formal business partnership.
In marriage, combining finances can be a wonderful way to help couples with a shared purpose achieve common goals. However, some spouses choose to keep certain assets separate—not out of selfishness, but for financial security. In Texas, assets owned before marriage or received as a gift, inheritance, or personal injury settlement (excluding lost wages) are considered separate property. These remain solely owned by the individual spouse.
Assets acquired during marriage – including income generated from separate property—are presumed community property, equally owned by both spouses. Texas law assumes all marital property is community property unless proven otherwise. To claim an asset as separate, you must provide clear documentation showing it has not been mixed or commingled with community property. If you cannot prove that separation, the law may treat everything as shared.
Keeping separate and community property distinct is a smart way to protect personal assets—not just in case of divorce, but also from a spouse’s potential creditors. In Texas, a creditor generally cannot seize your spouse’s separate property to satisfy a judgment against you. This makes maintaining separate property especially important for couples where either spouse is more likely to face litigation, often due to careers vulnerable to high-risk mistakes – such as physicians, executives, attorneys, and business owners.
However, maintaining separate property is not simple. Any income it generates—like dividends or rental income—must be treated as community property. This requires constant attention, and even a small oversight like looking over a dividend payment can jeopardize future financial security. That is why having a strong support team, including an attorney and a CERTIFIED FINANCIAL PLANNER® professional, is invaluable. They can help you track and manage your assets, so you are prepared for whatever the future holds.
To find a CFP® professional near you, visit www.letsmakeaplan.org.
Hannah Gohmert, CFP® is the Chief Compliance Offer of Keller Wealth Advisors.
Published in the Victoria Advocate.
