Couple finance: How to save tax & protect your wealth

Synopsis Finances are a cornerstone of marriage, shaping both relationships and futures. At the ET Wealth Expo 2026, specialists emphasized the necessity of balanced fiscal strategies in partnerships, the dangers of income tax clubbing, and the importance of wills. Listen to this article in summarized format Listen ET Online Marriage is not just a partnership of two individuals but also a financial partnership. Decisions about investments, property ownership, loans, insurance and succession planning can have long-term consequences for both spouses. At a panel discussion on Couple Finance: Managing for Tax Efficiency and Being Ready to Face Eventualities at the ET Wealth Expo 2026, financial experts discussed how couples can structure their finances, avoid common income tax clubbing mistakes and protect their wealth against unforeseen circumstances. Here are the key takeaways from the discussion. Joint account for expenses, individual accounts for investments Should married couples pool all their money into one account or maintain completely separate finances? Suresh Sadagopan, founder of Ladder7 Financial Advisories, said couples follow different arrangements depending on their circumstances. While some maintain separate accounts and investments, others have one spouse managing household expenses and the other building investments. However, he cautioned against an arrangement where one spouse spends all their earnings while the other invests and accumulates wealth. This could create financial difficulties if the marriage breaks down, particularly for the spouse who has not built independent wealth. He recommended a hybrid arrangement in which both spouses contribute towards a joint account for household expenses, in proportion to their respective incomes. They can continue investing through individual accounts, ensuring both participate in wealth creation. Transferring money to your spouse does not automatically save tax One common misconception among couples is that transferring money to a spouse and investing it in their name can help shift the resulting income to their tax return. Nitin Kaushik cautioned against this assumption. Under the income tax clubbing provisions, if a husband gifts money to his wife and she invests it in a fixed deposit or mutual fund, the income generated is generally clubbed with the husband's income and taxed in his hands. In other words, transferring ownership of the money does not necessarily transfer the tax liability. Kaushik suggested that couples could instead explore extending a genuine loan to the spouse at a reasonable interest rate, subject to proper documentation. For instance, if a husband lends money to his wife at 6-7% interest and she earns a higher return by investing it, the difference could potentially create a tax-planning opportunity. However, the arrangement must be genuine and evaluated in light of applicable tax provisions. Hitesh Shah also highlighted that there is no universal tax-planning formula for couples. Opportunities depend on their respective incomes, tax brackets, investments and financial objectives. Buying property jointly? Maintain a clear contribution trail When couples purchase a house together, their financial contributions may not always be equal. One spouse may contribute more towards the down payment, while the other pays a larger share of the home loan EMIs. Shah advised couples to clearly document how they intend to fund the property and contribute towards the loan. Maintaining records of each co-owner's contributions can help establish the financial trail and reduce the scope for disputes. Couples should also examine ownership, borrowing and actual repayment contributions when claiming home loan tax benefits rather than assuming that adding both names to the property automatically makes both eligible for deductions. Aditi Sharma emphasised that asset ownership should be viewed from the perspective of family security, not merely tax savings . If all assets are held in one spouse's name, the other could face difficulties accessing them in the event of death or incapacity. A nominee is not necessarily the legal heir: Why couples need a will Many people assume that naming their spouse as the nominee in a bank account, mutual fund, EPF account or insurance policy automatically makes them the legal owner of the asset. Sharma clarified that this is not necessarily the case. For several financial assets, a nominee primarily acts as a custodian who receives the asset or facilitates its transfer following the account holder's death. Ultimate ownership may be determined by succession laws and applicable legal provisions. However, certain assets, including life insurance policies, have specific statutory provisions governing beneficial nominees. Therefore, nomination should not be treated as a substitute for a will. Sharma recommended that couples prepare wills and ensure their nominations and succession documents do not contradict one another. A will allows individuals to specify how their assets should be distributed instead of leaving the distribution entirely to applicable succession laws. She also cautioned against postponing estate planning until a person reaches a particular age or accumulates substantial wealth. Even someone who owns just one house or a single financial asset should consider preparing a will. Your spouse should know where your money and documents are kept If one spouse manages all the family's finances, the other could face considerable difficulties if that person suddenly passes away. Sadagopan said the surviving spouse may have to deal with emotional trauma while simultaneously managing household expenses and accessing financial assets. He recommended maintaining sufficient accessible funds through a joint bank account or an emergency fund invested in relatively accessible instruments such as liquid funds or arbitrage funds. This can help the family meet immediate expenses while other assets are transferred or settled. Sharma suggested maintaining a financial checklist containing details of bank accounts, fixed deposits, investments, insurance policies, property documents, lockers and important identification documents. Couples should also know where their wills, digital records and passwords are securely stored. Kaushik suggested maintaining an 'If I die before you' diary, documenting both assets and liabilities. He stressed that transparency should extend to outstanding loans and money lent to others, not just investments and bank balances. He recommended reviewing this information at least once a year, suggesting April 1 as a suitable time. Employer health insurance is not enough Medical emergencies, disabilities and chronic illnesses can disrupt a family's finances just as severely as the death of an earning member. Sadagopan cautioned against relying entirely on employer-provided health insurance. Employees could lose this protection when they change jobs or take a career break. He recommended having an independent health insurance policy with adequate coverage. He also pointed out that health insurance does not cover every medical expense. Nursing care, for instance, can become a substantial recurring expense. Depending on the city and level of care required, it could cost Rs 30,000-40,000 to Rs 1 lakh-1.2 lakh a month. If such care is needed for several months or years, the financial burden can become substantial. He therefore recommended maintaining a separate medical emergency fund, particularly for families with elderly parents or members who may not qualify for adequate health insurance. If one spouse earns 70-80% of household income, term insurance becomes critical When one spouse contributes most of the household income, the family's financial dependence on that individual is considerably higher. Kaushik highlighted the importance of adequate term life insurance in such circumstances. H