By Terry Ashton, updated July 25, 2024

Crypto investment is often discussed in the context of a sole owner or investor. Crypto wallets are highly secure if you keep your private keys to yourself. 

However, real life presents more complex scenarios than simple one-person ownership of crypto assets. People have spouses, business partners, collaborators, families, and heirs. Moreover, crypto may need to be turned over to other parties for security or estate planning purposes.

The most common case for joint finances is marriage. One of the first questions you encounter in married life is how you manage your money. Is it ideal to combine finances thoroughly, keep them separate, or have a combination of individual and joint accounts? With more people keeping crypto in their portfolios, how do married couples handle transparency, security, and investment decisions?

Business partners are also on a shared financial journey. If a corporation has bitcoin holdings, the partners must be clear about custody, insurance, and accounting. 

In this article, we discuss the scenarios that may involve crypto and joint finances. We will provide helpful tips on how married couples or partners can handle crypto holdings and investments alongside other considerations.

Managing Money and Crypto as a Couple

Married couples are not only a family unit but an economic unit. That being said, some couples are uncomfortable about discussing financial matters. First, you must accept that, like it or not, unless you’ve got an iron-clad prenup, your assets are largely conjugal. 

When it comes to money in marriage, honesty is the best policy. The same applies to crypto ownership, as it’s a new form of digital money and an investment asset simultaneously. 

On the surface, the founding principles of Bitcoin and crypto lie contrary to full disclosure with another party. However, marriage is a commitment that works when both parties trust each other. 

Whether you decide to have a separate, combined, or hybrid arrangement where some accounts are merged, and others are not, you still need to create a solid foundation of transparency on which to build your financial journey.

Starting with separate accounts

In the early stages of the marriage, separate bank accounts make sense. Couples move in with different spending and saving habits and an income difference. They might even come in with debts that may be brought into the relationship. Separate accounting systems help clarify obligations, responsibilities, and budgets.

This level of autonomy could lead to better communication on who is responsible for which payments. Some couples decide to halve expenses, while others agree to divide the costs proportionately based on how much each earns. In either case, tracking expenditures using budgeting apps, a spreadsheet, or a joint credit card will help build a foundation of cooperation and transparency.

This strategy has disadvantages when circumstances change—when one decides to change careers, become a homemaker, or go back to school. It could also lead to a situation where investments are not optimized. 

Setting up a joint account

Joint accounts simplify financial management immensely for couples. As such, they are the easiest choice, even though there are some fine points to consider. There is less fuss over relative income, and children’s expenses are paid from the joint or family account.

What is a joint bank account, and how does it work?

A joint bank account is shared with another individual for various purposes, including deposits, bill payments, savings, shared expenses, and investments. Joint accounts are commonly held by spouses, family members, or business partners. However, parents and a minor child can also have a joint account. 

Benefits of a joint account include quick access during crises or illness. It ensures continuity even when one party is ill, disabled, or deceased. In the case of death, access to joint funds is ensured without a will, lawyer, or having to deal with probate court as long as the joint account has the right of survivorship. 

Adult children caring for their aging parents might consider creating a joint checking account with their parents to access funds to pay for care quickly. 

If you decide to invest in crypto in the future, a joint bank account could ensure proper monitoring and allocation of funds. 

Choosing the correct joint bank account

Your joint account must have the features that suit you and your co-owners. It can be a joint savings account, a checking account, or a hybrid savings and checking in one. 

While you can always go to a brick-and-mortar bank branch to open your account, opening a joint bank account online is much simpler. SoFi’s joint account is an example of a combined savings and checking account. 

It has ideal features for crypto investors who want the convenience of online transfers and the opportunity to make the most of their money. Its APY is ten times the national average savings rate. There are no account fees or limits on the number of transfers you can make.

Couples and partners who trade or invest in crypto need a joint online bank account to facilitate quick transfers and fund their wallets. With online accounts, it is easy to facilitate tested investment strategies like DCA or dollar-cost averaging, where you buy a fixed amount of BTC or other crypto at regular intervals, regardless of the price. Joint accounts ensure that all crypto investments within the partnership or marriage are documented.

Using multisig crypto wallets

Multisignature or multisig wallets are ideal for married couples or partners who jointly invest in crypto or want to share their crypto holdings securely.

A multisig wallet uses multiple private keys to access or transfer crypto assets. The parties utilize smart contact to set the access rules for the shared wallet. 

With such wallets, you will use a multi-factor authentication (MFA) version. MFA is a multi-step account login process that requires more than just a password. Users may need a code sent to their phones or email, scan a fingerprint, utilize other biometric authentication, or access a code through an authenticator app. The second form of authentication helps secure the account by blocking unauthorized access when your password has been compromised.

How does a multisig wallet work?

A multisig wallet will require two or more private keys to execute a transaction. Smart contracts enforce the access rules, including setting the minimum number of keys.

Based on the number of keys needed to allow a transaction, multisig wallets can be classified as:

One of 2 signatures required

Two parties co-own the wallet and trust each other enough to share funds without requiring the other’s authorization. They can sign the transaction independently.

Two of 3 signatures required

The 2-of-3 signatures setup is one of the most popular multisig wallet arrangements. It requires two private keys to execute a transaction. A standard security practice is to have one key online, another key offline, and a third key held by a security company.

Business partners who invest in crypto or hold crypto could use this system or employ it as part of a larger custody plan.

Three of 5 signatures required

The partners or owners store four keys offline in different locations. The fifth key stays with the wallet provider or security company. Access to crypto assets is possible when you obtain two of the four offline keys. 

This method is ideal for couples who own a sizable amount of crypto and business partners who want to safeguard their Bitcoin or crypto investments. 

Multisig wallets that require all private keys 

The previous three types of multisig wallets are classified under threshold signature wallets. However, another kind of wallet with stricter rules requires all private keys for access. 

Smart contracts can establish these conditions. Hence, if you have a wallet with five keys, your predetermined number of signatories is five, and all five keys are needed to validate a transaction.

To use multisig, the partners or couple must be familiar with crypto and blockchain technology and the security implications of handling private keys.

Benefits of Multisig Wallets

For crypto holders and investors with joint finances, multisig wallets offer the following benefits:

Transparency 

Crypto ownership can sometimes pose problems in a marriage and divorce. Multisig infrastructure can enhance trust and credibility among business partners. A shared multisig wallet with set conditions for access ensures a mutual agreement between parties when signing a transaction, provided the smart contract allows it.

Treasury management

Businesses investing in crypto or keeping it on their balance sheet can start their crypto treasury with shared wallets. It is crucial for companies to manage key person risk, and shared wallets reduce this risk. You can share the wallet with your board of directors or partners. 

It is also possible to maintain shared wallets in organizations that work across multiple countries. In a Decentralized Autonomous Organization (DAO), strangers can share assets without needing trust. 

In a business partnership, you can use a 2-of-2 setup. In a corporation with board members, you can do a 4-of-6 setup if you need majority votes to approve a transaction. The setup can be modified to a 6 of 6 if you need the entire board to reach a consensus for a financial decision.

Medical emergencies or untimely death 

In all relationships and shared financial journeys, crypto ownership can be disrupted or jeopardized if someone falls ill or dies and fails to pass on private keys. Multisig wallets ensure that loved ones can still access your funds even if you are incapacitated.

Remember that there have been many cases where the failure to plan for worst-case scenarios has resulted in millions of dollars in crypto wallets. For spouses or parents and children, a one-of-two setup will suffice. 

Estate planning

For more detailed estate planning, you can work with a law firm specializing in crypto-related cases. Multisig wallets can easily be customized to suit your needs if more than two parties are involved.

To Protect Your Crypto, Use Robust Financial Infrastructure

Couples, business partners, families, and others who share a financial journey must start the money conversation ASAP. Even if money and wealth discussions are uncomfortable initially, they are essential to protecting a shared economic future. Failing to set the rules with clarity will backfire in the form of losses, litigation, and missed opportunities.

Newly married couples can ease into their financial journey with both separate and joint bank accounts. Those jointly invested in crypto—whether spouses or business partners—must consider getting multisig wallets to protect and help facilitate decisions. Multisig wallets can be configured using smart contracts to abide by signature requirements to approve a transaction. This ensures business continuity and financial resilience.

In any case, joint financial journeys involve more than just transparency and communication. They need the proper financial setup and infrastructure to ensure strict compliance. 

Unlike bank accounts and funds, crypto does not require IDs and signatures—only private keys. One of the most fundamental tenets of crypto is “not your keys, not your crypto.” Make sure the right hands manage those keys.