Advising those who wed again

Couples organizing a wedding should take time to plan their financial future, and this is especially important for those individuals preparing for their second or third marriages, according to Scotia Private Client Group.

“While a first marriage is usually more straightforward as couples are just starting out, often a second or third marriage can bring about more complex questions regarding finances, established assets and specifically will and estate planning,” says Paul Fensom, Scotia Private Client group director, estate and trust services.

Each partner in a re-marriage will likely come into the union with different levels of wealth or debt and one or both people may have children from a previous marriage.

“These are important factors to consider, especially in the event of a separation or death,” says Fensom. “Couples beginning a new life together often don’t want to consider these circumstances but having these discussions and planning ahead is the best way to avoid legal issues or family turmoil down the road.”

To ensure both the couple and their children are taken care of properly, Scotia Private Client Group advises couples to discuss the following before saying “I do”:

1. How will we merge our finances?Discuss where each partner stands financially as well as expectations for how finances will be managed within the relationship. For example, if one person comes in with significantly more wealth, expectations for shared expenses should be discussed.

2. Is a pre-nuptial agreement or co-habitation agreement right for us? Discussing a “pre-nup” when planning a wedding can seem unromantic. However, the reality is that these agreements protect both parties by providing the foundation for determining how assets will be divided in the case of a divorce or separation. The same holds true for a cohabitation agreement.

3. How will our children be taken care of when we pass on?Blended families are increasingly common. Couples may have children from previous marriages as well as children together. To ensure that all children are taken care of, each partner needs a clear plan on how they will support them in the event of a divorce or death. While splitting everything down the middle might be easiest, it may not always be the best approach.

4. Do we need to set up a trust?Trusts are often seen as a tool only for the very wealthy. But they are a practical and accessible option for almost any couple, especially if one or both partners have children from previous relationships. When considering one’s full estate including property, a trust can help secure peace of mind.

5. If we decide not to get married, what financial matters do we need to consider?Whether or not they choose to marry, couples are considered common law in some provinces after one year of co-habitation. This means they could face many of the same legal implications as a married couple, making it equally important for a common-law couple to discuss these same questions.

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