Managing Financial Life in a Second Marriage

According to Statistics Canada, more than one in four Canadians in a couple is in a second or subsequent marriage or common-law relationship. For most people getting together as a new couple, financial life will change. Here’s a look at several financial and wealth planning matters that may be different the second time around.

Yours, mine and ours
There are many variations on how a couple can share—or not share—bank accounts, assets and expenses. They could share expenses from a joint account or split up who pays which bills. They could invest separately or in a joint non-registered account. They could combine some, all or none of their assets.

It’s also quite possible that spouses in a second marriage will make different choices in how they share finances with previous partners. Now they need to determine how they’ll combine or separate assets and expenses in a way that’s agreeable to both partners in the new relationship.

Another consideration is whether finances will be shared equally. In a second marriage, there may be a sizable imbalance in the spouses’ net worth or income level. So, financially, one might contribute more than the other. In some cases, an imbalance could lead to a discussion about a marriage contract.

Spending versus saving
Two spenders could jeopardize saving goals. Two savers might not enjoy life now. A spender and saver could either lead to friction or form the basis of an ideal compromise. Whatever your situation, it’s worthwhile to have the saving versus spending discussion to prevent conflict over finances from affecting the relationship.

When children are involved
Additional planning is required when there are children in the picture. If the children are younger, and especially if both spouses have children from a first marriage, the couple will need to agree on such financial matters as how or whether to give allowances and how much can be spent on arts and sports programs. If there are adult children, they may need to discuss what happens if a child needs financial help. One set of rules promotes family harmony.

Having children from a first marriage can also affect home ownership. Couples in a first marriage typically own their home as joint tenants, which gives ownership to one spouse when the other passes away. In a second marriage, some couples register the home as tenants in common. This way, each spouse owns a share of the home and can arrange for that share to go to their children upon their passing.

New retirement plans
Retirement plans usually change with a new spouse. Will you retire earlier or later? At the same time as your spouse? Where will you retire? Will retirement include travel or purchasing vacation property? Do you have a new financial goal? With our help, you can make any necessary adjustments to your saving and investment program to achieve your desired retirement lifestyle.

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