More second marriages end in divorce than first marriages. Money is often cited as a reason. Here Are 5 financial tips to help keep that lovin’ feeling alive.
Words by Bryan Snelson

Stats Canada reports that almost 35% of Canadian marriages at present are “second timers”. Financial issues are often cited as a source of friction or even the demise of many first marriages. Second marriages are often characterized as being more of everything; more assets, more debt and more children. On top of all that there is often at least one ex-spouse who quite possibly is receiving support payments. That’s a whole lot of potential flashpoints. The divorce rate for second marriages in Canada is much higher than that of first marriages; 65% for second timers versus 48% for first time marriages. With second marriages, financial issues become even more complex and pose a greater risk of becoming a point of conflict but it doesn’t have to be this way. Here are five tips to reduce the risk of becoming a statistic.

THE FINANCIAL FULL MONTY

It’s been said that many women lose much of their sense of modesty regarding their bodies once they’ve given birth. Sticking with that logic then, a second marriage is no time to be shy about giving full exposure to your partner regarding your finances. One of the advantages couples have in their favour the second time around is that they tend to, based on accumulated life experiences, have become a little savvier about financial matters. They understand the significance of a frank discussion about money as part of a healthy functioning relationship. That doesn’t necessarily mean the happy couple are going to agree on spending priorities for example, but at least all facts are out in the open for discussion.

YOURS, MINE AND OURS

Because disagreements can and do occur with respect to spending priorities, make a clear distinction between which expenses are to be handled individually and which are to be handled together. Think of these expenses in terms of three categories; yours, mine and ours. Have one joint chequing account to handle common living expenses with each partner retaining their own separate personal account. Each partner can be responsible for contributing a pre-determined amount into the joint account to pay for common expenses. This leaves the remaining amount to pay personal monthly expenses, spend or invest as that partner deems appropriate. Rather than a fixed dollar amount some couples choose to pay expenses based on a ratio. This helps to ensure that each partner is contributing the same percentage of their income to a certain goal, expense or debt. Maintaining a sense of financial fairness is important in any relationship and becomes even more important in a second marriage.

SEATBELTS SAVE LIVES — PRE-NUPS SAVE SANITY

When you climb into your car and put on your seatbelt, you do so not because you anticipate getting into a car accident. You do so in case you get into a car accident. This is the best way to think about a pre-nuptial (pre-nup) or co-habitation agreement. Don’t be lulled into thinking that “we’re just moving in; not getting married” and as such won’t need an agreement. In Ontario, after three years of co-habitation the law considers your union to be a common law marriage. That means that should there be a breakdown in the relationship, many of the rights and responsibilities are the same as those of persons who have been wedded in the more traditional sense. There is no delicate way of broaching the subject, so it’s best to simply lay it out in the open; a good agreement now helps to prevent unpleasant disagreements from occurring later. The earlier in a relationship this occurs the easier it will be. Raising the matter after you and your partner have lived together for months or even years can become unnecessarily messy.

A pre-nup is of equal if not greater significance when children are involved. A pre-nup can be an instrument to make sure that children from a previous marriage are provided for when a parent dies. Alternatively, a well-structured agreement can protect your new spouse in the event of your death. A pre-nup that backs up the provisions of a will can make it far more onerous to contest a will since it proves that the will’s contents were agreed to by both spouses.

WILL/POWER 

It should probably go without saying, but is too important to be left unsaid. Whenever there is a significant change in your life such as the end of a marriage or the start of a new one, you need to visit your lawyer and have your will updated. Ditto for powers of attorney. Don’t scrimp on this. It’s too important. Get a lawyer; the best one you can afford. Ask friends or family members for recommendations.

BENEFICIARY CHECK 

Something that is overlooked with astonishing frequency when people are headed down the aisle for a second time is beneficiary designations. Take a look at the beneficiary designations for pensions, life insurance policies and your RRSP or RRIF accounts. If you have more than one registered account, check them all. Don’t assume that if you took care of a change in beneficiary change on one account that it automatically occurred everywhere else. The error might not even be your own: financial institutions can and do make mistakes.

Marriage can be and often is one of the most emotionally rewarding choices you can make in life. Don’t let financial matters stand in the way of enduring happiness. Honesty, full disclosure, and thoughtful planning will go a long way toward keeping peace in your new family.

Bryan Snelson is a Vice President, financial advisor and branch manager with Raymond James Ltd. Mississauga. His views do not necessarily reflect those of Raymond James and his article is for information only. Raymond James Ltd. is a member of The Canadian Investor Protection Fund. Bryan’s financial market reports can be heard daily at 6:45 am at 4:40 pm on the Toronto radio station JAZZ FM91.