Enhancing the professionalism of financial advisors in the best interests of the consumer

Couples entering a second marriage are usually much more careful about money than they were the first time around. They are likely to have more assets to bring to a second marriage and they may have children by the first marriage who must be protected.

"Before heading to the altar, previously married couples should consider two things: review their estate planning, and get financial counselling," says Dave Thibaudeau, former president and CEO of Advocis.

Money can be an emotional issue and no two people have the same approach to finances. But there are similar questions both partners should ask each other before they marry:

  • Do you have any debts?
  • Do you have a will (and who are the beneficiaries)?
  • Do you have life or disability insurance?
  • Are you a saver or a spender?
  • Will we have separate or combined accounts?
  • What financial goals can we set together?
  • Do you have ongoing financial obligations from a previous relationship?

Working through different expectations in any of these areas can help decrease conflict in a second marriage. Marriage contracts are more common in second marriages because of the individual assets and responsibilities each will bring into the union. A contract can specify how assets will be divided if you and your spouse separate or one of you dies. Your financial advisor and a lawyer can help you work out whether a marriage contract is appropriate.

Insurance and estate planning are important foundations for your financial security. Having adequate insurance in case one of you becomes disabled or dies can give newlyweds a measure of stability and allow the couple to reach new financial goals.

"The obligation to support children by a first marriage goes on whether you are alive, dead or become disabled," Thibaudeau says.

The question of a will is doubly important if one of the partners has children by a previous marriage. Courts may have set conditions on guardianship or support of the children. A will should make certain these conditions are met, as well as setting out how assets will be divided between the first family and a new spouse should you die.

"When you divorce, it doesn't automatically nullify your will," Thibaudeau says. Unless you update it, your former spouse could still inherit. However, marriage revokes a will.

If you die without writing a new will, provincial courts will become involved in distributing your assets. The family would likely have to go through a long and painful process settling your affairs. Writing a will ensures that your wishes will be met after you die.

A mature couple who remarries may find that their adult children are anxious about how assets will be distributed when their parent dies. A well-written will reduces misunderstandings and puts everyone's fears to rest within the extended family.