Financial things to do before saying, "I do."

March 15, 2004

Money doesn't make a marriage, but it can certainly undo one. That's why it's important to weave an equitable financial plan into the framework of your new life together. Whether you intend to exchange traditional marriage vows or choose another way to make a lifelong commitment to a significant other, here are a few of the financial things you should think about before saying, "I do":

Two into one must go: Once you were a single person with your own financial goals, resources and obligations. But as a union of two, you must integrate your financial life with your partner's in ways that are fair for both and fit your new lifestyle.

Sit down with your partner and mutually disclose assets, any financial commitments (such as loans) and your credit situation. Decide if it's more advantageous to maintain separate bank accounts, credit cards, and investments or to merge some or all of these financial items to eliminate duplication and enhance financial benefits (like having a larger pool of available income to invest). When making these decisions, always consider the tax and legal implications.

Discuss who will manage your financial affairs, how you will divide payments, and who will be responsible for paying the bills.

One into two can happen: You want your marriage, common-law or same-sex union to last, but if it doesn't you should be prepared. The laws that govern who gets what when a marriage ends vary by province, and in some cases quite significantly. In general, marriage creates an obligation to share in the value of assets acquired by both spouses during the marriage, and in some provinces, in the value of assets acquired prior to the marriage.

That's why many aisle-bound couples are opting for a marriage contract (often called a prenuptial agreement if entered into before marriage) that predetermines the rights and obligations of each spouse - especially in relation to property and support issues - in the event of a marriage breakdown. Marriage contracts are more common when one or both spouses bring assets of value into the marriage, in second-marriage situations where a spouse has support obligations to a former spouse and his or her children, or when one spouse is involved in a family business and the 'new' family does not want to see a relative newcomer inherit a large portion of the family business after only a few years of marriage.

A marriage contract should meet the objectives of each partner - but it's important to know that there are some limits imposed by legislation and the courts. For example, in most provinces, spouses can't waive their rights to equal possession of the matrimonial home, or their right to the division of Canada Pension Plan credits. And a court can overrule some or all of a marriage contract that it considers unfair or unconscionable, especially in the case of child or spousal support obligations.

Steps to take together: There are many other practical steps a couple should take, including drawing up a new will for each party, arranging mortgage, life and other insurance coverage to ensure each party is protected if one partner were to die, and instituting tax-planning and investment strategies that can deliver immediate, longer-term and post-retirement benefits.

There is a lot to consider. That's why, before you say, "I do," it's a good idea to review your financial affairs with a professional financial planner so you can feel confident you're on the right path financially, as well as romantically.

This page is part of the GayFinance series.