Marry me, marry my money? I do believe that is a good question!

May 23, 2005

June is the traditional wedding month -- but these days, lots of couples are making life commitments to each other in both traditional and non-traditional ways. If you're among them, most of your thoughts are probably of the wonderfully impractical romantic variety. On the other hand, you have lived life on your own terms up until now, so you may have other, very practical questions on your mind. Such as: does everything I already own now become "ours" instead of "mine"? Or, who gets what assets if things don't work out? Or, more positively, how do we go about putting together an equitable and successful financial plan for our new life together?

Those are good questions -- and necessary ones to ask -- so here are a few of the basic answers you need to get your new union financially unified:

The role of marriage contracts. You go into a marriage, common-law or same-sex union with the intention of making it last, but what if it doesn't? Although the laws that govern "who gets what" vary by province, it's safe to assume your union will create an obligation to share the value of assets acquired by both partners during the marriage and, in some provinces, the value of assets acquired prior to the marriage.

That's why a marriage contract (or prenuptial agreement, if entered into before marriage) can be a useful mechanism for determining certain rights and obligations of each spouse, particularly as they relate to property and support issues in the event of a relationship breakdown. Marriage contracts can be especially important when one or both partners bring substantial assets of value into the union, or in second-marriage situations where one spouse has support obligations to a former spouse or children from a prior relationship.

Keep in mind that certain rights cannot be waived in a marriage contract � such as the right to equal possession of the marital home � 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.

The need to share. Make sure both of you are fully aware of each other's assets, financial commitments (such as loans) and credit history. Decide whether it is more advantageous to maintain separate bank accounts, credit cards, insurance coverage and investments, or whether it is financially beneficial to eliminate duplication(s).

The need to pay. Discuss who will be responsible for paying the bills, how to divide payments, and who should save and/or invest.

The tax-saving benefits of �togetherness�. Each partner will still have to file a separate tax return, but you can reduce your combined tax bite by taking advantage of all available deductions and income-splitting opportunities, such as spousal RRSPs.

The Will-ingness to change. A Will drawn up prior to marriage is invalid, unless it was made in contemplation of marriage. Review (and re-execute if necessary) your Will and your spouse's Will to ensure the assets will be distributed according to each partner's wishes in a tax efficient way. Review the beneficiary designations on RRSPs and RRIFs, company benefit programs, insurance policies and other investments. Check out the advisability of joint ownership of assets and how this may affect the value of an estate, probate fees, taxes and other issues upon your death and your partner's death if he or she should survive you.

It is said that love is its own reward -- but to make your new union financially rewarding as well, it takes careful planning and the implementation of investment and tax-reduction strategies designed to meet your evolving needs. A professional financial advisor can help ensure your new union is financially worry-free.

This page is part of the GayFinance series and is in the WeddingCategory.