Financial Life with a Second Marriage: Plan Your Future Wisely
By Alterna Team
July 07, 2023

Entering a second marriage or common-law relationship is an exciting new chapter in life. You need to be open from the beginning to secure your financial future together. Approximately 26% of Canadians find themselves in a second marriage or common-law relationship; these relationships typically come with additional financial considerations. In this blog post, we’ll explore key points to discuss with your partner and the significance of seeking advice from a financial advisor when planning your financial future together.

Here are some things you can do to navigate your financial life together:

1. Have an open discussion about finances: Before entering a second marriage, it’s important to have open and honest discussions about financial matters. Full disclosure is essential, covering aspects such as credit history, levels of debt, financial obligations (such as alimony or child support), and any rights the ex-partner may have to pension funds. Transparency sets a strong foundation for trust and allows both partners to make informed decisions about their financial future.

2. Yours, mine, and/or joint bank account? In second marriages, it’s common for each partner to maintain their individual accounts while also having a joint account for shared expenses. However, it is vital to determine how expenses will be divided if one partner earns significantly more than the other, or if one partner has substantial alimony costs. Having a clear plan in place ensures a fair distribution of financial responsibilities and avoids potential conflicts in the future.

3. Do you need a prenuptial or postnuptial1
agreement? Consider creating a pre-postnuptial agreement, especially if children are involved, or significant assets are at stake. A pre-postnuptial agreement allows you to establish the terms and conditions regarding property division, spousal support, and other financial matters in the event of separation or divorce. It may not be the most romantic topic, but it can provide both parties peace of mind and protect their interests.

4. Update your estate plan: With a second marriage, reviewing and updating your estate plan is important. This includes determining how assets will be divided, designating beneficiaries, and ensuring that the appropriate parties are mentioned in your will. Failing to update your estate plan can lead to unintended consequences, potentially excluding or disinheriting loved ones from your assets. Seeking professional guidance from a lawyer and a financial planner is advisable to ensure your estate plan aligns with your wishes.

5. Establish your retirement plans: Discuss your retirement plans with your partner, especially if one partner intends to retire early while the other plans to work longer. Considering how this will impact your finances and retirement goals is important. By understanding each other’s retirement aspirations and financial needs, you can make informed decisions regarding savings, investments, and lifestyle adjustments to ensure a comfortable retirement for both partners.

6. Get expert advice: Navigating the complexities of financial planning and legal considerations in a second marriage can be overwhelming, so working with professionals such as financial planners and family lawyers who specialize in this area is highly recommended. These experts can personalize guidance based on your unique circumstances, ensuring that both parties feel confident and secure before embarking on their second marriage journey.

A successful financial life with a second marriage requires open communication, careful planning, and the guidance of knowledgeable professionals. By having open discussions about finances, establishing a clear financial framework, considering a prenuptial agreement, updating your retirement plan and getting expert advice, you can lay a solid foundation for a harmonious and financially secure future together.

If you’re planning your second marriage or are already in one, take the time to talk to your Alterna Financial Advisor today and ensure that your financial goals align with your new life partnership. Remember, a proactive approach to financial planning can bring peace of mind and pave the way for a prosperous future.

To help build or adjust your financial plan, you can book an appointment.

1 A prenuptial agreement is a contract entered prior to marriage, which sets out the financial terms of the relationship.  A postnuptial agreement does exactly the same thing only, it is created during your marriage rather than beforehand.