Here Comes the Bride: Financial Considerations for the Engaged Woman

07 May Here Comes the Bride: Financial Considerations for the Engaged Woman

For many women, engagement is a time of excited anticipation. You’re happy in love, planning the wedding of your dreams and dreaming of your new life.

But engagement is also a tremendous opportunity to work together with your partner in a new area. According to a recent poll, 85% of Canadians feel that having similar financial goals and habits is a requirement for a healthy relationship.[1] This means you’ll have to start working together – before the wedding.

For Better or for Worse

Disagreements about money are known to lead to conflict in a marriage. If you haven’t already done so, now is the time to discuss finances with your partner. It can be challenging, but it’s important to get everything out into the open.

The most important topics include:

• Accounts: Some women prefer to open a joint account with their partner. Others prefer to maintain their own independence. They want separate accounts to keep their own money aside for separate savings or purchases. There isn’t one right answer but it may be important to consider what each partner is bringing into the relationship and how much you are willing to share. (If you have children from a previous relationship, for example, it may be easier to keep things separate.)
• Credit cards: It’s a good idea to build and/or maintain your own credit. Decades ago, a woman may have had a card on her husband’s account, only to discover that she had no credit in her own name when he died. Avoid this by ensuring you have your own credit card.

For Richer or for Poorer

Once upon a time, two young people got married right out of school and started a life together. No one had assets. Today, it is more common for one or both partners to enter into an engagement with significant assets – or debts.

Consider these points:

• Assets: If you own a house, a business or anything else of significant value, you’ll need to carefully consider how you want your partner to benefit from that asset. If your partner is going to move into your home, for example, your partner may be entitled to part of the money when you sell it. If it’s a business investment, different rules may apply.
• Debts: Not all debts are created equal. A mortgage or a car payment probably shouldn’t raise a red flag, but credit card debt should. It’s important to be aware of any student loans as well.
• Consider a prenup: No one wants to consider the dissolution of a marriage before it’s even happened. But if you are coming into the engagement in a significantly stronger financial position than your partner – or even if you aren’t – it may be a good idea to consider negotiating a prenuptial agreement to protect your investments and assets.

In Sickness and in Health

Committing to another person isn’t always fun and games. It’s a good idea to use this time to consider what you want to happen when things take a turn for the worse.

• Disability planning: If you are unable to make decisions for yourself, you need to designate a power of attorney to make decisions for you. If you choose to designate your partner as your power of attorney, make sure he knows what you want. Better yet, write it down.
• Estate planning: The will you already have in place as a single person will not be valid once you are married, so be sure to consider any changes you’ll want to make. This includes:
  • Taking care of any children or dependents from previous relationship
  • Specifying guardianship of any future children
  • Changing beneficiary designations (as marriage does not nullify beneficiary designations made prior to marriage)
• Insurance planning: Review any insurance policies you already have in place, such as life insurance or long-term disability. Review your medical and dental plans – and the plans of your partner – to determine whether it makes sense for one of you to cover the other.

To learn more about preparing your estate, contact us.

[1] http://www.rbc.com/newsroom/news/2020/20200213-rbc-relationship-money-poll.html

Joel Rose

With over 35 years of experience, Joel Rose helps families – and their businesses – to prepare for the future. He offers guidance and support to help his clients create estate plans and succession plans that meet the needs of the whole family. Through his extensive professional and personal experience, Joel is known for his compassion and his ability to find a creative solution to meet each family’s needs.