A Brief Discussion: So You're Going to Get Married?

by Jeffery A. Keill, CFP, CIM, FMA, FCSI, Portfolio Manager and Senior Wealth Advisor Keill & Associate- Advisory Team

Oh yes, marriage. That great institution that binds a couple together in sacramental and/or civil law. Of all life’s transitions and milestones, getting married is not only a significant emotional milestone, but also a major financial event. In 2013 a study of 4,500 couples, financial disagreements were and we believe still are the number one predictor of marriage breakdown. Even if marriage breakdown did not occur, no one wants to have financial squabbles. It is unfortunate that many of these problems can be avoided if discussed early, often and openly. Over many years of working with couples, we have put together a short list of financial considerations for couples to think and talk about before “tying the knot”.

Communication and Goal Setting

It is self-evident that communication and a sharing of life’s goals before marriage is of utmost importance. It is the glue that keeps couples together. Anything short of full-disclosure or honesty will devastate the relationship. Couples need to have open and honest conversations about their financial goals, values, faith, tradition. spending habits, debts and expectations. Discuss short-term and long-term financial and non financial goals and how you plan to achieve them together. Everything listed here is based on the simple premise of honesty and desire to share.

Budgeting/Cashflow

Take some time to write down each of your own individual cash flows prior to marriage, A simple page of money-in and money-out. This will become the foundation upon which you create your own Couples Budget. As you walk through each of the lines of income and various expenses, a conversation will happen over priorities, needs, and wants. Some young couples avoid this activity because it is seen as confrontational and neither wants to start a fight. However not doing this exercise could create a bigger issue later on. Make sure to include categories for both essential expenses (such as housing, utilities, groceries) and discretionary spending( entertainment, dinning out, gifts, hobbies, cellphones, travel, ect..).

Bank Accounts and Credit

The decision to merge bank accounts is very dependent on your personal history and experience. Young couples being married for the first time, generally understand the value of having a joint account. The simplicity of sharing resources makes having a joint account sensible. Further to this, young couples will sometimes view this as another romantic manifestation of their desire to be together. On the other hand, couples who are entering marriage for a 2nd time may feel different. They have been down that aisle before literally and prefer to retain their own autonomy for self-protection. There is no right or wrong answer whether you’ll maintain separate bank accounts, merge them, or have a combination of both joint and individual accounts. Additionally, understand each other’s credit history and how it might affect you ability to qualify for loans or mortgages jointly. I know it does not sound romantic, but we highly recommend both individuals getting a Credit Bureau Report done and share it with each other.

Debt Management

Further to getting a Credit Bureau Report, it is important for long term success of the marriage that each person be transparent about any existing debts, such as student loans, credit card debt, or personal loans. Often times two people coming into a marriage are not entering it on equal financial footing. One person will seem to have less debt or more assets , while the other will have more debt and assets. Avoidance of this conversation usually happens because the financially lesser of the two can feel uncomfortable or embarrassed. A humble understanding of the other person’s position is crucial to develop a plan to pay off debts together, and avoid accumulating new debt unnecessarily.

Insurance

Review your insurance coverage, including health, life, disability, and auto insurance. Determine whether its beneficial to combine policies, or maintain separate coverage based on your individual needs.

Estate Planning

Death is a strange discussion topic, just as your about to enter a new life. As part of the conversation about goals and dreams, there should also be a discussion about what happens if well something happens. Consider creating or updating your wills, power of attorney, and beneficiary designations to reflect your new marital status. For some couples, young and old, this may be the first time they have done a Will or Power of Attorney. A frank discussion about your funeral wishes, how you want your assets to be distributed in the event of death, and who will be charged with the responsibility, will leave you with less confusion when the time inevitably comes.

Tax Implications

Many people forget that one of the unintended attendees to a wedding is the Canada Revenue Agency. after getting married, certain elections and disclosures are available or required. Understand how getting married will affect your tax filing status, deductions and credits.

Financial Goals and Investments

What will come out of the discussion about life goals and values will be the financial monetary side of achieving these goals. A good time to have the conversations about achieving your common financial goals, such as saving for a house, starting a family, travel, retirement, should be discussed before marriage. These goals should be written down and laid out as Short Term, Medium Term and Long Term. Although the list is never set in stone, it will provide a starting line as you begin to move through life together. What is a goal today will pass, and new goals will come up. It is one of the beauties of the marriage journey.

Prenuptial Agreement

While it may not be the most romantic topic and makes for horrible pillow talk, consider whether a prenuptial agreement is appropriate to protect both parties’ assets and interests in the event of divorce. The word prefix, ‘pre’, is important as it denotes that it is an agreement before the nuptials, In other words, pre-marriage. Why is this important? Any private contract, which a prenuptial agreement is , simply must show several things before it is enforceable. One of those things is the ability to enter the agreement without duress of influence. It is easy to assume that signing a ‘ postnuptial’ would likely have been under the fear and risk of marriage break down. Of course no one wants to speak of failure before even walking down the aisle.

Financial Education and Professional Help

If you’re unsure about any financial matters, consider seeking guidance from a financial advisor, or couples counselor who can provide personalized advice and help you navigate the new world of couples finance.

By addressing these financial considerations together in advance, couples can lay a strong foundation for a happy, successful, and financially secure marriage, something that everyone hopes for and society desperately needs.

Disclaimer and Notice to Reader: This Discussion Paper should not be construed as legal or tax advice but rather only as a general statement and explanation of the topic matter. Professional tax and legal advice should be obtained for the readers own personal situation. For more information on this topic or how it applies to your family, please contact our Wealth Advisory team.

Last Edit Jan 29, 2025