Top 3 Financial Discussions to Have Before Walking Down the Aisle

Preparing to get married is an exciting time. You may think, you finally found the one, the rest is a breeze. While that may be true, there are lots of important financial decisions that need to be made before walking down the aisle and signing that piece of paper tying you both together, legally.

Have an open and honest conversation about your current financial situation

While dating, you may not have had discussions about student debt you’ve accumulated, your credit score or loans you are paying off. Well, this would be a good time to lay it all out there for your future spouse. If one party has accumulated thousands in debt, while the other has none and is actively saving, it would be worth having a discussion on how those debts will be handled; is it now a joint responsibility or is that going to be kept separate? It is crucial to lay it all out there as soon as possible. Yes, it may be awkward, but trust me when I say, this conversation will save you from a lot of future arguments and confusion down the road. Understanding each other's total net worth in advance may bring you to a clearer understanding of the reality of your joint financial future.

This conversation may lead you to my next point.

Should you consider a Marriage Contract?

As trends are showing, couples are getting married at later ages. Currently, the average age of Canadian men to marry is 33 years old, and women are averaging at 31 years old. Why is this important you might ask? Well, at that time in one’s life, you may have accumulated substantial investments, savings, property, or yes, even substantial debt. With that being said, you may want to consult with a family law lawyer about what your best interests are moving into a joint union. This contract may discuss the details of assets already accumulated (real estate, investments, savings), the financial expectations and obligations of each party during the marriage, and in the worst case scenario, the financial obligations or protections one may have following a separation within the marriage. For example, the matrimonial home usually becomes a 50/50 joint asset for married couples, but what if one person was solely responsible for a substantial down payment and maintaining the home? Usually, if there is no contract saying otherwise, the matrimonial home will always be split 50/50 regardless of contributions, or lack thereof. This may also be something to consider if you have children from a previous marriage, of which you need to consider their financial future as well. A marriage contract shouldn’t be about anticipating the dissolution of your marriage, but rather thinking, how can we protect ourselves and our extended family?

How will expenses be paid for?

It is important to discuss how expenses moving forward will be paid for. There are day to day expenses to consider, joint household expenses, savings plans, vacations, etc. Discussions should be had as to whether joint accounts will be opened, and who will be individually responsible for what? Now, it is common that couples may not earn similar incomes. So does that mean that joint expenses should be 50/50? Maybe not. Let’s say partner 1 earns $200,000 and partner 2 earns $100,000. A suggestion to make it more equal may be for Partner 1 who is earning 50% more, to be paying 50% more of the joint expenses.

Having these types of conversations may not seem ideal, could feel uncomfortable and quite frankly are not romantic, but think about the end goal here. Arguments over money is ranked as one of the top causes of divorce. Being able to sit down, have an open and honest conversation and lay out the reality and expectations both of you have moving into marriage, could save yourself from a lot of disagreements down the road.

Please note, this article is to provide general information, and is not to be interpreted as any independent legal advice. For more information on your individual legal rights, please consult a family law lawyer.

Best,

Meagan Bensadoun

Principle Mediator

Eye to Eye Family Mediation