Money can often be a common source of friction between spouses.  This source of stress can be challenging enough in a first marriage, let alone second marriages or later life common-law relationships.  When couples enter a relationship with their own money, children and money management styles, it can make financial planning more difficult.  Setting expectations and facilitating honest communication are at the core of navigating these complexities. Here are a few financial and estate planning considerations for second marriages and common-law couples.

Common Law vs Marriage

It is important to note that in certain provinces, common-law spouses are not afforded the same rights that legally married spouses are in the event of separation or death.  Only certain provinces treat common-law couples the same as married couples with respect to property division when a relationship breaks down.

For income tax purposes, a couple is considered common-law after 12 months of cohabitation.  Claiming tax deductions and credits is generally the same for married and common-law spouses.  Things such as spousal tax credits, charitable donations, medical expenses, and child care expenses are all treated the same. 

Insurance Needs    

Insurance is an important consideration in a second marriage, even if you aren’t the primary income earner.  Life and disability insurance provide income replacement if someone dies or is injured, ill, or otherwise unable to work due to disability.  Insufficient insurance may mean that financial obligations to your former spouse and your children could be at risk in the event something happens to you.  It could also

expose your current spouse to financial hardship. 

Investment Planning

Established money management styles, children from other marriages and support obligations can make certain investment decisions challenging for new partners.  One partner may have a conservative investment approach with specific cash flow requirements while the other partner might prefer a more aggressive style taking on higher risk for the potential of higher reward.  Combining risk tolerances can be difficult, which is why some couples may choose to manage their investments independently.  If spouses are able to compromise and choose to fully integrate their finances, it would be beneficial to look at the portfolio holistically and take advantage of all planning opportunities available such as strategic

Estate Planning

It is important to consider that divorce and separation do not automatically change beneficiary designations on RRSPs, RIFs, TFSAs, pensions, and insurance policies.  In the same light, getting re-married doesn’t necessarily revoke prior designations made on plan documents or policies, which could mean that your current designations are in favour of a former spouse.  Updating beneficiary designations, preparing new Wills and power of attorney directives should be reviewed post-separation and again when entering into a second marriage.

Estate planning for blended families can be a complex task.  When entering into a new marriage, consider the implications your new relationship may have on your estate plans and be sure to update your documents accordingly.

For more information on the benefits of comprehensive wealth management and the importance of financial planning, contact Elizabeth de Groot of RBC Dominion Securities at elizabeth. or 705-444-4742 or visit her website at

This article is supplied by Elizabeth de Groot, CFP, FCSI, CIWM, FMA, Vice-President, Investment & Wealth Advisor with RBC Dominion Securities Inc. Member–Canadian Investor Protection Fund. This information is not intended as nor does it constitute tax or legal advice. Readers should consult their own lawyer, accountant or other professional advisor when planning to implement a strategy.