You’re Engaged…Now What?
Congratulations, you’re engaged! What an exciting time…but since you are reading this blog entry and not out celebrating, the initial magic has likely subsided and now you are thinking about what you should do to prudently prepare for marriage, legally speaking. (Well done. We like your style.)
You don’t have to do anything, of course. You can just get married and hope for the best, but there are certain issues you really should consider before you get distracted by wedding plans. Marriage is, after all a legal institution, and some preparation is advisable.
Wills: If you have a will, you need to revise or replace it. Section 15 of the BC Wills Act dictates that in most circumstances, marriage revokes existing wills. You might want to do this anyway, as your circumstances are changing, but, unless you specifically drafted it in contemplation of marriage, your existing will is going to be invalidated by your impending nuptials, so revising it is a necessity. If you didn’t already have a will, you might want to consider getting one. This is good time for you and your fiancé to discuss what you want to happen to your estates in the event that one or both of you dies.
Insurance, Pensions, and RRSPs: If you have any sort of investment that has a designated beneficiary, before you get married you should make sure that the listed beneficiary is still your intended recipient, which in most cases will be your spouse. (This becomes particularly important if you are getting married for the second time.)
Property: If you do not already own your home in joint tenancy, this would be the time to talk about what you plan to do about the primary residence or vacation home that one of you owns solely in your own name. Do you wish to maintain exclusive ownership or do you want to transfer it into joint tenancy? Whatever you decide there will be tax and estate implications, which will vary depending on your particular circumstances.
Shares: If you own a company, an important consideration is the company shares. If you should die first, the shares will pass to your spouse on your death, unless you specify otherwise in a will. If the marriage ends in divorce, the shares you own in that company could be found to be family assets and divided between you and your ex-spouse accordingly. One means of avoiding this is to specify otherwise in a marriage agreement.
Marriage Agreements: Formerly known as “pre-nups”, these agreements entered into before or after marriage, are designed to decide what will happen during the marriage and at separation/divorce, should it come to that. They can govern everything from child support, to who gets the house, to visitation rights for your dachshund. While prudent and advisable in many cases, marriage agreements must be negotiated and drafted with care. If the agreement is not fair and agreed to by both parties, without pressure and with adequate independent legal advice, years later, their terms can be varied in Court. If you think a marriage agreement is for you, talk to your spouse and then talk to a lawyer to explain your situation.
The above topics are not exclusive; your unique circumstances may dictate other pre-marital considerations. In any such planning, consider the potential legal and financial consequences and contact a lawyer, accountant or financial planner, as required.
These aren’t the most romantic pre-nuptial conversations, but a little practicality now can save you both huge hassles later — especially if the “fairy tale” marriage has an unpleasant, twist ending.