Prospera Credit Union will help get your financial ducks in a row

When you’re on your second—or third or fourth—marriage, finances can get a little tricky.

That’s why Prospera Credit Union Family Banking Relationship Manager Adelia O’Toole likes to make a list and check it twice when she sits down with a new couple. There are so many aspects to think about when it comes to marriage and finances a second time around that there is usually a meeting before the meeting to ensure all ducks are in a row.

Some key things new couples need to do is communicate about joint planning, discuss their financial goals, ensure they have been honest with one another about their assets and liabilities, and ensure they know what they want.

“It’s always good to have that conversation before you come in and see me,” O’Toole says, “because when you have that conversation with a third party I will be able to help clarify the issues and help you get your marriage off to a good start.”

Patrick and Sarah are a good example of what to do when multiple marriages and children are involved. Patrick was 64 and Sarah was 46 when they got married. It was Patrick’s third and Sarah’s second. He had two grown children, she had three young boys, and Patrick also had a grown stepdaughter from his second marriage who basically viewed him as her father.

The first thing they did was sell Sarah’s house and move into his home, for which he continued to pay the mortgage. They created joint accounts and rewrote their wills so the other would get their deceased partner’s estate (it would then go to the children when the second parent died). O’Toole stresses that only a new marriage—and not a divorce—will nullify an old will.

Patrick and Sarah also purchased life insurance plans whose payouts would go to the children.

“So it was very clear to the kids,” O’Toole says. “They knew if their parent passed away they got life insurance, but the parent’s spouse is not going to be sued by each other’s children for their mom or dad’s assets. It was clearly laid out.”

Another important aspect of marriage and finances a second time around is what to do about retirement. Patrick’s and Sarah’s plans changed when, six months after they married, Sarah got a job in another city. They bought a new house together, and Sarah started pouring more money into her RRSPs. Patrick, meanwhile, retired from his oil industry job but continued to consult. The plan is for Sarah to retire when she is 56, and Patrick will continue to consult until then—at which time he will be 74. Essentially, they will retire at the same time.

“That’s why it’s so important to meet with a banker as you go through your different stages, because as you can see there were so many different changes for them,” O’Toole says. “Both of them were in good standing because they had a plan.”

“… They were honest and direct with each other. They set up their accounts with me so that everything was streamlined. They got their will organized. They saw my colleague, the financial planner. He went over each of their separate retirement plans that they had going on.”

When all was said and done, Patrick and Sarah had no trouble thanks to the organization that came with meeting with a Prospera advisor like O’Toole.

“If it’s all set up ahead of time, during the honeymoon phase,” O’Toole says, “the future is clear and there are no misunderstandings down the road.”