Last weekend Harry and Meghan officially kicked off the 2018 wedding season; if you’re planning on doing the same this summer here are a few things to consider:
- Upon marriage your Will becomes null and void, so make sure you follow up after the wedding to update your Will and Power of Attorney. Otherwise provincial intestate laws come into effect and your assets may not be distributed as you would have liked.
- When writing up your new Will with your new spouse, remember Registered assets like your RRSP, RRIF, TFSA can be transferred tax free to your spouse upon death. Other assets such as investment properties or non-registered investments will probably have capital gains tax owing regardless of who you leave them to; these types of assets are best left to the kids.
- Update your Net Worth Statement prior to walking down the aisle. No one likes to think of divorce when entering a marriage, but with the high divorce rates you want to protect yourself; especially if it is a second marriage and kids are involved. If you were ever to separate down the road, you get to ‘keep’ the value of your net worth prior to marriage, and only the assets you accumulate together will be split 50/50. So, it is a good idea to know your starting point, collect your current statements and file them away. Hopefully you will never have to pull the file, but if you do, you will be glad you have it.
- Consider creating a marriage contract, in many places there are automatic defaults for property division if the marriage ends through death or divorce. A marriage contract is an important part of your wealth protection and inheritance planning. The contract will help protect your assets from claims by your spouse if you separate or divorce, and will ensure you both pass on your assets to your chosen beneficiaries upon death.
- Business assets are normally separate from Family Property, however, keep in mind if your new spouse works for you, he/she may have claim on your business assets upon divorce.
With all that being said, this is a wonderful opportunity to work together with you new spouse to build your wealth and plan your life together.
It is time to re-do your Financial Plan, call me when you get back from the Honeymoon!
Have a great weekend,
Tracey
Source: article posted on Advisor.ca 05-09-14 by staff, MT 06-04-16