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Advice for Those in Second Marriages

Jan 16, 2018 9:30:00 AM The MacMillan Estate Planning Team Estate Planning, second marriages, beneficiary


The statistics are in! Thirty-eight percent of marriages in Canada end before the thirtieth anniversary, and twenty percent of all proposals are done over the holidays. That means there’s a good chance quite a few of our readers got engaged this past December to their second or third spouse. If you’re heading into 2018 excited about the new fiancé(e) in your life, here is some advice for planning your estate.

Use Financial and Legal Tools Wisely. Prenups, postups, and trusts can all be used to help affluent Canadians protect themselves and their assets from the greed of a vindictive ex. Prenups are signed before you’re married. They’re an acknowledgement by your future spouse of the assets you own that they relinquish claim to. The acknowledgement is an important part of the prenup, and requires you to be completely honest with your fiancé(e) about all of your assets. If they sign a prenup without full awareness of the assets they were giving up, the courts will likely decide they were unable to make an informed decision and nullify the prenup.

A postup is the same as a prenup, but it is signed after you’re married. Postups can be a dangerous game to play, because if your spouse is angry that you’re suggesting one, they may very well divorce you over it. 

Trusts can be used to remove assets from your legal ownership. Once an asset no longer belongs to you, it is inaccessible to your ex. However, assets cannot be placed into trusts specifically to prevent an ex from accessing them. So it’s best if you entrust assets you want to protect sooner rather than later.

Don’t Assume. In many second marriages, both spouses have children from their former relationship. When planning their estate, this can lead to them writing their will in what seems like the simplest and most obvious way. Upon the death of the first spouse, all assets are transferred to the other. When the survivor dies, the assets are split evenly amongst all the children.

While this a nice idea in theory, things can go terribly wrong in practice. The challenge is that you’re assuming your family dynamic will remain the same after you pass. But in many blended families, the passing of one spouse leads to the slow alienation of the surviving spouse and their step children. Over the years, this often ends with the stepchildren being written out of the will and not inheriting any of their deceased parent’s assets.

Using a trust can allow your assets to benefit your spouse after you die while specifying that the assets must pass on to your children after your spouse no longer needs them. This is a powerful tool that allows you to provide for your spouse and protect your bloodline.

Getting married is exciting even if it isn’t your first time. But it’s important to go into any marriage with a cool head. This caution is even more vital for affluent Canadians who may be vulnerable to the people they think love them taking advantage of them. At MacMillan Estate Planning, we help you to create an estate that safeguards your legacy and protects your children while also providing for your new spouse. Call us.

At MacMillan Estate Planning, our team of professional trust and estate practitioners, chartered accountants, financial planners, and legal professionals look forward to assisting you with the design of your estate plan and will ensure you build, protect, and enjoy your wealth. The information provided is general and may not be suited to your objectives or sufficient to ensure the protection of you and your family. You should not act on this information without providing MacMillan Estate Planning with the opportunity to ensure that it is suitable for your unique situation.

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