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The Globe and Mail

Second marriage? Talk money early and often

Rhonda Liss and her husband, Max Kirschner photographed in their Toronto home on August 1, 2011.The story is about remarrying couples and how they deal with their finances and wills. This couple is now in their third marriages and both have adult children from previous marriages. They have been able to have honest and open conversations about their money and how they want to leave their estate if one of them were to die.

Peter Power/The Globe and Mail

Rhonda Liss, a Toronto mother of three, didn't meet her "soulmate" until she was 44 and twice-divorced. When she moved in with her new husband, Max Kirschner, she brought more than just furniture. Her youngest daughter, who is still a teenager, also moved into Mr. Kirschner's house, and Ms. Liss was still financially focused on helping her older daughters through university.

"I'm not one to live off of somebody, I take pride in that," said Ms. Liss. "But I had this financial commitment [to help my daughters through university]and once that commitment was over ... I took care of some things in the household."

Money had been a stumbling block in previous marriages, so Ms. Liss hit the jackpot with Mr. Kirschner's openness about finances and the future. It created a level of trust that helped her tell him that she had not made him executor of her will or her life insurance beneficiary, naming her daughters instead.

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This couple is lucky. Many don't address their complicated money situations when they remarry, financial experts and marriage therapists say.

"Everything can be talked about these days before marriage," said Edmonton-based personal finance expert Kelley Keehn. "But god forbid you talk about money and finances. They're worse than politics or religion."

Couples entering their second or third marriage need to get over their delicate feelings and have those conversations, even if they are emotional minefields. And remarriage is increasingly common. According to Statscan's most up-to-date numbers, close to 35 per cent of Canadian marriages are do-overs – and almost half of those are repeats for both spouses.

Remarrying carries a whole new level of financial complexity. Usually there are more assets, more debt and more children – and there are ex-spouses, who may be receiving support payments. Friction over finances can lead to obstacles, like accusations of gold digging from adult children, family feuds over wills and jealousy over dependent spending.

"When you're in love, you don't want to know stuff that will take the bloom off the rose," said Kathryn Guthrie, a registered marriage and family therapist in Ottawa. "But when it comes to money, it's better [to find out]sooner than later."

Second spouses need to be aware of how their partners treat their kids from the previous marriage when it comes to money. The kids-money-new-spouse triad can stir up feelings of resentment and envy.

"There can be a whole dynamic with step-families," said Ms. Guthrie. "Sometimes [the new spouse]can say, 'Oh, you seem to spending a lot of money on your kids, and there is never any left over for us.' "

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Then there's the opposite problem of adult children accusing the new spouse of taking "their" money. Any time there is a wealth imbalance in a second marriage, when one partner has far fewer assets, it's easy for unfounded suspicions to get out of hand.

"I remember a couple I knew. It was their second marriage for both of them and he had a lot of money," said Ms. Guthrie. "And his kids were so nasty to her because they thought she was a gold digger. Even though she wasn't, they made her life really miserable."

Ms. Guthrie suggests that it's the role of the parent to be clear with his or her children about what to expect when it comes to money and assets. But this involves openly discussing a will, which can also be a tricky situation for remarried couples, says Yolanda Van Wachem, an Edmonton will, estate and family lawyer.

"It's often because people don't know what the will says that a challenge arises," she said. "These are difficult discussions because people have different expectations."

And when these expectations aren't managed while the spouse is alive, all hell can break loose following their death. Ms. Van Wachem notes that in some provinces children can contest a will after their parent dies. Meaning that if there isn't a clear agreement on the division of assets before death, especially when it comes to how much the new spouse is getting, then there isn't any certainty that the partition will happen as planned.

"You can have all these discussions, but at the end of the day those plans can be frustrated unless there is a [legal]agreement, that spouse can change things," she said. "Dynamics change markedly after the death of a partner."

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As they did for one of her clients.

The woman was in the midst of working on a legal agreement with her second partner when he passed away. Now she is being pressured by his kids to sell the house she bought with him when they decided to live together, so that they can get half of the money. The woman was surprised by the reaction, because while her partner was alive they had had family discussion where there was an agreement that no one would sell anything if it disturbed the life of the remaining spouse.

A property agreement is a legally enforceable document that couples can sign to make sure that their will is solid. Paul Fensom, director of estate and trust services for Scotia Private Client Group, suggests that trusts are another way to ensure children from previous marriages get what the parent wants them to.

Mr. Fensom suggests couples resist the urge of putting the conversation off. "I wouldn't put these talks on the back burner," he said.

Talking early and often is important – but it's often a sensitive topic in second unions, says Andrew Sofin, a registered marriage and family therapist in Montreal. "They have already gone through – usually – a pretty difficult time emotionally around division of assets during a divorce," he said. "The No. 1 issue in divorces is usually money."

But having the courage to bring it up calmly can be a couple's biggest asset – and help keep the relationship together when times are financially tough, such as when Mr. Kirschner lost his job during the recession.

"I wasn't scared to ask if we were going to be okay," said Ms. Liss. "And being able to talk about that brought us closer together."

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