Getting hitched creates challenges

Getting married, or moving in with a partner, might be an exciting step in life, but it does create some new financial and tax planning challenges.

Getting married, or moving in with a partner, might be an exciting step in life, but it does create some new financial and tax planning challenges.

“One of the biggest concerns for many life partners has to do with money,” said Tom Hamza, president of the Investors Education Fund, a non-profit organization dedicated to providing people with unbiased financial advice. “Who will spend what? How will you share the bills and how much will you save? You should discuss these questions even before you say ‘I do’ or move in together.”

To get started, sit down with your spouse or partner and discuss your short- and long-term financial and career goals, whether you want children and how many, when you hope to retire, if you’d like to start a business and how you’d protect your family in the event of an emergency or disaster — such as an unexpected death or illness, or loss of a job.

Another major question is whether couples will share their money or keep it separate?

“Actually, there’s no right or wrong answer,” Hamza said. “Some couples share everything, others don’t. Sometimes one person is a saver while the other may be more of a spender.

“It all depends on how you like to handle money and what feels right to you as a couple.

“Make sure you talk about these issues and then work out a common approach you both can accept. If you find it hard to agree, a financial adviser may be able to help.”

It’s also advisable to set up a budget with clear spending limits. Agree on how much each of you can spend — say $100 or $200 — without checking with the other partner. For bigger purchases, talk about then first.

If you do decide to keep your money separate, make sure you plan who will pay which bills. Also, discuss how you will handle you debts, including credit cards and student loans.

Sometimes, one partner has more debt than the other and there may be children from a previous marriage. Couple have to decide how to share these costs.

Getting hitched also has tax implications.

Unlike the United States, where couples can choose to file a joint tax return, each spouse or partner in Canada must file his or her own tax return and clearly indicate their marital status on the first page.

In Canada, common-law partners are defined as two people who cohabit in a conjugal relationship for at least 12 months. They are treated the same as a legally married couple for tax purposes.

While partners must file individual tax returns, it’s a good idea to prepare them together so you can take full advantage of available credits, such as the age, pension income, disability, and tuition and textbook credits. If one partner can’t use the credits, they may be able to transfer the unused portion to the other partner and reduce his or her tax.

By preparing their returns together, couples will be able to determine whether they can split their income and whether they can claim some benefits such as the GST/HST credit, the child tax benefit or the guaranteed income supplement, which are based on the family’s total income.

For couples where one partner is in a higher tax bracket than the other, they may consider splitting their income through a spousal loan to reduce the amount of tax they pay.

There’s another thing to consider: how will partners take care of each other if life changes?

It’s a good idea to discuss what will happen to your money if one or both of you gets sick or dies. You may want to consider buying life or disability insurance if you don’t have any at work, especially if only one of you is working.

And as soon as you marry, any will that you made is no longer valid. If you have children from a previous marriage you’ll want to have a good plan for the future.

“Remember that there’s more than one way to handle your money,” Hamza said. “You need to find what works for you and your life partner.”

Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors. He can be contated at boggsyourmoney@rogers.com.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

The QEII was closed Sunday morning due to a pole fire. (Photo courtesy City of Red Deer)
QEII closed near Alberta Sports Hall of Fame in Red Deer

Drivers are being asked to use alternate routes as southbound and northbound… Continue reading

Innisfail RCMP are investigating a single-vehicle crash that happened west of Bowden on March 21, 2021. (File photo by Advocate staff)
Bashaw RCMP investigate fatal collision in central Alberta

Bashaw RCMP are investigating after a fatal collision Saturday afternoon. Police were… Continue reading

A damaged unicorn statue is shown in a field outside of Delia, Alta. in this undated handout photo. It's not often police can report that a unicorn has been found, but it was the truth Saturday when RCMP said a stolen, stainless-steel statue of the mythical beast had been located in a field not far from where he'd been taken. THE CANADIAN PRESS/HO, RCMP *MANDATORY CREDIT*
Mounties get their unicorn; stolen statue of mythical beast found in Alberta field

DELIA, Alta. — It’s not often police can report that a unicorn… Continue reading

Red Deer Rebels forward Ethan Rowland battles with Medicine Hat Tigers forward Brett Kemp during WHL action at the Centrium Saturday night. (Photo by ROB WALLATOR/Red Deer Rebels)
Tigers claw back, hand Rebels 11th straight loss

Tigers 5 Rebels 2 The same old issues continue to plague the… Continue reading

There were six additional deaths across Alberta reported over the past 24 hours, bringing the death toll to 1,926 since the beginning of the pandemic. (File photo)
Red Deer Public Schools will not pilot the new draft curriculum at its elementary schools. (File photo contributed by Red Deer Public Schools)
UPDATED: Red Deer Public Schools says no to piloting new curriculum

Alberta Teachers’ Association support school boards

People are shown at a COVID-19 vaccination site in Montreal, Sunday, April 18, 2021, as the COVID-19 pandemic continues in Canada and around the world. THE CANADIAN PRESS/Graham Hughes
Federal government to send health-care workers to Ontario, Trudeau says

MONTREAL — Prime Minister Justin Trudeau says federal departments and some Canadian… Continue reading

People cross a busy street in the shopping district of Flushing on Tuesday, March 30, 2021, in the Queens borough of New York. Access to the COVID-19 vaccine in the United States is growing by the day. THE CANADIAN PRESS/AP-Kathy Willens
Despite COVID-19 vaccines, Americans in D.C. not feeling celebratory — or charitable

WASHINGTON — This might make Canadians jealous of their American cousins for… Continue reading

A man pays his respects at a roadside memorial in Portapique, N.S. on Thursday, April 23, 2021. RCMP say at least 22 people are dead after a man who at one point wore a police uniform and drove a mock-up cruiser, went on a murder rampage in Portapique and several other Nova Scotia communities. THE CANADIAN PRESS/Andrew Vaughan
Memorial service in Nova Scotia marks one year since mass shooting started

TRURO, N.S. — A memorial service is planned for today in central… Continue reading

In this April 23, 2016, photo, David Goethel sorts cod and haddock while fishing off the coast of New Hampshire. To Goethel, cod represents his identity, his ticket to middle class life, and his link to one the country's most historic industries, a fisherman who has caught New England's most recognized fish for more than 30 years. (AP Photo/Robert F. Bukaty)
‘It’s more than just a fish:’ Scientists worry cod will never come back in N.L.

ST. JOHN’S, N.L. — The latest assessment of Atlantic cod stocks, whose… Continue reading

FILE - In this Friday Aug. 21, 2020 file photo, Leonid Volkov, a top strategist for Russian opposition leader Alexei Navalny, addresses the media in Berlin, Germany. Activists for imprisoned Russian opposition leader Alexei Navalny are calling for massive protests in the heart of Moscow and St. Petersburg as Navalny's health reportedly is deteriorating severely while on hunger strike. Leonid Volkov, a top strategist for Navalny, said the demonstrations are called on short notice for Wednesday April 21, 2021, because "his life hangs in the balance. ... We don't know how long he can hold on." (AP Photo/Michael Sohn, File)
Navalny’s team calls protests amid reports of failing health

MOSCOW — Associates of imprisoned Russian opposition leader Alexei Navalny called Sunday… Continue reading

Florida Gov. Ron DeSantis gestures during a news conference Sunday, April 4, 2021, at the Manatee County Emergency Management office in Palmetto, Fla. DeSantis has received a single-dose coronavirus vaccine. His office confirmed Wednesday, April 7, 2021 that the Republican governor got the Johnson & Johnson vaccine, which requires only a single dose. (AP Photo/Chris O'Meara, file)
GOP White House hopefuls move forward as Trump considers run

WASHINGTON — Less than three months after former President Donald Trump left… Continue reading

Each spring, the Okanagan Fest-of-Ale is held in Penticton. This year, as a result of the COVID-19 pandemic, the festival will not be held. However, beer is still available. How much do you know about this beverage? (pxfuel.com)
QUIZ: How much do you really know about beer?

Put your knowledge to the test with this short quiz

Ontario Premier Doug Ford points on a COVID-19 caseload projection model graph during a press conference at Queen's Park, in Toronto, Friday, April 16, 2021. Ontario was set to backtrack on controversial new police powers to enforce stay-at-home orders implemented in the battle against COVID-19.THE CANADIAN PRESS/Frank Gunn
Ford backtracks on new police COVID-19 powers amid intense backlash

TORONTO — Furious criticism of new anti-pandemic powers that allow police in… Continue reading

Most Read