When people enter a relationship, money and finances are probably way down in their list of priorities. However, in time, financial issues can take center stage in the relationship and often by then, it could become very difficult to negotiate or find agreement.

As experienced family lawyers, divorce lawyers and separation lawyers know from their regular handling of such cases, it’s important to settle money matters, or at least think about and discuss them in the early stages of any relationship, be it marriage, cohabitation, common-law marriage etc. Whether the couple is of the same or opposite sex is immaterial, because emotions can run high when the relationship seems headed for a breakdown.

More Canadians are entering into non-formal relationships and it’s important to get clarity on financial arrangements. Many women fail to take steps to safeguard their financial interests or protect their individual finances. However, this is essential and can save people from a lot of stress and difficulties at some later stage. It’s important to be aware of your finances and economic rights, plan ahead for yourself and know your rights if the relationship breaks down.

Know The Rules

While entering into relationships, understand that you may be faced with financial obligations and commitments that you didn’t know about. In marriage, the rules are very clear. Pre-nuptial arrangements are also possible – these help to get things down legally, in black-and-white.

Common-law unions are recognized in Canada, unlike in many other countries. However, this doesn’t mean that partners are protected against mala fide intentions. Each province has different rules regarding the definition of “common law.”

In case of the death, common-law partners are much more vulnerable than legally married ones. Real estate values have soared across the country and in some provinces, the increase in value is shareable.

In some provinces, it’s important to write a will. This protects the common-law spouse and ensures that he/she gets some portion of the estate. If there are children, it’s also important to protect their financial interests.

Protect Yourself

• Keep meticulous records of all finances
• Personal finances should be kept separate from joint ones
• Keep copies of current important financial documentation
• Make a list of your debts and liabilities
• Talk about finances early in the relationship
• Enter into a marriage agreement or cohabitation agreement with legal advice in drafting and signed in the presence of witnesses
• Couples can reinforce their status by filing taxes together.
• Ensure that government-issued IDs (driver’s licenses, health-cards etc) have the same address
• Think it over before opening joint-accounts but maintain your personal account separately
• Agree on a common financial plan about sharing household expenses, couple expenditure, children’s education/welfare, health and insurance plans
• Save equally in a common fund created for children
• Write a will and protect your common-law or cohabitant partner
• Whether you’re married/unmarried, complete financial disclosure is the best option
• Protect your personal inheritances, gifts, bank-accounts
• Get clarity on property-ownership, assets and liabilities, pensions, child-care and medical expenses and insurance
• Create a parental agreement if you’re unmarried parents
• Firm up spousal/child support agreements if the relationship ends

This and other important information can be provided by a knowledgeable and qualified divorce/family/separation lawyer.