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Second Marriages

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									                     Your Finance

               By John Johnson, LLB




                                      Second
                                      Marriages
                                      Managing the Labyrinth of
                                      Estate Planning and Marriage


T
       he divorce rate being what it is     sure that your children from your         might characterize as a “permanent”
       in this country, it is always sur-   first marriage are looked after, this     marriage breakdown.
       prising that there are so many       must be balanced with the needs of             It is also important to remember
intrepid souls out there still wanting      your newfound spouse. This discus-        that under Ontario law any existing
to give it another go.True love always      sion needs to take place before the       will that you have is automatically
finds a way, but it brings its own set      remarriage is celebrated. You may         revoked by your subsequent mar-
of problems not just in the matrimo-        lose a valuable bargaining position if    riage. If you do not make a new will,
nial context but also when making           you choose to marry first and ask         your estate will be distributed under
plans for your estate.                      questions later.The marriage contract     a formula prescribed by a statute
     Fortunately the solution to these      can carve out the assets of each of       called the Succession Law Reform
problems is readily available. Persons      you that are to be preserved for your     Act. The provisions of this statute
thinking about remarriage need to           respective children.The contract will     may or may not reflect what your
consider a marriage contract. This          take precedence over any subse-           wishes would have been had you
can be used to settle legal rights in       quent will made by either party and       applied your mind to the problem of
the event that the second marriage          will govern your affairs in the event     distributing your assets after your
does not work, but it also can be used      of your untimely death.                   death. At the very least, a new will
to settle legal rights in the event of           In truth, you can make such a        can save your heirs a couple of thou-
the death of a spouse.                      contract any time, but the rules          sand dollars in legal fees, which will
     The responsibilities you bring         change when you marry. Part of the        necessarily be incurred for the court
into the second marriage probably           problem arises from the fact that legal   application to probate your estate
includes children who are now adults        rights accrue by statute on marriage      without a will.
or on the verge of becoming adults          without the intervention of either             On the other side of this coin are
and in any event who would expect           party. In the absence of an agreement,    the persons who choose not to
to receive some benefit from your           the normal rights of a spouse on mar-     marry but to live in a common-law
estate in the event of your demise.         riage breakdown will be triggered by      relationship.This often occurs where
While it is common to want to make          the death of either spouse, which one     seniors live together but want to pre-
                  November 2004 - Fifty-Five Plus • Eastern Ontario Region Page 20 www.fifty-five-plus.com
serve their rights to a survivor’s pension from a
previous spouse. There is absolutely nothing
wrong with this situation except that if you are not
going to remarry, you need to remember that your
                                                                 What the Words Mean
existing will has not been revoked. The terms of                 Estate Planning Terminology
this will may only have applied to the circum-
stances of your previous relationship. Compound                  When making decisions concerning your
that with the fact that if you die without a will, a             estate, it is likely that you will encounter sever-
common-law husband or wife is not included in                    al terms you may not have heard before. Here
the definition of spouse under the Succession Law                is a glossary of a few of the most commonly
Reform Act and the result will be that your new-                 used estate terms.
found love is going to be unprotected in the event
of your demise. A common-law spouse must be                      Estate
specifically named in a will in order for him or her             Your estate is the total of all of your interests
to benefit.                                                      and/or holdings in land and other types of prop-
     You will also want to ensure that you do not                erty such as investments, retirement savings,
visit your previous matrimonial difficulties on                  business interests, etc. that you have at any given
your second spouse if he or she survives you.                    time — in other words, your “assets.”
When you are making a will in this situation, you
must make adequate provision in your will for any                Estate Planning
legal obligations that you have incurred for                     The process of organizing your assets and pre-
spousal or child support. Normally this arises by                serving your wealth during your lifetime to meet
way of divorce order or separation agreement, but                your needs and planning for the tax effective dis-
the legal obligation to support a spouse may still               tribution of your assets upon your death.
exist without any agreement being in existence
and without any support payments being made at                   Power of Attorney
the time of your death. If you fail to make ade-                 A power of attorney allows you, during your
quate provision for a spouse or a former spouse in               lifetime, to give another person the authority to
your will, that spouse may make a claim against                  act on your behalf in certain situations. In estate
your estate and inflict a whole new series of                    planning, this document is used to plan for inca-
headaches upon your surviving spouse. All of                     pacity resulting from accident or failing health.
these issues can and should be discussed with                    When you give another person a Power of
your lawyer.                                                     Attorney, it can be unlimited or limited.
     Finally, it is important to consider the subject            Essentially, you decide how much “power” you
of insurance and pension designations. These                     feel comfortable giving to another.
assets will pass outside your estate when you name
a specific beneficiary.                                          Will
     So, as part of your estate planning, you need to            A will is a document that sets out your wishes
review all of your pension and insurance designa-                for the distribution of your property upon your
tions to make sure that they conform with your
                                                                 death. There are certain rules and requirements
present needs. If your new will refers to these
                                                                 for a will to be valid. If you do not make a will or
items, it is important that they say the same thing.
                                                                 if your will does not meet the legal require-
     There is a remedy for almost every situation
                                                                 ments, provincial laws will determine how your
that arises — and the peace of mind that this reso-
                                                                 property is distributed.
lution will bring is bound to provide a better foun-
dation for your new relationship.
                                                                 This glossary was taken from the Nelligan
                                                                 O’Brien Payne Estate Planning Guide.
John Johnson is a partner with the law firm of
Nelligan O’Brien Payne (www.nelligan.ca) with
offices in Ottawa, Kingston, VanKleek Hill and
Alexandria.
                 November 2004 - Fifty-Five Plus • Eastern Ontario Region Page 21 www.fifty-five-plus.com

								
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