Thus, a number of situations can lead to economic imbalances in the pair.
- One family moves to the region or abroad to facilitate the career of one of the spouses, and the other stops his career or suffers from long-term unemployment due to difficulties in finding work in a new environment.
- A mother temporarily stops working to care for a young child, while her partner works harder to compensate for financial deprivation. “What widens the income gap between couples is often the appearance of children in the couple,” said Ellen Bello. We know it will take more money. Women will go on maternity leave and find time to take care of their children. Men will work harder. We know that men’s wages increase when they have children. »
- The lowest-income spouse cannot save money because the lifestyle of the highest-paid man spends all his money.
Managing a couple’s financial affairs or their marital status can sometimes change that. For example, married couples are generally subject to a family inheritance regime, which involves the distribution of the value of family inheritance property between spouses, including retirement plans and retirement savings.
However, this rebalancing is not always present. Due to ignorance of the law governing civil marriage, or for various reasons arising from the dynamics of love, the couple’s clients allow financial inequality to persist in their union.
In 2015, together with her team INRS, Ellen Bello conducted a large survey of 3,250 Quebec residents from all regions to find out about their personal financial management habits. “We asked our 1,683 respondents in Quebec civil unions, and 45% believe they have the same social status as married people. This is a mistake. And 4% do not know. In addition, 40% believe (erroneously) that the poorest spouse will have the right to claim child support, and 16% did not know, “- said the researcher.
Among other things, due to the impact of complex returns on long-term investment, injustices may even increase over time, especially since Quebec households often manage their pension funding separately.
According to the INRS survey, 52% of married couples manage their retirement savings on a one-on-one basis, and 48% combine their savings into old age. Among married couples it is 74% and 26% respectively.
In addition, the researcher noted that 58% of women delegate financial management at home to their better half. Women also tend to pay more for non-durable goods such as children’s clothing or groceries.
Risks of financial violence
Now there is the problem of financial abuse by one spouse at the expense of the other, ie abuse of economic power, which limits the welfare of the other. “It’s a taboo subject. But we know that when there is physical violence, it is often economic violence first, “said the researcher.
Because counselors can have a decisive impact on clients’ financial lives, they may be sensitive to signs of abuse, including the following identified by Ellen Bello:
- One spouse mocks the other’s contribution to the household income.
- One spouse saves and the other stops his / her career to take care of the children, especially in the case of a civil spouse without a cohabitation agreement.
- All the money goes abroad to support the family. “We know that many immigrant families send a lot of money abroad to support their families. If all the income of one goes to help the family, it would be interesting to know for which family and whether both agree, because it may limit access to money of the person whose salary is part, “- said Ellen Bello.
- One of the spouses forces the other to participate in the project against his will or without their consent. “Here we have debts that are sexually transmitted, that is, debts that we enter into love, pleasure, but repay through shame. It happens that one of the spouses supports the other for a project to which he did not agree, but does so out of love, “- said the speaker.
- After both spouses reported economic injustice in their marriage, one voluntarily allowed him to continue.
Actions to consider
What to do now if you notice signs of abuse or temporary inequality persists to the detriment of one spouse? Here are suggestions from the researcher and other team members on this issue.
- Encourage both spouses to maintain financial autonomy. This means that everyone has to pay their salary to a personal account. However, according to an INRS study, 28% of couples invest it in a joint account.
- Consider the household in a broad sense. For example, agreeing that the time one spouse spends caring for children is valuable to the whole family because it allows the other spouse to focus on his or her career.
- Involve both spouses in financial decisions and / or meet with them separately. It may be easier to discuss sensitive issues with the client about the dangers of delegating financial matters to the wife, increasing the risk of longevity for women, financial risks in the event of a breakup.
- If one of the spouses loses interest in financial matters, the counselor should get feedback from them, for example, by saying this during a private call, according to Fabien Mayor, a mutual fund representative at CI Assante Wealth Management: this is your family, I want hear from you. »
- Make sure both spouses know what will happen in the event of a breakup (home, cottage, investment, etc.). To do this, the differences between tax and private law, including the consequences of marriage, should be clearly explained. and cohabitation.
- Be sure to watch when the couple is recommended to sign a cohabitation agreement, as less than 5% of couples sign such an agreement. In fact, this type of contract often makes couples think about breaking up, and this dissonance can sometimes prevent them from taking action.
According to Fabien Major, we should present this type of contract as a proof of love, as a pair project to consolidate it. “If a cohabitation agreement is a decision and we procrastinate, we must always return it to the agenda. “I know you said you wanted to fix it. I’ve made a small calendar for you, and here are the steps to get it. I just have a fellow notary who would be willing to take care of your case. ” Our role is sometimes to push a little well, because that is something that can affect our future experience, “he said.
- Ellen Bello also talks about the importance of offering clients options other than a cohabitation agreement, such as marriage. This is perceived not only as proof of love, but often an act that can be relatively economical. “Organize your finances differently, waiting for you to sign a cohabitation agreement. This gives hope that the project will be implemented, but may limit the losses a bit, “she said.
- To reorganize financial affairs, a couple can plan retirement savings differently, treating them as total expenses in their daily budget. Spouses can also reconsider the method of managing daily expenses according to income, for example, by making sure that everyone has a discretionary minimum income that belongs to him and that will not be used to pay for family expenses.
- The relationship with the advisor should be based on trust and lack of judgment, said Ellen Marquis, Regional Director of Tax and Property Planning at CIBC Private Wealth: “It is important for the advisor to include a third party, for example, plans, or professionals in your organization like me that you can present to the client. Often in discussions that are a bit advanced, because the person is a third party, there is confidence that they will not necessarily tell others, “she explained.
To improve the active listening of the expert and the feeling that the clients understand, it may be a good idea to have someone take notes for them, she says.