The blended family is a family dynamic that is increasingly common, which can make addressing financial issues much more of a challenge. In a blended family, one or both spouses have at least one child from a previous marriage or relationship, and together they create what’s known as a new combined family.
CNBC’s recent article, “4 ways to help blended families navigate finances,” reports that a staggering 63% of women who remarry come into blended families, with 50% of those involving stepchildren who live with the new couple, according to the National Center for Family & Marriage Research.
The issues in a blended family can be demanding, so couples often delay having the “money talk.” This is an important piece of the family financial puzzle. We’ll look at some of the ways you can work on that puzzle, and see our website for more https://www.galliganmanning.com/estate-planning-life-stages/estate-planning-for-blended-families/:
- Get expert advice from your Estate Planning Attorney. Talk to an estate planning attorney about the specifics of your blended family situation. It is important that both spouses discuss how their separate and joint money will be used, both while they are alive and after they pass away. This includes whether the spouses want to leave their assets for the children from their prior relationships. It is also important to discuss the role the children will have in your estate plans so that you can avoid disputes between them.
- Create a plan for merging relationship and money. Understanding the role money plays in combining two families is critical to the success of a healthy blended household. A basic step may be to draft a detailed plan of how the couple is going to care for one another in their marriage and in their family, in addition to how they will care for one another’s children. Try to determine the ways in which money plays a role in coming together. The more you can communicate and the more that you can exhibit a united front, even from a financial perspective, the stronger a couple will be. This may include considering either a prenuptial or postnuptial agreement detailing how your assets will come together in the combined family.
- Collect documentation and monitor your money. It’s good to understand the work involved with the preparation and paperwork after divorce and remarriage. You’ll have a divorce decree or a domestic partner agreement, as well as instructions on child support and alimony. You also need to keep track of all the different financial accounts.
- Discuss your financial issues regularly. Ask about the financial obligations to the ex-spouses. Make sure both spouses understand if there’s child support and/or alimony, as well as responsibility for paying for housing or their utility bills.
Although these issues may be demanding, they can be successfully navigated with frank, open discussion and the advice of trusted advisers. If you are in a blended family, please contact our office for a consultation on how these issues may be addressed in your estate plan.
Reference: CNBC (November 23, 2019) “4 ways to help blended families navigate finances”