Blended Family Financial Planning

Blended families are becoming increasingly common in the United States. In fact, blended families now outnumber traditional families, according to the U.S. census bureau! Rising divorce rates are not the only reason – our longer life spans mean that many more people are outliving their spouses and remarrying. If this sounds like your family, welcome to the new form of family life!

Falling in love again and joining two families can be an exciting time for many blended families. However, those who have ventured down this path know that the new family structure needs to be built on a strong foundation of openness, mutual respect and honest communications. Adopting the same approach to finances is even more critical within blended families. The #1 cause of divorce in the U.S is “money”…and that is even more so within blended families.

While blended families are extremely commonplace today (over 50% of U.S. families), the financial implications (and risks) for you are your children increase exponentially! Serving Austin since 1999, we help families develop financial solutions to sensitive issues.

“Potential Pitfalls” and Financial Issues

Money Conflicts

Money Philosophies – I’m a “saver”, my spouse “lives for today”!
Debt – I hate debt! My spouse can’t seem to stay out of it!
Investments – I’m a conservative investor, my spouse thinks Las Vegas is an investment strategy!
Income Discrepancies – My spouse is the family bread winner …I feel powerless!
Uncertainty – We never discuss our finances and I’m worried about the future!
Pre or Post Nuptial Agreements – What’s the deal with these agreements?

Financial Risks & Estate Planning

Separate Property Issues – I came into the marriage with significant assets. How do I protect my assets without creating issues with my spouse?
Assets – How will my assets “pass” and to whom when I die? (You may be surprised!)
Children – Who will be financially responsible for my children if I die? How should I protect and provide for my children if something happens to me?
Wealth Transfer – What happens if my beneficiary elections on retirement accounts, annuities and life insurance are not updated or correct?
Inheritance – What happens if I receive an inheritance during the marriage?
Creditor & Asset Protection Issues – What if I (or my spouse) am sued? What if I (or my spouse) have serious creditor or bankruptcy issues?

Financial Goals & Lifestyle

College – My spouse has a college savings fund for his/her children and I do not…what to do?
Retirement – I contribute to my retirement account and my spouse has a company plan, how do we approach “retirement planning”?
Lifestyle – How do we balance the discrepancies in our incomes and our budget with the lifestyles we both want?

Getting Started – “5 Steps to Financial Harmony”

As you can imagine, with many blended families there is a very large elephant in the room when it comes to discussing money and personal property – especially when a family has the trifecta combination of “yours,” “mine” and “ours”.

While the inherent desire is often to “keep things fair”, “not create a rift in the family” and “protect our loved ones”, most families simply do not understand all the issues, the questions to ask and certainly not the potentially devastating implications of not having an effective “Blending Family Financial Plan”. How do you protect and provide for loved ones in regards to legacy planning and financial security?

To get started, focus on these “Five Steps”:

Lay your cards on the table (open and honest disclosure & discussion)
Discuss your philosophies on saving, spending and investing
Establish some mutual financial goals
Agree on roles & responsibilities
Protect your future

Taking the Next Step!

The good news – there are many effective financial and estate planning options which address your concerns and provide solutions to your financial situation! These options offer families the flexibility to tailor a plan to their specific needs and situation – you are not constrained to a “one size fits all” approach to blended family planning! Since legal documents, tax issues and strategic vision & planning are most certainly involved within this process, hiring professionals with extensive experience and knowledge with blended family planning is essential!

Family Trusts
Wealth Transfer & Wealth Replacement Trusts
Life Insurance Trusts
Surviving Spouse Trusts
QTIP Trusts
Dynasty Trusts
Separate Finances Plans
Beneficiary Structuring
College Planning for Divorced & Blended Families
Pre and Post Nuptial Agreements
Separate Property Planning

Whether your goal is to take care of a surviving spouse without disinheriting your heirs, or, develop a “fair” and sensible plan designed to meet your legacy wishes and protect for your loved ones, we can help!

For more information about Blended Family Financial Planning, call us today!