Financial Planning for My New Blended Family?

Financial Planning
Statistics show blended families are on the rise. About 40% of all new marriages in the U.S. include at least one person who was previously married, according to a Pew Research Center analysis. Among adults who are presently married, roughly a quarter (23%) have been married before, compared with 13% in 1960.

The blended family is a family dynamic that is increasingly common, which can make addressing financial planning issues much more of a challenge. In a blended family, a 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 financial planning and having the “money talk.” This is an important piece of the family financial puzzle. Let’s look at some of the ways you can work on that puzzle:

  1. Get expert advice. Talk to an estate planning attorney about the specifics of your blended situation and the financial planning it may require.
  2. 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.
  3. 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.
  4. Discuss your financial issues regularly. First, 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.

Reference: CNBC (November 23, 2019) “4 ways to help blended families navigate finances”

Suggested Key Terms: Estate Planning Lawyer, Asset Protection, Tax Planning, Financial Planning, Blended Family

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