Couples planning to blend families often have to make financial arrangements that respect previous relationships with ex-spouses and their families. Issues range from childcare and eldercare to potentially complex matters involving businesses, investment assets and real estate. That’s why involving trained experts in stepfamily financial planning is a must.
Blending families can get complicated quite quickly when dealing with finances and the like, so you should speak with an experienced estate planning attorney on these matters.
The Kenyon Leadergives us a nice checklist of issues and solutions potential spouses and partners should consider in a recent article titled “Yours, mine and ours: planning step-family finances.”
Couples planning step-families, more than those marrying for the first time, need to share personal information with a potential impact on finances.
Start with these steps:
- Current credit reports and credit scores. Significant loans, large amounts of debt, or bad credit for one or both partners can hinder future major purchases.
- Assets and liabilities. Both spouses should know each other’s financial assets and liabilities and any potential issues. Are there any debt and credit problems? What if one spouse has more extensive assets? Be sure to discuss how those will be addressed now and later when one or both spouses pass on.
- Legal issues. Disclose any issues involving divorce, child custody, foreclosure, bankruptcy, or other legal proceedings that are pending against either partner or family members.
- Business and estate issues. If there are significant estate or business assets assigned to children, former spouses, or family members, those commitments need to be considered in the context of the finances of the planned marriage or partnership.
Get some professional expertise. Beyond this, it’s essential to have qualified professionals who have specific expertise with blended families and their unique issues.
Make a new estate plan. This is a perfect time to review money issues, even if you have your own separate estate matters in order. Step-family issues restart the planning clock on everything. You may have a great retirement all set, but if your future spouse hasn’t, you’ll need to review your strategies so you can retire comfortably together.
Money issues complicate all relationships, but step-families have their own special planning needs that should be discussed and settled before the marriage and not thereafter.
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Resource: The Kenyon (MN) Leader (December 29, 2014) “Yours, mine and ours: planning step-family finances”