Blended families have an opportunity to launch new relationships and traditions, but they often face pitfalls where finances are concerned.
Did you know that about 1,300 new stepfamilies are created every day? That’s from the Stepfamily Foundation, and the Pew Research Center says 41% of all Americans have at least one step-relative.
The Miami (OK) New-Record’s recent article, “4 tips to resolve financial concerns in stepfamilies,” provides some tips and answers for issues within stepfamilies.
- Types of accounts should be defined. A major issue for stepfamilies can be how to split finances into “yours,” “mine” or “ours.” Any combination of accounts can be just fine, but spouses should clarify the rules at the start to avoid confusion. Financial circumstances can change, so couples should review their program regularly to make sure that they have the best approach for their situation.
- Keep documents up-to-date. After remarrying, review the beneficiaries of life insurance, pensions, and other financial accounts. It is also important to create or update a durable power of attorney, living will or a healthcare proxy to name a person to make decisions, in case of incapacity.
- Modify your will. Inheritance issues can make children and spouses concerned about their financial futures. With that reality, a newly remarried couple should draft wills and revise any existing wills to address important estate planning issues. Wills must state, as specifically as possible, what each beneficiary will inherit. This helps minimize potential squabbles among siblings and also between the surviving spouse and children from an earlier marriage. Step-children aren’t usually considered your legal heirs, so they may not inherit if you pass away without a will containing specific provisions for them.
- Speak to professionals. A CPA and an experienced estate planning attorney can show you the best options for your circumstances. This may include life insurance or a trust to ensure that the needs of all beneficiaries are met.
Reference: Miami (OK) New-Record (May 20, 2017) “4 tips to resolve financial concerns in stepfamilies”