Blended families are almost the new normal in America. A Pew Research Center analysis shows that as many as 40% of all new marriages include at least one person who had been married before. For another comparison, in 1960, 13% of all married adults had been married before, compared to 23% today.
In a blended family, one or both spouses have at least one child from a previous marriage or relationship. Financial and legal challenges are more complicated, as are the family dynamics between parents, step-parents, siblings and step-siblings.
CNBC’s recent article, “4 ways to help blended families navigate finances,” 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. 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. If you don’t have an estate plan, now is the time to have one prepared. If you have one, it needs to be updated to reflect the new marital status. In addition, all accounts with beneficiary designations should be updated.
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.
The divorce rate for blended families is a bit higher than it is for first families, so the spouses need to devote time to understand the many moving parts and navigate them together. Dedicating time for discussions—early and often—about finances and parenting can take the couple and the children through the challenges.
Reference: CNBC (November 23, 2019) “4 ways to help blended families navigate finances”