Family finances can be a big issue in any circumstances. It’s even more significant with blended families, where two sets of often well-established financial histories and philosophies try to merge into one.

Kiplinger’s recent article entitled “Yours, Mine and Ours: A Checklist for Blended Family Finances” says that a blended family is one where people have remarried, either after a divorce or the death of a spouse. Sometimes it’s older couples already in retirement. In other cases, it’s a younger couple still trying to raise children.

Regardless of the specifics of any individual situation, when families blend, so do their finances. That is when things can get problematic if careful planning and communication don’t occur.

Here are a few things to consider:

Money Habits

People are raised with different ideas about money. They’re influenced by their parents or by the circumstances of their formative years. Some people are exceptionally frugal and save every penny and seldom, if ever, splurge on something just for fun. Others spend with reckless abandon, unconcerned about the unexpected expenses that life can throw at them at any moment.

Many people are somewhere in between these extremes. If you are entering a serious relationship, you should speak to your new partner about how each of you approaches spending money.

Financial accounts and bills

Once you learn each other’s financial philosophy, you will have decisions to make. These include whether to blend your financial accounts or keep them separate. If the two of you are closely aligned with your finances and how you approach spending, you may want to simply combine everything. If you’re older, have adult children from prior relationships and are more financially established, you may decide to keep things separate.

For many, a hybrid approach may be best — keep some things separate, but have common savings, investments and household accounts to reach your blended goals.

Family. When there are children from a prior marriage — especially young children — additional financial situations will need to be addressed. Issues of child support and how it fits into the overall budget is one concern, as is the status of college funding for the children.

Estate Planning for Blended Families: Protecting Everyone You Love

One of the most sensitive, yet critical, areas of planning in blended families is deciding how assets will be distributed. It’s not just about making sure your spouse is provided for — it’s about being clear and fair with children and stepchildren from previous relationships. Wills, trusts, powers of attorney, and healthcare directives should all be updated to reflect your current family structure. Without this, you risk leaving loved ones out or unintentionally creating conflict. Having open discussions and working with an experienced estate planning attorney can ensure your legacy supports everyone you care about.

A thorough estate plan designed specifically for blended families will address these issues and find a suitable solution for estates both big and small.

Talk to an experienced estate planning attorney to make sure you have the plans for your blended family set up the way you wish.

Successfully managing blended family finances isn’t about perfection — it’s about proactive, honest communication and building a financial foundation that reflects your unique family story.

Reference: Kiplinger (June 27, 2022) “Yours, Mine and Ours: A Checklist for Blended Family Finances”