Financial tips for blended families

According to a Pew Research Center report, more than 40% of marriages in the United States involve at least one spouse who has been married before and 57% of divorced or widowed people remarry. Those remarriages call for specific financial advice, especially when they involve minor children. While we primarily suggest all betrothed couples visit their financial planner ahead of the ceremony to map out a financial game plan, we also offer the following five general tips to help you and your family set yourselves up for success: If your spouse and his or her family will be moving into your house, consider putting it into a revocable trust, which will protect it during your lifetime. Then you can decide who inherits the house. Be careful about deeding the house to your children with the stipulation that your spouse live in it during his or her lifetime. This can become a tricky situation as the inheritors have little control over the maintenance of the asset they own. Create a trust if you want assets that you brought into the marriage to go to your children when you die. With a bypass trust or a Qualified Terminable Interest Property (QTIP) trust, your assets pass to your children, while your spouse can collect income and possibly some principal in an emergency from the trust during his or her lifetime. Consider carefully who you will name trustee, and make sure they are well suited educationally and emotionally for this task. Discuss how you will handle college loan debts. Legally, one spouse isn’t liable for the other spouse’s federal student loans and, if the spouse with the student loans dies, the surviving spouse does not have to pay them back. However, a significant portion of the joint income will be going to pay off that debt, so it is important to discuss plans to pay it down. Also, you need to be very careful… | Read More »