Are blended families becoming the new normal?
The makeup of today's Canadian household has morphed into a web of relationships, changing the way families handle their money, particularly if such blended arrangements come equipped with kids.
Pulling together a family with your new spouse, your spouse's children, and your own can lead to certain issues on the financial front, warns Jean-Rémy Deschênes, a wealth manager with the Desjardin Group.
The issues with blended families are never simple but are easier to handle when everyone is still alive and the documents can be amended.
And while children of any blended family can struggle with stepparents, the feuds between children and their parents’ spouses can be more intense when money is at stake.
The big debate is often fair versus equal. To make the transition as smooth as possible, Deschênes suggests making sure you:
- Have clear legal parameters regarding past spouses
- Draw up a cohabitation contract/agreement, if applicable, that defines the sharing of financial responsibility for family and child-related expenses
- Get life and health insurance that adequately covers all of the new family's needs
- Protect your children and your new spouse by making a will and healthcare mandate in case of incapacity
Those whose spouses are significantly younger, for instance, might consider buying life insurance and naming their existing children as beneficiaries. This way, they won't have to wait for a stepparent to die before having access to the estate.
Are you part of a blended family? Did you sort things out financially before you got together? Or is this still an ongoing process?
By Gordon Powers, MSN Money