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Dave Sassaman has his kids, Natalie and Nicholas, three days a week and every other weekend. Jennifer Sassaman has her son, Kaden, during the week, every other weekend and for half the summer. Both parents divvy up vacation time and holidays with the kids' other parents. Jennifer cares for all three children after school.
Welcome to the world of blended families, where the calendar is king and the soccer shoes are always at the other house. More than ten million kids live with a biological parent and a stepparent, according to the Census Bureau. In almost half of stepfamilies, each parent brings one or more kids to the mix. Most of those parents go on to have children together.
That makes for a complicated day planner, not to mention group dynamic. But the challenges don't stop there. When two families join forces, "there's a financial implication around every corner," says financial planner Tim Maurer, of the Financial Consulate, in Lutherville, Md. Issues include everything from where all of you will live to whose kid gets to take the car to college.
The good news? "You don't have to have everything worked out within the week," says planner Brian Jones, of CJM Wealth Advisers, in Fairfax, Va. "You have the rest of your life to figure this out." Still, you have the best shot at meshing families and finances if you talk through the plan before the wedding and revisit it regularly. Here are topics to consider before and after quaffing the champagne.
DRAW UP A PRENUP
The Sassamans, of Portland, Ore., took a cautious approach to their new enterprise. Before they married four years ago, they attended a parenting class to ensure that they would be on the same page in raising Natalie, now 11, Nicholas, 8, and Kaden, 8. They also discussed drawing up a prenuptial agreement but decided against it. Says Jennifer, "We didn't want to go into the relationship not trusting each other."
Fair enough, but a prenup can help you sort out your finances regardless of whether your marriage ends in divorce after six months or with the death of one spouse after a long, happy union. Not only does a prenup spell out what each of you owns and can expect if you end up single again, but it also lets one spouse waive rights to any property -- say, a family business or an investment account -- that the other wants to preserve for his or her kids. Without a prenup, state property-division law bestows a share of the marital property on the other spouse, no matter how the marriage ends.
Before Jaymi Davison, of Seattle, married her husband 16 years ago, they drew up a prenup that put their respective assets in several pots, including one that held a college fund for his two sons and another that set aside money for their future children. "It was a framework for the goals we wanted to accomplish," she says. The couple later had two daughters, whose education will be covered before any inheritance gets divvied up.
If you decide to go the prenup route, you'll each need a lawyer to represent your interests, for which you'll pay a total of $2,500 to $10,000, depending on where you live and how complicated your affairs are. Sign off on the prenup well before the wedding. Otherwise, a judge might conclude that one of you was pressured and refuse to honor it.
ORGANIZE ACCOUNTS
Never got around to discussing the p word? You could always ask your spouse to sign a postmarital agreement, although you each have less leverage with the other once you have tied the knot. If you don't want to put the plan on paper at all, you may be able to preserve assets for yourself or your children by keeping the property you acquired before the wedding separate from the marital mix. The definition of "separate," however, depends on state law and maybe the courts. Research how your state interprets separate and commingled property, or check with a lawyer.
Many blended families establish a joint household account and joint savings for their life together and keep other accounts separate. The Sassamans started out with separate bank accounts but eventually concluded that the process was unwieldy. "If she needed to get more things, I'd have to write a check from my account to her account," says Dave. Eventually, they created a single fund for household expenses. "Now we just talk about what needs to be paid," he says.
POSTED BY: secondwivesclub.com (July 15, 2008 06:45 AM)
This is some of the best advice I have read on remarriage and finances. If only more couples (married or co-habitating) would follow this advice. The divorce rate for remarried couples is high and therefore it is even *more* important to plan and protect yourself.
POSTED BY: Dan Snell, President (July 15, 2008 02:09 PM)
Three Cheers for Kiplinger ! Thanks for the attention to the fastest growing demographic in America, the Blended Family.
Agreed that an 'up front and out front" reality check should be done as to family finances and planning. Finances are often a major challenge in blended families, as in any family.
At the American Blended Family Assn. (ABFA) we are working with states to 'encourage'...special pre-marital/pre-blended family education. This includes a financial piece and checklist...We advocate for legal system fairness and equity. Your article is a good example of how to set in place a foundation for a strong and solid marriage and family. ABFA seeks to reduce the 70% of re-marriages that statistically fail, and cut that to less than 40%. Part of that is through prepared hearts, minds and pocketbooks. ABFA is about coaching and mentoring and leading a family to success. Our future as a nation - and the 40+ million children of divorce - is depending upon leaders who will educate and advocate. With a full third of our nation in stepfamily scenarios our 'clarion call' must be to see that children grow up with a clear view of 'how to succeed'.
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