Financial Steps to Take When Blending Families: Before and After “I Do”

Blending families can be a joyous yet complex process; bringing together different dynamics, new financial considerations, and the emotional adjustments. Whether you’re newly remarried or preparing to tie the knot, here are essential steps to ensure a smooth transition before, during, and after blending your families, along with considerations for the future.

Before You Say “I Do”

1. Open Communication:

• Discuss Financial Histories: Have an honest conversation about your financial histories, including debts, assets, credit scores, and spending habits. Transparency builds trust and sets a foundation for future financial decisions.
• Set Joint Financial Goals: Align on financial goals such as saving for retirement, purchasing a home, or funding children’s education. This alignment helps in creating a unified financial plan.

2. Legal Preparations:

• Prenuptial Agreements: Consider a prenuptial agreement to protect individual assets and clarify financial expectations. This can be especially important if either party has significant assets or children from previous relationships.
• Estate Planning: Update your wills and estate plans to reflect your new family structure. This ensures that your assets are distributed according to your wishes and provides for your children.

3. Create a Budget:

• Joint Budgeting: Develop a joint budget that accounts for household expenses, children’s needs, and shared goals. This helps manage day-to-day finances and avoids conflicts over money.
• Emergency Fund: Establish an emergency fund to cover unexpected expenses. This provides financial security and peace of mind.

After You Say “I Do”

1. Combine Finances Thoughtfully:
• Joint and Separate Accounts: Decide whether to maintain separate accounts, joint accounts, or a combination of both. This can provide flexibility while ensuring transparency in financial management.
• Update Beneficiaries: Update beneficiary designations on life insurance policies, retirement accounts, and other financial instruments to reflect your new marital status.

2. Address Debts:

• Debt Management Plan: Create a plan to manage and pay off debts, including any outstanding obligations from previous marriages. This helps in maintaining a healthy financial relationship.

3. Review Insurance Policies:

• Health Insurance: Evaluate your health insurance options to choose the best coverage for your blended family.
• Life Insurance: Ensure adequate life insurance coverage to provide for your family in case of an unexpected event.

As You Grow Older Together

1. Retirement Planning:
• Joint Retirement Goals: Revisit your retirement goals periodically and adjust your savings plan as needed. Consider the retirement needs of both partners and any dependent children.
• Investment Strategy: Develop a diversified investment strategy that aligns with your risk tolerance and long-term goals. Regularly review and adjust your portfolio.

2. Estate Planning Revisions:

• Update Estate Plans: Periodically review and update your estate plans to reflect any changes in family dynamics, such as the birth of grandchildren or the passing of a family member.
• Trusts and Guardianships: Consider setting up trusts and appointing guardians for minor children to ensure their future is secure.

3. Financial Education for Children:

• Teach Financial Literacy: Educate your children about financial responsibility, budgeting, and saving. This prepares them for their own financial futures and fosters healthy money habits.
• College Savings Plans: Establish and contribute to college savings plans, such as 529 plans, to support your children’s educational goals.

Blending families requires careful planning and open communication when merging lives and finances. By taking proactive steps before and after saying “I do,” and continually revisiting your financial plans as you grow older together, you can build a strong, unified financial foundation for your blended family. Remember, the key to success lies in transparency, collaboration, communication and regular review of your financial goals and plans.

If you need personalized guidance on blending finances and planning for your future together, download our complimentary guide planning for remarriage or book a consultation today.

Need further financial guidance?

Book a complimentary no obligation call and we can discuss a plan to help you move forward with confidence. 

Donna understands first hand that life has many transitions. Having been widowed suddenly at age 40, reinventing her career, and blending her current family, she understands these unique needs and can give you clarity for moving forward!

Donna (Sephton) Kendrick, CFP®, CDFA®

This blog is designed to provide accurate and authoritative information on the subjects covered. It is not, however, intended to provide specific legal, tax, or other professional advice. For specific professional assistance, the services of an appropriate professional should be sought.

A diversified portfolio does not assure a profit or protect against loss in a declining market.