Over the next few months, I’m going to attempt to tackle some difficult subjects relating to your finances. Please let me know if there are topics you’d like to learn more about.
This first one is about your relationship with money and protecting your assets in a blended family. I have firsthand experience with this one, both personally and helping clients navigate this issue.
You’ve found a second or third love, and you are making plans to join your families together forever. Talking about money and assets is never an easy thing to do, and you’ve been putting it off. How is the best way to broach the subject and what should your objectives be?
If this is someone you love and trust, that’s the first step. If you find the topic scares you, then step back and look more closely at your relationship. Anyone you are planning on marrying, or even living with, should be someone you trust to have your best interests at heart (as you do theirs), and you should be able to talk openly with love about your money situation.
You should have shared with each other what your assets and debts are and what financial obligations you may have to a former spouse or minor children. Even after those relationships have been dissolved, the financial obligations will remain, and should be considered first. As you are planning your joint budget, remember to take them into consideration.
Next, is one of you a saver and the other a spender? How does that make each of you feel and what problems may arise from those tendencies? How might you help each other, and what boundaries need to be set?
What if one of you has considerably more assets coming into the relationship than the other? Should you have a Prenuptial Agreement to protect those assets should the relationship fail? Do you plan to divide the assets evenly between children from both prior relationships, or do you want them to be passed down to just your children/grandchildren? This is a conversation to have before the wedding. Make sure both of you are on the same page, and there are not any misconceptions. If you or your future spouse plans to keep those assets for their prior children, they will need to be kept separate, and not comingled with the new spouse. An attorney can assist you with the details in how to make sure the assets are kept intact.
What about bank accounts? Are you going to keep your own, or join them together? What are the pros and cons of each? Joining your checking accounts may give you a feeling of solidarity as you are working together to build your financial lives. Keeping them separate may give you a feeling of security that you have sole control over your money. Both approaches should be discussed openly prior to the marriage.
What if you’re reading this and you’re already remarried and haven’t ever had this talk? Plan an evening alone, maybe with a glass of wine, and have the talk. Money issues are one of the leading causes of relationships dissolving, and I find most often it’s a lack of communication. If you talk about it, and maybe even involve a neutral third party, you can work through your deeply embedded money scripts. Your partner wasn’t raised the same way you were, has very different life experiences, and almost certainly approaches their money different than you do. Acknowledge that and work together to peel back the layers of your individual relationships with money. I think it can be very helpful to employ a counselor that can help if there are serious disconnects between you around money.
I wish you the best as you begin this new and exciting relationship. Honest and open dialog around money can be the cornerstone of a wonderful and lasting future together.