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Blended, separate finances
Experts say couples heading into a second or third marriage need contingency plans to make it work.
Families and finances

Blended family finances need scrutiny

No matter how your second family comes together, there's a lot of work to be done before you start picking out china patterns.

Starting, for instance, with some of these common questions:

  • How will the household bills be divided?
  • Is someone paying spousal or child support? How will that impact everyone in the new household?
  • Will the standard of living be set according to the person who brings the most money in?
  • If so, how long will it be before resentment sets in because that person is paying for everything?

Discussing every dark detail of your financial life before embarking on a second or third marriage will make your lives easier and help your marriage succeed.

Blended family issues
  • Unequal footing.
  • Prenuptial agreements.
  • Separate accounts.
  • Estate planning.
  • Insurance solutions.
  • Working together ...
  • ... Or staying apart.

Unequal footing
It's better to tackle money issues before walking down the aisle rather than realizing six months after the honeymoon that you've been indirectly putting your spouse's kids through college by paying all the household expenses. Meanwhile your spouse's income goes to the ex and their kids' expenses.

It's not an unusual situation, says Jeannette Lofas, Ph.D., LCSW, founder and president of the Stepfamily Foundation.

"That happens a great deal of the time," says Lofas. "She doesn't directly pay the bills for college, but for everything else over time -- the lights, the mortgage, vacations. Essentially she is putting his kid through college," she says.

The solution? Lofas suggests putting it in writing that both parties acknowledge the imbalance and a plan to pay back the money.

"If she is donating money for his kids' college, we encourage them to write out a loan agreement, with him saying that he will pay this money back," Lofas says.

Before it comes to that, couples should know what each party is bringing into the marriage -- both assets and liabilities.

And that can mean a prenuptial agreement.

Prenuptial agreements
Prenups do more than protect the rich half of the couple from the grubby hands of the less-well-off partner. They document income, liabilities and assets of both partners and should protect both their interests. The groom and bride each need a lawyer to represent them.  

Lofas suggests that the future husband and wife meet with a mediator experienced in working with stepfamily relationships.

In her practice, the prenuptial agreement spells out not only financial obligations, but domestic duties as well. The details are hashed out and then sent to lawyers to finalize.

"Our prenuptial has to do with money, but also has to do with the responsibilities in the house. Like when my child comes over, I expect you to be here in the morning, you have to have lunch with us, whatever. We take it all the way down to who makes the bed, who takes out the garbage, who waters the plants. None of that is enforceable, but if they negotiate then somehow it becomes a reality," says Lofas.

-- Posted: July 21, 2009
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