You may have noticed that multiple marriages, divorces, step-parents, bonus parents, single parents, and life partners make up numerous households across the country, and provide a second chance for happiness for many. However, navigating the unique financial needs of blended families can be a challenge. There may be children from a previous marriage, stepchildren from a spouse’s previous marriage, and new children together. Having discussions with a trusted advisor regarding investments, estate planning, and the possibility of joining finances is a crucial step toward successfully reaching your goals. Here are a few topics TFG Financial Advisors urges you to consider for financial as well as family harmony:

1. Precautions: Take proper precautions with property like the family home, as well as other large and important assets. Generally, a “pre-nup” executed before marriage defines which assets are characterized as the separate property of one spouse, which becomes communal property, and what happens to the property of either spouse upon divorce or death. Prenuptial agreements are often used to preserve wealth for the children of a first marriage before an individual enters into a second union. It can also include other directives to preserve ownership of future assets, tax elections, and protect income, including future income, that would occur if the marriage dissolved.

2. Trusts: Deciding how to divide assets in your estate plan takes careful thought. A trust holds assets on behalf of one or more beneficiaries and can specify exactly how and when the assets pass to those beneficiaries. Trusts tend to avoid probate, and beneficiaries may receive assets more quickly than when transferred through a will. With a revocable living trust you retain the right to change beneficiaries and distribution amounts. You might transfer assets to a living trust and designate members of your blended family as beneficiaries. A trust does not replace a will, rather it can be used in conjunction with a will. For blended families, certain types of properly established trusts can provide financial support for your spouse while making sure something is left for your children. A TFG Financial Advisor can help you make the decision regarding which kind of trust may be right for your situation.

3. Beneficiaries: Some of the biggest mistakes people can make when determining who will inherit their assets relate to the beneficiary designations of their retirement accounts, other financial accounts and annuities, as well as insurance policies. Regardless of what a will or trust says, the asset goes directly to the designated primary beneficiaries. Leaving a prior spouse listed as a designated beneficiary can cause issues! Be sure to properly update your beneficiaries on important financial documents, and yes, you are allowed to name more than one.

Be sure to have open and honest conversations about money as you merge your households. Your actions will have financial consequences as well as tax implications. Other important issues for you to consider are:

• Where will you locate your new domicile? Will you sell your prior homes and property and buy a new one? Will you rent out your current home? Will you relocate to a different state?
• How will you handle your bank accounts, and financial accounts? Will you combine them, maintain separate ones, or use a combination of the two choices for certain assets?
• How will you manage investment accounts and retirement accounts? You may have different ideas about risk or financial goals, even charitable giving.
• Handling powers of attorney and living wills will need to be addressed.
• Is more insurance needed?

Reach Out To Us: Working with a TFG Financial Advisor can help to make the challenges associated with a blended family easier to navigate. We can educate you on your options and help you choose the best solutions for your individual situation, so your new blended family is as financially supported and protected as possible. Please contact Cory Lyon at clyon@TFGFA.com or at 561-209-1120.

TFG Financial Advisors, LLC, is registered as an investment adviser with the SEC. Registration is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting. All expressions of opinion reflect the judgment of the authors on the date of publication and may change in response to market conditions. You should consult with a professional advisor before implementing any strategies discussed. Content should not be viewed as an offer to buy or sell any of the securities mentioned or as legal or tax advice. You should always consult an attorney or tax professional regarding your specific legal or tax situation. Tax rules and regulations are subject to change at any time. All investment strategies have the potential for profit or loss.

TFG Financial Advisors, LLC, is registered as an investment adviser with the SEC. Registration is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting. All expressions of opinion reflect the judgment of the authors on the date of publication and may change in response to market conditions. You should consult with a professional advisor before implementing any strategies discussed. Content should not be viewed as an offer to buy or sell any of the securities mentioned or as legal or tax advice. It is not affiliated with or endorsed by the Social Security Administration or Medicare. You should always consult an attorney or tax professional regarding your specific legal or tax situation. Tax rules and regulations are subject to change at any time. All investment and insurance strategies have the potential for profit or loss. Information presented is believed to be current. Photos and videos are used for the singular purpose of enhancing the website. None of them are photographs of current or former clients. Hyperlinks on this website are provided as a convenience. We cannot be held responsible for information, services or products found on websites linked to ours.