Step-Family Finance Planning

According to the Pew Research Center, four in ten American adults have at least one step-relative in their family.  While many step-families operate harmoniously, adults often “feel a stronger sense of obligation to their biological family members than they do to their step-kin.”  Because of this, blended family finances can get messy. 

Couples planning to blend families need to make financial arrangements that respect previous relationships with ex-spouses.  Issues range from childcare and eldercare to complex matters involving businesses, investment assets and real estate.  Below is a list of issues and solutions potential partners should consider:

• Credit Reports and Credit Scores.  Extensive loans or bad credit for one or both partners can endanger future purchasing plans for auto, home or tuition. 
• Assets and Liabilities.  Potential partners should k now each other’s financial assets and liabilities and any issues connected with them. 
• Legal Issues.  Full disclosure is essential for matters such as divorce, child custody, foreclosure, bankruptcy, or other civil or criminal legal proceedings.
• Business and Estate Issues.  If partners have significant estate or business assets assigned to children, former spouses or family members, those commitments need to be factored into the finances of the planned marriage or partnership. 

See Jason Alderman, Yours, Mine and Ours: Planning Step-Family Finances, Pleasanton Weekly, Dec. 29, 2014.