Blended Families, Blended Finances: What Stepparents Need to Discuss

Should we combine some or all of our accounts? 
Whether or not to combine assets is likely one of the first tough financial questions you’ll tackle as a new couple, and there’s no right answer. Monica Dwyer, a certified divorce financial analyst and wealth advisor at Harvest Financial Advisors in West Chester, OH, says the decision depends on each individual’s income and comfort level with spending. 

For example, if you merge accounts but earn significantly less than your partner, you may feel like you have to justify your purchases or stick to an allowance. You may decide instead to have a shared pot of money plus your own cash. 

Who pays which bills? 
Depending on how many children you each have and how old they are, you may split everything equally. Or you might pay for household expenses like the mortgage and groceries while your spouse contributes to college savings and extracurricular activities for his kids—or vice versa. 

Some couples who marry when the children are very young may take on all their expenses, Dwyer says. But “not everyone can do that, and not everyone can be expected to do that,” she points out.

Do we spend equally on each child? 
Your financial obligations as a stepparent will need to be decided between you and your spouse, factoring in how much your stepchildren’s other parent is able and willing to contribute. A big difference in the level of child support, for example, could put things off balance. 

But the overarching goal is to avoid money causing resentment amongst stepsiblings. Extra care should be taken if you and your new spouse have children together, or if one partner has much older children from a prior marriage. 

“I think you have to be really sensitive to treating kids fairly,” Dwyer says. “There’s always going to be some kind of unfairness, but if parents are kind of cognizant and try to make it as fair as possible, that helps.”

Do your wills and estate plans match your intentions? 
Make sure to update your estate plan, both by discussing it with your partner and and then actually drawing up any new legal documents required. You’ll want to make sure that all of your accounts, such as your retirement plans and life insurance policies, are updated with the beneficiaries you want to designate. “What people fail to do most of the time is to line up all legal stuff with what their intentions are, and that can be the worst situation,” Dwyer says. “It can tear families apart.”