13 Jan Lesson Learned: The Complexity of Blended Marriages
Blended marriages and families are becoming more and more common. I know this firsthand. After my parents divorced, they both decided to get married again to other people. On my mother’s side, I have two stepbrothers and a stepsister. On my father’s side, I have multiple steps and half brothers and sisters. (My father remarried a couple of times.)
Over my many years of financial planning, I never took into account all the problems that can come up regarding blended families. So I want to share this story with you to help you make better decisions and simplify your life.
Mrs. V. was an older client of mine who lived alone in a small condo. Since her house was right behind my office, I would walk over, and we would meet at her kitchen table to discuss her finances. At one point, she wanted to change her beneficiaries on her account. So we took care of that for all of her accounts. She had eight beneficiaries; two were her daughters and the other six were her stepchildren.
A year after we changed her beneficiaries, Mrs. V. passed away. After her death, I was stalked by one of the beneficiaries until all the proceeds were paid out. Every week, this gentleman stopped by the office without an appointment wanting to know where the money was at and when they could expect to receive the proceeds. He reasoned that he was the point person for all the out of town relatives. With eight beneficiaires, we required all eight people to sign paperwork to transfer the assets properly. Finally, all the assets were transferred.
A few weeks after everything was settled, I received a call from one of Mrs. V.’s daughters. She explained to me that she wished her mother never had any money and that her stepbrother had created a lot of trouble as a result of receiving this payout. She stated that her stepbrother hadn’t spoken to her or her mother in at least 10 years and that he was only looking out for his own interest. He wanted to ensure that every item in her house was sold and split 8 ways.
The Problem
The major problem was that Mrs. V. never expressed her financial wishes to her children. If she had told her daughter that everyone would be receiving one-eighth of all the proceeds, settling the estate would have been much smoother.
The second problem that happens too often when money is involved is that family relationships are ruined. I hate seeing families become divided because of financial matters. Dealing with the death of a loved one is stressful enough without having to deal with disagreements or confusion about the money.
The Solution
If Mrs. V. had written out a plan, chosen an executor, and explained her wishes upon her passing, the burden and stress for the family would have been considerably less. At least every other year, I recommend that people review their estate plan and beneficiaries and disclose to their family what their wishes are. This helps avoid additional stress for everyone after the death of a loved one.
