The unique financial planning needs of blended families

Joining families means joining finances too.

Article published: February 13, 2024

It’s estimated that 40% of families in the U.S. are blended – where at least one of the partners has been married before and brings children into their new relationship. It’s a very common situation – figuring out what’s “yours, mine and ours” – but one that comes with its own unique financial planning challenges.

Whether one or both partners have been previously married, widowed or single, or one or both of you are bringing children into the new relationship, everything is about to change.

Whether one or both partners have been previously married, widowed or single, or one or both of you are bringing children into the new relationship, everything is about to change.


The good news is that working with an experienced financial planner can help you navigate those tricky conversations.

Four topics to consider when blending families

1. Home is where the heart is

But you’ll also need to figure out where you’ll live. Are you each selling your old houses and buying a new one together? Will one of you rent out your current home? How will each partner’s tax situation impact these decisions? Is one of you moving from a common law state to a community property state?

2. Everyday money matters

Different approaches to money management can be a stealth source of stress in a relationship, especially when one partner is a saver and one is a spender. Will each partner keep some separate accounts and merge others? Do you each have differing spending styles? How are you managing investments, brokerage accounts and retirement accounts, like 401(k) plans and IRAs?

On a related note, debt can be another sensitive topic. Do either of you have significant debt or credit issues? Are either of you paying child or spousal support, or in a tricky custody situation that is ongoing? How do you plan to title your joint assets, and how do you protect yourself in the events your spouse gets sued or owes creditors?

These conversations can be emotionally volatile areas to explore – to the point where not talking about them at all can cause major relationship issues down the line. But wealth planner Michelle Muhammed says, “Working with a financial planner who is committed to helping you find financial success as a couple can go a long way and help you see things objectively rather than emotionally.”

3. Children and parents

Does the term “sandwich generation” apply to you? Very likely. Many couples are supporting children while caring for their parents – and creating a blended family can double the number of responsibilities. That’s why it’s so important to come to an agreement upfront about how you plan to make decisions and contribute financially. Who is paying for college or contributing to a 529 – will you contribute to your stepchildren’s educations? After their educations are completed, do you still help support your grown children or your partner’s grown children?

Similarly, does one of you (or both) have aging parents? What are the expenditures on their care and housing? Are you going to share the responsibility for the long-term care of your partner’s parents?

4. Estate planning

“Estate planning and the conversations about wealth transfer are really important with blended families,” says Erin Smith, a director of estate planning. “Remember, estate planning is not just about a will.”

The first stages of estate planning as a new family might involve debating the sensitive topics of prenuptial agreements and considering the implications of living in a community property state. Next, you need to name guardians, health care proxies, agents or those with power of attorney in the event something unexpected incapacitates one or both of you. Who do you want making those important decisions? Your adult children or your new spouse? “Regardless of the answer, communication is key,” says Smith. “If your new spouse will be making health care decisions on your behalf, be sure to let your kids know.”

Finally, working on legacy planning – in other words, who gets what – is the final tier of a robust estate plan. As mentioned, prenuptial agreements can be a prickly topic, but they are important and effective tools when combined with a solid estate plan. They can help protect your children from unintended disinheritance in the event of your unexpected death, for example. “It’s also important to have a frank discussion with any adult children from your former marriage or partnership,” says Muhammed. “You can help relieve unnecessary tension or concern they may be feeling if they think they will lose expected inherited money or the family home. This is a particularly important topic to address if their other parent has died.”

These are all questions a financial planner can help you navigate, and they can work with your other professional partners like accountants and estate attorneys to help map out your road to financial wellness as a new family. While having these conversations might not be easy, it’s far better to tackle them head-on before you start your new life together, than to have to wade through unpleasant surprises and scenarios down the road.

The information regarding estate planning should not be construed as tax or legal advice and is for general informational purposes only.