Financial and Estate Planning for Blended Families

A new paper in the Journal of Financial Planning helps financial advisors and estate planners navigate blended family dynamics

August 16, 2022

A recent paper published in the August 2022 issue of the Journal of Financial Planning aims to help financial advisors and estate planners navigate potentially tricky issues when it comes to planning for blended family dynamics.

Since nearly 50% of Americans come from a blended family, planning for blended families has never been more important. As an estate planning law firm, The Taormina Firm works closely with financial advisors to ensure that their clients' estate planning needs are fulfilled. The paper states that for "financial planners to successfully navigate the complexities of a blended family in the estate planning process, it's helpful for them to understand the psychology of money and family systems." In particular, the paper outlines strategies for financial and estate planners to navigate these possibly muddy waters in a respectful way so as to avoid conflict.

One technique includes creating diagrams to help make sense of the family dynamics. These diagrams should show how the family came together, what asset each client has, what liabilities (i.e., divorce settlements) are outstanding, and whether the couples shares assets jointly or keeps separate accounts.

Another technique is for advisors to create role-playing scenarios to help modify or enhance their interpersonal skills with their clients. The first step in this technique is to identify the situation. This "lays the ground rules for the discussion and the goal of gaining a better understanding of what goals the clients hope to achieve." The second is to have the clients state their respective positions as on what they want to achieve. From there, the clients switch roles (each taking the other's viewpoint) and discuss the scenario from the other's perspective. The fourth step is to explore solutions based on the role-play between spouses. Then, once each of the client's positions are made clear, the advisor can give recommendations to both to achieve their end goals.

This is just a simple overview of the article. You can read the full article here and determine whether or not it would help you implement a process for representing the interests of blended families.

Van Cleve, Mikel, and Bradley Klontz. 2022. “The Psychology of Estate Planning with Blended Families: How Financial Planners Can Better Help Blended Families Develop an Estate Plan That Works.” Journal of Financial Planning 35 (8): 74–88.

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