If you’ve seen the movie Blended, you’ll recall the chaotic charm that unfolds when two single parents (Adam Sandler and Drew Barrymore) bring their children together on a family vacation. What begins as a mismatched adventure concludes with love, laughter and a brand-new blended family. Real life isn’t always as tidy as Hollywood. For couples blending families; it’s also about ensuring the financial and legal planning is done correctly. That’s why it’s so important for financial planners and family legal practitioners to work together. By bringing both legal and financial expertise together, plans are created that are sensitive to the real dynamics of a blended family.
What is a blended family?
Generally, a blended family is formed when two people, each with children or financial responsibilities from previous relationships, come together to build a new life. Each family is unique. One partner may have adult children, while the other has younger kids. Both might have accumulated wealth they wish to protect. No two estate plans should be identical.
Choosing the right legal foundation
Before you get into financial planning, you need to consider how the relationship itself is structured. This involves understanding the legal implications of marriage or cohabitation and how they affect each person’s assets. In most cases, a marriage out of community of property (with or without accrual) is a good starting point. It allows for assets (and liabilities) to be expressly excluded and protected, especially when there are children from previous relationships. Some couples may choose to just cohabit together under a universal partnership, which also carries financial and legal implications.
Different needs, different plans
One of the trickiest parts of blended family planning is balancing the needs of different dependents. Minors require ongoing financial support. In many cases, an ex-spouse remains a natural guardian, equally obligated to financially maintain the children. Adult children may worry that a parent’s new relationship could affect their inheritance, especially if stepchildren are involved. A stepparent has no legal obligation to maintain a stepchild and vice versa.
This is a critical money moment where clear planning and open conversations, guided by both professionals, help protect legacies.
Keep it fair, keep it clear
Blended family estate planning must address a crucial question: Do you want to preserve your wealth for your existing family, share it with your new one or both? The answer will influence everything that follows. Key considerations include:
Trusts. Useful for protecting assets intended for wealth preservation.
Bequests. Lump sums or specific bequests in your will support a new spouse or stepchildren.
Personal servitudes. If the family home was owned before the marriage, legal tools such as usufructs or other personal servitudes allow a surviving partner to remain there without owning the property, although these require careful wording and legal advice due to tax implications after death.
Beyond the numbers
When a new family comes together, so do their finances; shared homes, new loans, joint expenses or insurance policies – all of which need to be reviewed. Practical planning steps include:
Updating beneficiaries. A will can’t override a policy nomination.
Clarifying property ownership and loan structures. Especially if one partner contributes to the other’s bond.
Using life insurance policies to cover loans. If your new spouse contributes to your home, a policy could repay that contribution upon your death.
The full picture
As financial planners, you need to know when to bring in legal expertise to support your clients’ goals. Building relationships with legal professionals enhances your value and strengthens your role as a trusted financial guide. You can guide blended families through this important money moment, partnering with legal experts to build a legacy that honours both their past and future.
