Posted on 12/28/2011 12:30:28 PM PST by Kaslin
Dear Carrie: I'm about to get married for the second time. I have two kids, 8 and 10, and my fiancee has two teenagers. Everyone gets along well, but my husband-to-be is a lot wealthier than I, and his kids have been raised with very different financial expectations.
It's not that I necessarily expect him to now pay for everything for my kids, but at the same time, I don't want them to feel like they get less because they're less worthy. What's fair in a situation like this? --A Reader
Dear Reader: Even the most compatible couple can have money problems and blending a family can raise even bigger issues. What's "fair" may be different to different couples, so it's crucial that you and your fiancee have a heart-to-heart now -- so that you can find what feels right to the two of you.
Talking it out is especially important because this isn't just about numbers. It's about your feelings and your values -- the "glue" that will hold you together as a family. So be open about your feelings. Trust me, by dealing with all these topics openly and honestly now, you can avoid some real heartache down the road.
Also, you don't mention if your ex-spouses are in the picture. If they are, your situation may be even more complicated, so start talking right away.
START WITH THE TWO OF YOU
Right from the start it's important for both of you to reveal exactly how what you own and anything you owe. Full disclosure is essential!
Next talk about how you'll "marry" your finances. There's no one-size-fits-all formula for everyone, but talk about who will pay for what and which assets you intend to combine and which you plan to keep separate. Just as an example, if one of you owns a home, will the other buy in?
Also discuss accounts. To me, a certain amount of financial independence is a good thing. In fact, I often recommend a "yours, mine and ours" approach so that both partners have some autonomy but also work as a team. It's best if both have the same amount of discretionary money even if one earns more.
And finally, how will you split up the financial chores? It's fine if one of you is more involved in your finances on a day-to-day basis, but you should both be involved in all the big decisions.
TALK ABOUT THE VALUES YOU WANT TO IMPART TO THE KIDS
You say your fiancee's kids have different financial expectations. That's understandable. However, that doesn't mean your financial values are necessarily different. Discuss what you expect of all the kids. Will they get an allowance? Do you want them to contribute to personal expenses or special costs like a car or a school trip? Will you encourage them to get summer jobs?
If you want to be a cohesive unit, I believe all the kids have to be treated the same -- with the same privileges and responsibilities. For instance, you can't buy cars for one set of kids and not the other without creating resentment.
Once you come to an agreement, talk to the kids. They all need to understand what you expect from them and what they can expect from you. It's probably best to do this as a group. Talk frankly about the new relationship, both the personal and the economic, and how you all can work together. Encourage them to express their feelings and make suggestions.
If it's possible, you each may want to talk to your former spouses about the approach you're taking and the values you want to impart. If there's a difference of opinion here, be honest about it with the kids so they don't feel confused.
CONFRONT COLLEGE COSTS
This could be particularly sticky. Once again, if you're really a family, I think the kids have to have the same opportunities. Since your fiancee's children are already teenagers, he may already have their college covered. Is he willing to contribute to your kids' education if necessary? What about your ex? Address this now and come up with a realistic college savings plan to avoid hard feelings later on.
DON'T SHY AWAY FROM ESTATE PLANNING
This is another time bomb that should be talked out now. Whether you include each other's children in your estate plans is a personal decision. But no matter if you decide to divide everything equally or keep your estates separate, at the appropriate time, make certain the children know the reality. Even the happiest family can become embittered by financial disappointments.
CONSIDER A PRENUP
If you haven't talked about a prenuptial agreement, now's the time. Even if you don't formalize it, putting things on paper will help you come to a genuine understanding. None of this is easy but, to me, your long-term happiness depends on it. Best of luck to all of you.
The marriage-go-round is tricky enough. It’s even trickier for those who fall off their pony then decide to climb back up.
Couldn't disagree more. In fact, I find the paragraph contradictory. "A certain amount of financial independence" means "a certain amount", by my reading. By equalizing discretionary income regardless of earnings you aren't providing any independence to the higher earner. That's a recipe for resentment.
What you should do (if you choose not to pool all resources) is to assign a certain amount of non-discretionary obligation on both parts to cover living expenses. This can acknowledge disparities in income without creating a feeling of resentment. If Person 1 makes 60% of the household income and Person 2 40%, why not divide living expenses proportionally, assign additional proportional amounts to savings, and let each do what they want with the remainder?
The woman already displays a sense of inferiority to her much wealthier fiance and has placed her kids in a second class category.
The ex-spouses and the kids’ other parents will add to the problem - no doubt.
Mrs WBill and I did roughly this, when we were both working. Worked fine. And, neither of us ever asked about the "discretionary" funds, unless something major ("Hey, I'm going to get a new car!") came up.
Worked like a champ.
Now that she's not working (as much), and I am ... things are a little stickier. But we still manage to figure it out. For instance, rather than give her an "allowance" (she's not 12, lol), I handle as much of her non-discretionary spending (gas, car payments, insurance) that I can. She has a lot less discretionary funding, but its her own, and it's not already spoken for with bills.
YMMV. But it's a system that works for us.
IMHO, the fastest way to wreck a relationship is to argue about money. If you each have your own, then there's nothing to argue about, ever.
“What’s fair in a situation like this? “
Put all the brats up for adoption, and start off fresh! /
ROTFL!!!!
I and my wife were Step-parents to each others children. If you don't get on the same page and quick, the children will tear you apart.
For this situation, I would suggest a Dave Ramsey ELP and a Psychological Counselor pronto. Good they are tackling this now before it becomes major trouble.
Again, for Step-Parents, get on the same page quick and stay there!
As for a Prenup, Dave would remind you that a Prenup only works for Assets held BEFORE the marriage. Assets after the marriage get split in divorces and the Prenup will not help then.
I DO NOT RECOMMEND A PRENUP. They setup a fault line in the marriage that money is more important than people. In Marriage you should be ALL IN with 100% commitment or not at all.
However, if it is children's assets that may be a different story.
My younger sister recently remarried after being a widow for about 10 years, she doesn’t live near me and I don’t see her very often. She has what I consider a very healthy income, owns her paid for home and so does her new husband have all that too. Each has one adult child and 3 grand children.
Right now they stay in her house part time and in his house part time. I’m really curious about what they will do about the housing situation but I consider that to be one of those “not my business things”. Looks to me like they would eventually sell one of them. They are both equally nice houses.
No matter which house they choose, the other person will always be a "guest" there.
But you're right - that's a good one to stay out of. :-)
I would also put the parents up for adoption.
I think your advice to sell both houses and purchase one together is brilliant. You are a regular Dear Abby, Wbill!
My advice is for them to visit a lawyer, to tell them exactly what their rights and obligations are under the law if they do nothing. and if that isn’t what they want, how to make things as they intend.
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