Second or third marriages are increasingly common, but the added emotional, social and financial complexities are often under appreciated.
Dave Lee, Senior Wealth Advisor with Scotia Wealth Management in White Rock, emphasizes the importance of addressing these issues. “Sitting down with a professional who understands the intricacies of blended families is key,” he explains.
In addition to reviewing financial goals, assets and other common topics, discussions might include evaluating both parties’ ongoing financial connections to previous spouses. This evaluation is crucial for understanding the short and long-term implications.
When there are children from previous relationships as well as the current relationship there can be an additional layer of thought that needs to go into what’s fair and how limited resources such as time and money are allocated. There’s no “one size fits all” strategy for these situations.
Beyond these more obvious considerations, some decisions are influenced by emotional responses to past experiences. For instance, someone whose previous partner wasn’t trustworthy with finances might be more hesitant to share assets in a new relationship. “Emotions can play a big role in financial decisions,” Dave notes.
A common challenge is how to fairly deal with a home when a new relationship arises. The original owner may want their new spouse to be able to stay in the home regardless of who passes first, but also ensure that it eventually goes to their own children, not the children of their second spouse. In the absence of good planning, these wishes may not be carried out in the way the homeowner desires.
Some people are acutely aware of gaps in their plans and don’t know where to turn to find appropriate solutions. Others are oblivious to all the things that can go wrong from the perspectives of minimizing tax, maintaining family harmony and providing effectively for the people they love.
We find over and over though that when we take people through the full Total Wealth Planning process, the important issues are brought to the surface, the right type of dialogue occurs, and effective solutions identified and implemented.
“Often, when people engage with myself and my team about their what is most important to them and the financial planning issues that they have not yet resolved, our experience allows us to share a range of possibilities, and the light goes on for them,” Dave says. “As an advisor, being able to open up a path to meaningful solutions is an experience that never gets old.”
Dave Lee CIM, CFP, FCSI is a Senior Wealth Advisor with Scotia Wealth Management in White Rock. He can be reached at dave.lee@scotiawealth.com or 604-535-4743.
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