Wealth Planning For A Composite Family
First of all let's cover a bit of social history.
If you go back a few generations, people were born, grew up, met someone, courted for a (long) while then got married.
They then tended to stay married, you don't have to go back very far to reach a time when divorce was almost unheard of.
Contrast that to today when we are told that about one third of all marriages end in divorce, and a high percentage of people never get married in the first place - they simply choose to live together.
So what do we mean by the phrase "composite family"? A family unit where one or both partners involved have one or more children from a previous relationship.
The situation can be further complicated if more children are born into the new family unit.
The problem that arises is a simple one - who gets the stuff that you will leave behind when you pass away? It's not simply a case of who are you going to leave your money to, what about the things that may not have a material value but have a very high sentimental value - in other words, the Family Heirlooms.
Very often their perceived value can far outweigh the money, especially if it's something that one family member really does want particularly badly.
The scope for family fights and fallouts is tremendous - these arguments can turn extremely bitter and many is the time where as a result families don't talk for years afterwards.
Right, so you are sitting down with your Family Wealth Planner, and you are asked the question - who are you planning to leave things to? Things to consider include the following
...
the advisor that you are speaking with will assist in this area by helping you to make as accurately as possible a list of all of your assets - you can then see what is "his", "hers" and "ours" and then advise on ways to achieve the desired splits that you want that won't alienate those involved.
If you go back a few generations, people were born, grew up, met someone, courted for a (long) while then got married.
They then tended to stay married, you don't have to go back very far to reach a time when divorce was almost unheard of.
Contrast that to today when we are told that about one third of all marriages end in divorce, and a high percentage of people never get married in the first place - they simply choose to live together.
So what do we mean by the phrase "composite family"? A family unit where one or both partners involved have one or more children from a previous relationship.
The situation can be further complicated if more children are born into the new family unit.
The problem that arises is a simple one - who gets the stuff that you will leave behind when you pass away? It's not simply a case of who are you going to leave your money to, what about the things that may not have a material value but have a very high sentimental value - in other words, the Family Heirlooms.
Very often their perceived value can far outweigh the money, especially if it's something that one family member really does want particularly badly.
The scope for family fights and fallouts is tremendous - these arguments can turn extremely bitter and many is the time where as a result families don't talk for years afterwards.
Right, so you are sitting down with your Family Wealth Planner, and you are asked the question - who are you planning to leave things to? Things to consider include the following
- any children from the prior relationships that live in the "new" family
- any children from the prior relationships that live with the previous partner(s)
- any children from the new relationship
- any assets brought to the new family by each partner
...
the advisor that you are speaking with will assist in this area by helping you to make as accurately as possible a list of all of your assets - you can then see what is "his", "hers" and "ours" and then advise on ways to achieve the desired splits that you want that won't alienate those involved.
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