Financial and estate planning for blended families

Many Canadian families are still of the 'traditional' kind but blended families are on the rise...

Many Canadian families are still of the ‘traditional’ kind but, according to Statistics Canada (StatsCan), their numbers are declining while those for blended families are growing.

The 2011 Census included stepfamilies (StatsCan’s term for blended families) for the first time, and according to the Census stepfamilies now represent about one in eight families with children.

Money matters are often a challenge in any relationship, and they become even more challenging in the case of a second (or third) marriage or common-law relationship, especially when they include children from previous and current relationships.

Here are some points to consider:

• If you and your partner have separate financial plans, it’s important that you come together and develop a cohesive plan that will help best attain your new family’s objectives.

• Determine how you are going to treat all your children equally.

• Establish an RESP for every child that does not already have one.

• If you and your partner designate each other as the direct beneficiary of all of their assets, when one partner dies, everything goes to the survivor, potentially disinheriting the children of the deceased spouse.

And, if the surviving partner should remarry, the new partner could become entitled to the estate (or a large portion of it) which could disinherit not only the children of the deceased partner but even the children of the survivor. For these and other reasons, a standard will is not recommended for a blended family.

Other strategies include dividing the estate at the time of death of the first parent or using a spousal trust to protect the assets for both families. It’s crucial to speak to your legal adviser regarding a will with terms appropriate for your blended family.

• Similar problems can arise from jointly held property. Many couples choose to hold property jointly so title passes automatically to the survivor on the death of the spouse and avoids probate fees (this does not apply in Québec).

But if you have children or other dependents from a previous relationship and want them to share in the value of your property, then holding title to the property jointly with the right of survivorship isn’t recommended. Speak to your legal advisers regarding ways to hold title to property in a way that benefits your children and carries out your wishes.

Financial and estate planning for blended families is complicated. Talk to your financial and legal professional advisors about the right strategies for your personal situation.

J. Kevin Dobbelsteyn is a certified financial planner with Investors Group Financial Services Inc. His column appears every Wednesday.

Just Posted

Valley woman found guilty on three charges following 2016 collision in Courtenay

The woman involved in a trial for a multi-vehicle collision in which… Continue reading

High winds force several BC Ferries sailing cancellations

Tsawwassen to Swartz Bay, Horseshoe Bay to Departure Bay, and Duke Point to Tsawwassen among closures

New wind warning for most of Vancouver Island

Forecasters are calling for strong winds up to 90km/h for some areas

Mount Washington opening for winter season this weekend

The resort’s original opening day was delayed due to lack of snow

VIDEO: Royals reveal the images on their Christmas cards

Prince William and his wife Kate are shown outside in casual clothes, their three young children in tow

Media, robotics, Indigenous studies coming to B.C. Grade 12 classrooms in 2019-20

Provincial tests are also being changed for students in Grade 10 to 12, the Education Ministry said

ICBC to apply for 6.3% hike to basic insurance rates

Crown Corporation said it will be submitting its next basic rate application to the British Columbia Utilities Commission Friday

Stranded B.C. trucker writes final wishes before being rescued 3 days later

‘I was just praying someone would come along’

Canfor Corp. extending temporary curtailment of sawmills in B.C.; cutting hours

Vancouver-based company says the decision is due to declining lumber prices, high log costs and log supply constraints

Canada’s prospective world junior team members await final roster decisions

Thirty-four players were invited to the national junior selection camp

Family searching for B.C. professor last seen at Colombian salsa club

Ramazan Gencay, a professor in economics at Simon Fraser University, was last seen in Medellin

Rash of bomb threats a learning opportunity for response capacity, Goodale

Thursday’s wave of bomb threats swept across communities on both sides of the Canada-U.S. border

Mike Duffy can’t sue Senate over suspension without pay, judge rules

Duffy’s lawsuit sought more than $7.8 million from the upper chamber

Most Read