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Stepping Up: Smart Strategies for Providing Financial Support to Your New Stepchildren

by Tamila McDonald
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married with children

Blending finances when you tie the knot is always a little tricky. But if one spouse gets married with children from a previous relationship, it’s even more complicated for the new stepparent. How much financial support to provide to assist with caring for a stepchild is a potentially contentious subject. Fortunately, there are ways to step up that usually work well for everyone. Here are some smart strategies for providing financial support to your new stepchildren.

Talk with Your Spouse

Before you make any changes to your financial plan, talk to your spouse about financially supporting your new stepchildren. How you need to proceed may vary depending on several factors. For example, is your spouse the primary caregiver, or is the other parent in that position? Are they receiving child support from the other parent? Is there a significant income discrepancy between your household and the other parent’s household?

It’s also wise to discuss any expectations regarding financial support for any stepchildren. The spouse with children may assume that the new stepparent is going to step up in a different way than the new stepparent pictured. Unless this is discussed as soon as possible, it can lead to arguments, frustration, or even resentment. As a result, it’s best to initiate a conversation where both parties can talk about what they envisioned and work together to get on the same page.

During the conversation, it’s perfectly fine for the new stepparent to set reasonable boundaries. It’s critical to outline what expenses related to a stepchild are which person’s responsibility, particularly if both parents are still part of the picture. There isn’t a single answer that’s right for every blended family, so talk about it openly and honestly, and consider putting a plan in writing to give everyone some guidelines to follow.

Get Input from the Other Parent

While the conversation may feel a bit awkward, it’s a good idea to get some input from a stepchild’s other parent. Co-parenting is tricky, and it requires a lot of effort to ensure that both parents are on the same page. Add a new stepparent to the equation, and it’s an even messier situation if discussions aren’t had on the topic.

Ultimately, the goal here is to make sure that any financial support offered doesn’t go against the other parent’s wishes. In some cases, the other parent may feel pushed away if a new stepparent starts handling expenses they usually covered or is financially able to give more than they can, particularly if it may alter how their child views them. So, don’t assume that they’ll have a “more is better” attitude about financial support from a stepparent. Instead, work with your new spouse to ensure you gather the right information before making any big decisions.

Have Some Degree of Separation

While combining your finances with your new spouse is the more typical path, if they have a child from a previous relationship, some degree of financial separation is potentially necessary. Essentially, by having your income go into an account that’s only under your control and then transferring funds into a shared account for household bills or other agreed-upon expenses, you can make sure that money beyond what you’re comfortable with isn’t used to support your stepchild without your knowledge.

Now, this separation doesn’t mean you can’t contribute to unexpected costs relating to a stepchild; it just ensures you’re directly involved at all times. Essentially, it allows you to protect your interests along the way, making financial support beyond what’s agreed upon in advance your decision.

Update Your Will or Estate Plan

A new stepchild means that an update to your will or estate plan is essential. Whether you choose to leave any assets to them is something you need to decide, and then outlining those wishes formally is critical. Otherwise, a lack of an update could lead to disagreements if you pass away, even if the original plan is more or less what you intend to keep in place.

Generally, it’s best to mention every potential beneficiary in your will or estate plan, regardless of the value of any assets they receive. By updating the content to include your new stepchild, you’re showing that they weren’t overlooked by mistake. In turn, the odds of a disagreement that could cause a court to alter how your assets are divvied up if you suddenly pass is less likely, increasing the chances that your wishes will align with the end result.

Consider Updating Your Life Insurance

Typically, life insurance is designed to ensure that your family gets some financial support if you pass away. As a result, the amount of life insurance you may need or the list of designated beneficiaries could require some adjustments if there’s now a stepchild as part of the equation.

Consider everyone who needs financial support and estimate how much you’d like each of them to have if you pass away. Then, get a policy (or set of policies) that covers the amount required and designate who receives which funds as you list the beneficiaries. It’s also wise to address the policies and beneficiaries in your will or estate plan, ensuring there’s no doubt regarding where you intended the money to go.

Review Your Plan Regularly

Even if you have a workable plan in place for years, that doesn’t mean you shouldn’t revisit the topic with your spouse regularly. Your relationship with your stepchildren will evolve over time, and you may want to play a bigger role in their lives as your bond grows – for example, you could teach them about money.  As a result, it’s wise to talk with your spouse as these natural evolutions occur, allowing you to both talk about shifting expectations, changing financial situations, new needs, and anything else that may make you want to alter the equation.

Again, it’s wise to have this discussion with the stepchild’s other parent, too. How they view the situation can also change with time, and it’s critical to balance covering your stepchild’s needs with their preferences based on their position as a co-parent. The goal is to find a harmonious solution that’s mutually acceptable for everyone. So, remain open and honest over the years, and adjust your plan accordingly when the need arises.

Do you have any other tips that can help someone provide the right financial support to new stepchildren? Do you have any guidance for someone who’s recently married with children from a past relationship to ensure their expectations are reasonable? Share your thoughts in the comments below.

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