Q3 2026
Family Financial Conversations
QUARTERLY INSIGHTS ON HOW TO ACHIEVE FINANCIAL HARMONY IN THE HOME
Q3 2026
Family Financial Conversations
FINANCIAL PLANNING FOR NEW COUPLES
FINANCIAL PLANNING FOR A SECOND MARRIAGE
AVOIDING WILL PROCRASTINATION
Nobody gets to choose their family…but you do get a say in how your family changes over time. And make no mistake, families do change! They mingle with and marry other families. They welcome new members. They say goodbye to departing ones.
All of those changes require updates or additions to your Family Financial Plan.
In this edition of Family & Finance, we’re continuing our series on the most important financial conversations your family can have. Specifically, we’ll focus on three generational conversations that have to do with family change: Financial Planning for New Couples, Financial Planning for a Second Marriage, and Avoiding Will Procrastination.
Have a great month!
QUOTES TO THINK ABOUT"Family is one of nature's masterpeices.” — George Santayana |
Financial planning too often focuses on the end game: estate planning, retirement planning, life insurance, legacy building, etc. The need to help young people just starting a life together plan their financial world is sometimes lost in the scuffle.
At some point, whether it’s a child, grandchild, niece or nephew, someone in your family will decide to spend the rest of their life with someone else. When that happens, you may have the opportunity to dispense some much needed advice on how to meld two individual financial entities into one. How the new couple must begin making decisions for “we and us” rather than “I and me.”
Here is what we would tell them.
“First and foremost, your financial world together is now a team game. It should be something you are willing to openly discuss in a non-judgmental environment. In this game, there are few right or wrong answers . . . just differences of opinion that should be respected by both.
Second, work out a plan to handle money. An easy first step, particularly where both spouses have careers, is to set up a joint checking account for paying common expenses incident to running the household and contributing to joint savings accounts. Pay your personal expenses from your own checking account but be accountable for contributing your share into the joint account.
Third, remember that saving first and spending what’s left will help you build wealth and live within your means. Setting up a simple budget to cover fixed, predictable expenses such as housing, food and utilities will help you define what you need to live on and what you have available to save.
You should have three savings accounts:
- An emergency fund that can cover larger, unexpected expenses, or 3-6 months’ worth of simple living expenses
- A respective retirement account for each of you, even if you only contribute a small amount each month
- Set up a savings/investment account for larger, longer-term goals, such as a first home, new car or furniture. Set small targets for accumulation in this account. When you hit these targets, reward yourself with a treat—dinner out, a show, etc. The little treats make the bigger sacrifice worthwhile.”
As new partners, they should also check the beneficiary statements on their IRAs, employee pension plans and life insurance. The newest member of the family should be the primary beneficiary of it all.
Next, tell them that “property insurance, car insurance, health insurance and life insurance should all be reviewed to ensure that each of you is covered appropriately.”
The titles of property each individual owned before marriage, such as cars, stock accounts and real estate, should be reviewed. The couple may want to make it community property if they reside in a community property state. If not, at least title it in joint tenancy so that if one half of the couple passes, the survivor is not disinherited.
Then, tell them to start their new life together with a simple will and durable powers of attorney for health and financial affairs. This will ensure that if one becomes disabled, the other could make necessary financial or health decisions for both.
Finally, tell them this:
“Building a life together is more like running a marathon than the 100-meter sprint. It takes time, understanding and good communication to make it work. It’s all about teamwork.”
When two people get married, the idea is that it will last the rest of their lives.
But that’s not always the case.
Family members sometimes get divorced and then remarry. This can create a whole new series of financial planning challenges, all of which necessitate a conversation.
Handling the money in a second marriage takes planning and thought to avoid potential potholes on the road to marital bliss. The financial planning issues in second marriages can be broken into two parts: those required to conduct the everyday affairs of the marriage, and those relating to property ownership and estate planning.
In the case of the former, two separate and independent economic entities have to be merged to operate as one. Usually, two incomes have to be combined to pay the bills—his, hers, theirs. Savings have to be allocated for two separate retirement plans. It is not uncommon for both to own their separate residences.
An easy way to deal with the bills and money is to set up one joint checking account, with each of the spouses keeping their separate checking account. Common expenses and common savings can be paid from this account. Each is responsible for contributing a set amount into this account. What remains in each separate account is theirs to spend as they wish.
This arrangement is simple, easy to manage, and facilitates record keeping for tax preparation. More importantly, it leaves each with an element of financial freedom to spend the leftover money in their separate account without having to account to the other spouse.
When both bring personal residences into a marriage, property ownership and management are an issue. Suppose they decide to live in one and rent the other. Suppose both contribute to the mortgage payments of the residence through the common checking account. The rental income goes into a joint account to help cover the costs of the household. Such an arrangement will quickly create a joint ownership situation for both properties where none existed before. Because of the co-mingling of income and expenses, before long, both properties could be considered community property.
If the parties wish to continue owning their respective properties as their separate property, they will need a pre- or post-nuptial agreement to do so. Separate property will not be subject to division in a divorce, and it allows them to appoint the full value of their property as either gifts or inheritances to heirs. Community property, on the other hand, gives the other spouse the right to share in ownership in the case of a future divorce, and the right to bequeath the property interest at death.
If one spouse owns separate property and wishes to leave it to his heirs at death but also allow the surviving spouse the rights to use the income from the property during his or her remaining life, a Qualified Terminal Interest Trust (QTIP) may be worth considering as part of their estate plan. This trust lets the surviving spouse use, or have an income interest from, the property during his or her lifetime. At death it passes to the heirs designated by the first-to-die spouse. This trust can contain the separate property of the first to die, plus that spouse’s half of the community property.
Finally, it is important that all retirement plans and life insurance contracts be reviewed to ensure that beneficiary designations are correct. It is not uncommon among second marriages to find old IRA or life insurance policies with the first spouse named as the beneficiary. Retirement plans, IRAs and life insurance policies, which name anyone other than the current spouse as a beneficiary, create a potential estate tax liability upon the death of the owner. This can be avoided by either removing the life insurance policy from the estate by gifting or change of ownership or changing the beneficiary to the new spouse.
As you can see, there’s a lot to consider when someone remarries, and the decisions they make can affect the entire family’s financial future. Having frank, proactive conversations to address these considerations, and then letting the entire family know what has been decided (where appropriate) is an extremely important conversation to have.
The first two articles involved conversations that older adults may wish to have with their adult children or grandchildren, or with each other.
Our last article is about a conversation that adult children should have with their parents.
Most of us grow up with our parents warning us about the dangers of procrastination. Do your homework early before you fall behind. Clean up your room when there’s only a little bit to clean, before the clutter piles up. Brush your teeth each night to avoid cavities.
But sometimes, children need to remind their parents about the dangers of procrastination, too.
Specifically, the danger of procrastinating on writing (or updating) their will.
There is a name for this ultimate act of procrastination—“intestacy.” That is the legal term given to those who fail to plan for their passing and die without a will. This basic step in estate planning is overlooked by more than half of American adults who die without wills.
Without direction from the decedent, the state has no choice but to impose its rules and control upon the remnants of a person’s legacy. This results in added grief for their family, long delays in settling the estate, much higher legal bills, added taxation, and chaos for minor children.
Without a will, state laws will determine disposition of property. These rules vary from state to state. Generally, spouses get half of everything not jointly owned, with the rest split evenly among surviving children. Friends, extended family, and unmarried partners, meanwhile, are often out of luck.
In cases where no heirs can be located, the State will often assume control of the assets. The decedent can forget about leaving anything to charities or friends. Genealogical tracing services often search state records for unclaimed estates to match with heirs they locate. They extract a negotiable fee for this service.
For larger estates, that distribution process can result in unnecessary taxes being paid on assets transferred to children. In some states, all community property passes to the spouse, effectively disinheriting the children (by that marriage or former marriage) of the decedent.
Titled assets not passing by contract (IRAs, pensions, and life insurance) or operations of law (jointly-owned property) come under the control of the probate court system. The court will appoint an administrator, whose fees are paid by the estate, to gather and inventory assets and liabilities. At the direction of the court, the administrator of the estate will publish notices to creditors and provide the court with relevant ownership information on titled assets. Adding to the expense of settling the estate will be legal fees for an attorney to represent the estate.
After the court provides for creditor payment, the balance of the estate will be distributed according to state law. If minor children are to receive a share, the court will appoint a guardian to care for the children and manage their inheritance according to court direction until that child is 18. At that point, ready or not, the children are on their own and all inheritances are theirs to manage.
The results of dying intestate include:
- Loss of all control over who will manage your probate assets. The Court will appoint an administrator for you.
- The State will determine who gets your assets.
- The State will determine who will raise your children.
All of this is why the “don’t procrastinate on writing your will, mom and dad!” conversation is so critical. So, if you ever have any fear that your parents have not yet drafted their will, or if the will might be incomplete, out of date, or made without proper legal and financial help, it’s time to sit them down to have “the talk.”
Your future self will thank you…and them, too.
Minich MacGregor Wealth Management
21 Congress Street, Suite 203
Saratoga Springs, NY 12866
(518) 499-4565
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