The Brady Bunch made it look so simple!  Widowed mother (played by the recently departed Florence Henderson) with three daughters married a widower with three sons.  They all rode off into the sunset together handling an array of challenges such as who got the last piece of pie, or which group of kids was able to make use of the family room for things like a doll party or setting up the train set.  Such was life for this clan in the popular television series that ran between 1969 and 1974, and was later made into a feature film in the 1990’s.

 

Perhaps you remember this “blended” family.  And while the foundation of The Brady Bunch  (two families uniting to become one) is happening more today than ever, the challenges and problems blended families face nowadays is far more complicated and complex than what occurred in a television sitcom.

The Stepfamily foundation reports that today over 50% of all families fall into the category of blended families.  These families must deal with the reality of each spouse having children from a previous marriage.    This is where an elder law and asset protection attorney can become an invaluable resource, as the spouses work together towards an agreeable financial game plan for your blended family.

Unlike our Brady Bunch paradigm, it’s not always true peace and harmony among such blended families.  For example, while the husband and wife (let’s call them Jim and Karen as shown in the accompanying photo from their wedding day) enjoy the fruits of their union, all is not so great amongst the different members of this now merged family unit.  Maybe this is something you can relate to as well.

You see, Karen has a real distaste for her husband Jim’s oldest son Curt.  The guy’s 40 years old and seems to make a habit of lasting less than six months on the job.  What makes matters worse is that Curt goes through money like its toilet paper.

Adding to the mix is how Jim really resents that Karen’s middle daughter Penny has been married three times, has four kids, and is always asking her mother for money that’s never paid back.  So even though the heads of this blended family are committed to making things work in their marriage, there are forces in play that make the subject of how to best preserve assets of major importance.

In all merged families each spouse brings something to the relationship, financially speaking.    While the partnership may be a 50/50 proposition, the allocation of the couple’s estate may be anything but.  In our example, Jim doesn’t want Karen’s middle daughter to be able to lay a finger on his bank accounts.  As well, Karen doesn’t want Jim’s erstwhile son to lay claim to her house that the couple now shares.

Amidst this family dynamic is paying for potential long-term care needs as Jim and Karen get into their 70’s.   In Ohio, the cost of nursing home care is as high as $10,000 per month.

What I call a “powerful” (financial) power-of-attorney is a must as a sound first step.  However much more is needed.  Are items such as Medicaid or VA benefits a possibility to pay for long-term care costs?  An elder law attorney can get you these important answers.  The objective is to avoid losing your home and see your bank accounts drained to pay for nursing home care.

Is an Irrevocable Trust a viable asset preservation strategy for a blended family?  Here a separate trust is done for each spouse.  This allows for the wife or husband to pass assets exclusively onto to her or his children, or other intended beneficiaries upon their death.    Plus the husband and wife exclude anyone he or she wishes.  Many a blended family spouse likes this detail, especially when you take into account my earlier examples of step-children with less than stellar track records of personal behavior.

Failing to make your wishes known via an asset preservation document like an Irrevocable Trust can wreak havoc on peoples’ lives.   For example, without such an estate plan, the wife or husband will inherit the estate when one of the spouses passes on.  The surviving spouse may then designate his or her children as beneficiaries, effectively shutting out the departed person’s own flesh and blood from sharing in the estate.  I’ve seen this occur countless times over the years.  The anger adult children spew when they discover that the step-parent has kicked them to the curb rivals anything you’ll see in the most intense of movie confrontations.  Only this is real life!

An Irrevocable Trust also allows each spouse to extract income from his or her separate trust without touching the principle, as required.  There are also benefits of having an Irrevocable Trust, as it pertains to Medicaid eligibility and to also owning a home.  Again here an elder law and asset protection attorney can provide you with full details.  Is an Irrevocable Trust the answer?  You won’t know for sure until you sit down with a legal professional.

There’s also a very intriguing asset preservation and wealth building program that may be well worth your consideration.  Many blended families have discovered that this strategy is ideal for the many challenges they face.    Here you can invest in a special annuity authorized by the Pension Protection Act of 2010 which actually grows your income for future nursing home care expenses, without any added premiums.  Money from your IRA can be used here if you wish.  Best of all, your investment is guaranteed to yield a three-fold return, and the investment is tax-free.   Plus unlike traditional long-term care insurance (where if not used the money’s lost) any funds not going for long-term care expenses is returned to your designated beneficiaries, meaning any out-of-favor step-children (or in-laws for that matter) can be excluded from taking part in the financial payout of your money.

Certainly, all families must make key financial decisions.  However, the very aspects of a blended family signify the need to be ever diligent regarding where your assets are going, and exactly who is or isn’t going to receive money and/or assets from your estate.  Adding to the mix here is the specter of runaway nursing home costs, and whether or not any money will be left over to your spouse, children and/or grandchildren.

The time to act is now.  Your first step should be to contact us at The Stano Law Firm to attend one of my bi-weekly free seminars at the Stano Senior Resource Center, 6650 Pearl Road in Parma Heights.  You’ll discover more about your options and what are your best resources to grow and preserve assets to pay for long-term care, plus be able to leave a financial legacy to your loved ones.  Register at StanoSeminars.com (seats go fast) or call 440-888-6448 to reserve your spot.