All couples should have [a] talk [about] finances before they get married. But it’s especially important to cover all the bases when the union involves two previously established households with children and other complications, such as parents who may need financial or physical support as they age, or ex-spouses still in the financial picture.

You might say a family is simply greater than the sum of its parts. This calculus is no less true for a blended family, than for a traditional family. On the other hand, there are so many more parts, moving pieces, and (with childhood Christmas presents coming to mind) possible choking hazards.

Blended families, however loving, oftentimes have more than a few things to address when it comes to financial and estate planning.

Indeed, the challenges faced by the blended family are frequently discussed in professional financial and legal circles. In part, this is because blended families are the new normal. If your family is “blended,” then it is only prudent to consider any tips regarding common challenges you may face.

In that spirit, you will want to read a recent article from Daily Finance titled “Blended-Family Finance: Tips Every Modern ‘Brady Bunch’ Should Consider.”

[Food for thought: we are coming up on 50 years since the Brady Bunch debut, and we are still learning family lessons from that show.]

While so much of “blended family” planning depends on your own unique blended family, it never hurts to learn from the experiences of others similarly situated. Here are some of the lessons gleaned and shared in the article:

• Agree on roles and responsibilities.
• Discuss your philosophies on saving, spending and investing.
• Establish some mutual financial goals.
• Protect your future.

In addition, you will want to read the pointers shared in the article when it comes to “taxes and estate planning.”  Remember it is imperative to discuss changing the beneficiary to your 401k, insurance policies, annuities and other financial instruments so that the “ex” doesn’t end up with these parts of your estate instead of your current spouse.

In the end, the only way to have a successful blended family is to plan appropriately once you are all in.

Reference: Daily Finance (November 5, 2013) “Blended-Family Finance: Tips Every Modern ‘Brady Bunch’ Should Consider

When death grows near, the issue of a legacy can come into much sharper focus.

As their end of life becomes less abstract, people have a tendency to turn back and look over their old Last Will. Consequently, some of them decide to radically change their plans. What about your Last Will and Testament? While it is your Last Will, deathbed revisions can create dangerous challenges to your Last Will and overall estate plan if not accomplished correctly.

The Wall Street Journal considered this matter in a recent article titled “Changing a Will at the Last Minute.”

As you can imagine, a Last Will is an important document. Not surprisingly, drafting a Last Will “on the fly” or redrafting one from the hospital bed raises the red flag. Since your Last Will expresses your final intentions in black and white, if there is any room to question the truth, seriousness, or sanity (yes, that is a big one) of your black and white intentions, then the entire plan can be thrown out. Many such deathbed changes to the will result in challenges especially when an heir in the previous will has been eliminated by the “deathbed” will.  Our experience in Utah has been that the deathbed will, if not thought out and properly implemented may result in a substantial cost to the estate in attorneys fees and costs necessary to defend the last minute changes.

Against this backdrop, pause for a moment of serious self-reflection before making any changes to your Last Will under circumstances that could attract greater scrutiny later. For example, ask yourself “why do I need to make this change now and not before?”

The simple truth, of course, is that your last-minute revision can be utterly intentional and utterly necessary. For one, our thoughts about life, family and charity likely become crystal clear when the end becomes real. There may be every reason in the world certain changes must be made now and not before. Then again, the legal environment changes constantly and sometimes the Last Will must be updated to save the family fortune from taxes or protect loved ones.

Bottom line: there has to be a seriousness and thoroughness to your planning even until the end. Last minute revisions to your Last Will might be required, but they must be done correctly or risk causing more harm than good.

In the end, successful estate planning at any stage means working closely with competent estate planning counsel, someone who has “seen it all.” This is not a “do-it-yourself project.” For that matter, proper planning now may lead you away from the need to annotate or change your Last Will later.

The easiest and most cost-effective way for most people to mitigate these risks is through insurance products, such as disability, life and long-term-care insurance. That may be common knowledge, but discomfort with the subjects and the complexity of insurance products prevent many people from obtaining necessary coverage in advance of a life-changing event.

To know and not to do is not yet to know. In other words, to know there is a risk, for example, and yet not to act upon that risk can leave disastrous holes in your retirement plan, your end-of-life care, or your estate itself. While it is not the only financial planning tool in the tool chest, many financial plans could benefit from an insurance to solve myriad risks.

The kinds of insurances we are “required” to buy help us with the minor bumps and scrapes in life and are sometimes easy to think about, shop for or ensure that we have adequate coverage. Auto and homeowners insurance, for example, come immediately to mind.

On the other hand, disability insurance, long-term care insurance and life insurance are another matter entirely. As USA Today points out in a recent article titled “Insurance is most ignored in financial planning,” these three insurances are all too often ignored, misunderstood and difficult to think about emotionally. Nevertheless, they are often essential.

Insurance is, quite literally, a product you purchase to solve a risk. It is peace of mind. Without fail, insurance is more cost effective than coping with a disaster. To become disabled, especially late in life, is to lose income that may be necessary for you and your loved ones. Disability insurance can mitigate this. Likewise, with the rising costs of medical care and seeming inevitability of requiring a good deal of elder care, long-term care insurance can step in when the medical needs are overwhelming. And finally, life insurance helps eliminate the risk your family faces without you and your income.

Each type of insurance is well worth your consideration, and each can be budgeted to fit within a comprehensive financial plan.

Reference: USA Today (November 10, 2013) “Insurance is most ignored in financial planning”

If you are planning to leave assets to a child or other beneficiary with special needs, one of the first things you should consider is the use of a supplemental needs trust.

We plan our estates to ensure our loved ones will be okay after we are gone. If a loved one requires some type of assistance in dealing with disabilities such as physical, mental or psychological, then your estate planning needs some special planning itself. So what more should you do to ensure the happiness and well-being of your child with special needs?

Special planning is, of course, very much tied to the needs of your child with special needs and to the needs of the rest of your family. As you might imagine, such planning entails important tools, rules and guides. To get started, consider a recent article in The Slott Report titled “3 Tips When Planning for a Special Needs Child.”

One of the keys to special needs planning is understanding how public assistance aid works and its sources. Generally, the two major sources are Supplemental Security Income (SSI) and Medicaid. Both programs are “needs-based.” In other words, eligibility to receive benefits is all about qualifying financially, preserving that qualification, and ensuring a painless transition (read: not getting caught in bureaucracy). The regulations dealing with qualifying for SSI and Medicaid are complex and require a special understanding on the part of the attorney doing the planning in order to navigate the requirements successfully.

Tip #1: Consider implementing the all-important Supplemental Needs Trust. Properly drafted and funded, this is a special trust designed to offer security and care, without endangering needs-based program benefits.

Tip #2: Plan ahead and plan carefully! These public assistance benefits may not be enough or offer as much security as you would want to ensure. In fact, you might want to find a way to leave more behind. Life insurance is an excellent option.

Tip #3: What’s the final tip? You need to plan for yourself, too, and for your entire estate. As important as your loved one with special needs is, you have to ensure that the rest of your plans work together, too. For example, make sure to plan for threats to your own financial security, like high long-term care costs in old age. Without proper planning now, all could be lost later. In the end, if there is no security for you, then there may be no future security for your loved ones.

The original article has a bit more to chew on, with some helpful pointers to get you moving in the right direction.

Reference: The Slott Report (November 20, 2013) “3 Tips When Planning for a Special Needs Child”

Families often think a “do not hospitalize” means “do not treat,” but that is not accurate. “What it means is, ‘We’ll do the best we can for you here in the nursing home, and if nature takes its course, then that’s all right,’” said Dr. John Culberson, an assistant professor of medicine at Baylor College of Medicine in Houston who has studied [“do not hospitalize”] directives.

Advanced medical directives are a tough subject. Why?  Because they mean making some tough choices.  Utah Advanced Health Care Directives deal with health care decisions when you are not able.   “Do not resuscitate” directives order health care providers to withhold measures to revive you when you are comatose.

For elderly loved ones in nursing homes, however, there is a very powerful tool found in a little known directive known as the “do not hospitalize” directive. Unfortunately, it also happens to be underused and misunderstood, as pointed out in recent article in The New Old Age Blog titled simply “A Misunderstood Directive.”

Advanced directives, as you may well know, are your medical choices reduced to black and white. They are intended to speak for you when you cannot. “Do not hospitalize” does not mean you do not want to receive care. In fact, you can even spell out the circumstances when you really want to go the hospital!

Going to the hospital, however, is not always the best (or only) alternative across a spectrum of treatment scenarios. Hospitalization itself can be an intensely disorienting process, especially for patients with advanced dementia.  Little surprise, then, that more than half of all elderly patients with dementia who are transferred from the nursing home to a hospital and back will pass away within the following 18 months. Accordingly, hospitalization can be an unfortunate step in the care continuum.

In fact, hospitalization is oftentimes unnecessary. For example, most nursing home patients are sent to the hospital for respiratory infections, which is both avoidable and treatable in a nursing home setting without much trouble. On the other hand, the “do not hospitalize” directive can still provide that a broken bone or the replacement of a medical device can still trigger a hospital visit if you so stipulate.

While advanced directives do some important work, according to some the “do not hospitalize” directive can help assure more peaceful late-in-life care.

Reference: The New York Times – The New Old Age Blog (November 20, 2013) “A Misunderstood Directive”