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12. Understanding Financial Dynamics in Blended Families with Mikel Van Cleve · Planning & Beyond® - Where financial planning meets human understanding

• 0:00
  SPEAKER_00: In a blended family, what can happen is for one thing, you can unintentionally disinherit your own kids.
• 0:07
  SPEAKER_01: Welcome to Planning and Beyond, the podcast where financial advising meets the art of meaningful conversations.
• 0:14
  SPEAKER_01: I'm your host, Ashley Kwame.
• 0:16
  SPEAKER_01: As a certified financial behavior specialist and a passionate advocate for personal growth, I'm here to help you elevate your practice and deepen your connections with clients.
• 0:25
  SPEAKER_01: In each episode, we dive into the intersection of psychology, therapy, and financial advising.
• 0:32
  SPEAKER_01: You'll discover practical strategies, insightful stories, and expert interviews that will empower you to not only excel in your profession, but also thrive in your personal life.
• 0:42
  SPEAKER_01: Together, we'll explore the human side of financial planning, from understanding client emotions to mastering the nuances of effective communication.
• 0:52
  SPEAKER_01: We'll also focus on your own growth because the best advisors are those who are continually evolving.
• 0:59
  SPEAKER_01: Get ready to transform your practice and yourself.
• 1:03
  SPEAKER_01: This is Planning and Beyond.
• 1:09
  SPEAKER_01: When it comes to working with blended families, pick and be some of the most challenging dynamics from a financial planning standpoint.
• 1:20
  SPEAKER_01: What are the things that advisors need to know?
• 1:24
  SPEAKER_01: What are the tips?
• 1:25
  SPEAKER_01: What are the suggestions?
• 1:26
  SPEAKER_01: What are all of the non-numbers approaches that advisors need to hold on to when it comes to working with blended families?
• 1:34
  SPEAKER_01: Welcome to Planning and Beyond, the show dedicated to helping you deepen your relationship with your clients and yourself.
• 1:42
  SPEAKER_01: I'm your host, Ashley Kwame.
• 1:44
  SPEAKER_01: Today I'm joined by Michael Van Cleve, a CFP and a fellow FBS financial behavior specialist, as well as a doctoral student in the PFP program at Texas Tech University.
• 2:00
  SPEAKER_01: Michael's research is focused on just those things I talked about at the beginning: understanding the complex dynamics of money management and relationships within blended families.
• 2:12
  SPEAKER_01: Michael, welcome.
• 2:14
  SPEAKER_01: I am so glad that you are here and joining us today.
• 2:18
  SPEAKER_00: Thank you, Ashley.
• 2:19
  SPEAKER_00: It's such an honor to be here.
• 2:20
  SPEAKER_00: Thank you for asking me to come join your show.
• 2:23
  SPEAKER_01: Yeah.
• 2:24
  SPEAKER_01: Yeah.
• 2:24
  SPEAKER_01: Well, look, so as a therapist, I know that working with blended families, that there are unique challenges, unique approaches, even just conceptually, like in the framework and how we think about them, it's just, it's a unique dynamic that is unlike that of a maybe quote, more traditional family.
• 2:49
  SPEAKER_01: And so given the state of, you know, our divorce rate and then remarriage rate here in the United States, blended families are very, they're very common and they show up for advisors.
• 3:02
  SPEAKER_01: And so knowing how common place that is, I thought who better to bring on and have a conversation about blended families than you?
• 3:13
  SPEAKER_01: So I'm I'm glad that you're here to share some of your wisdom and your research.
• 3:19
  SPEAKER_01: And maybe, I don't know, maybe the best place for us to start is kind of high level.
• 3:25
  SPEAKER_01: What are some of the things that you have noticed, or even from a research academic place?
• 3:32
  SPEAKER_01: What are some of the most common challenges from a financial management, financial planning place when it comes to blended families?
• 3:40
  SPEAKER_00: You know, it's it's a great question, Ashley.
• 3:43
  SPEAKER_00: And I'll start too just by saying I became part of a blended family about eight and a half years ago myself.
• 3:50
  SPEAKER_00: Um, so my motivation for doing the research in this area and really trying to help share insights with others is completely selfish.
• 3:59
  SPEAKER_00: Uh, it's because, you know, I realize just how difficult and messy it is, uh, but also how ill-equipped and unprepared as a financial planner I was to help these types of clients until I became part of it myself and really saw behind the curtain.
• 4:18
  SPEAKER_00: And yes, there's some, I guess, technical financial planning type things that are different for blended families, um, particularly in the estate planning space and things like prenups and so forth that may come into the picture.
• 4:34
  SPEAKER_00: But the biggest thing is just the complexity behind the relationships and the emotions that are involved, and just understanding that they're generally more people.
• 4:46
  SPEAKER_00: Um, so a blended family, if if anyone's not familiar with that term, uh other terms used or step families, uh, but generally you've got at least one, if not both, partners in that relationship coming in with prior children.
• 5:04
  SPEAKER_00: And so there are already established traditions and norms they have with those children.
• 5:09
  SPEAKER_00: There's a stronger bond and relationship with your biological children prior to the relationship, which is different than a nuclear family where you meet, you know, your spouse or partner before the children come along.
• 5:23
  SPEAKER_00: Um, and so there are biological ties, there are allegiances, um, and all of those things just make things more complicated.
• 5:34
  SPEAKER_00: And then the one thing we don't think about when we marry into a blended family is their ex-spouse in some ways becomes our ex-spouse.
• 5:44
  SPEAKER_00: And so I never thought I would say personally myself that I had an ex-husband, uh, but I kind of do.
• 5:51
  SPEAKER_00: Uh, it's my wife's ex-husband because they share, you know, two children together.
• 5:57
  SPEAKER_00: Um, those children are a part of my life, and I have to be able to communicate with them sometimes and work through things, or you know, help my wife work through things when they're not getting along, right?
• 6:10
  SPEAKER_00: Her and her ex-husband.
• 6:11
  SPEAKER_00: So it's just it's more people, it's more emotions, it's more complex.
• 6:16
  SPEAKER_00: And so, even simple things like, I'm gonna get my teenager a cell phone for the first time.
• 6:23
  SPEAKER_00: Okay, well, is their other parent okay with that?
• 6:27
  SPEAKER_00: What if they have other children in the household and they think that's not fair?
• 6:31
  SPEAKER_00: Uh, are they gonna help pay for the monthly bill?
• 6:34
  SPEAKER_00: I mean, there's just all these simple things just become more complex.
• 6:38
  SPEAKER_01: Yeah, I definitely am familiar with that on the parenting side, like working with couples where they're having to navigate uh the parenting aspect of that.
• 6:47
  SPEAKER_01: But also I love what you said earlier around the traditions and how do we blend, you know, previous former traditions with, you know, new traditions.
• 7:01
  SPEAKER_01: Um and my goodness, like we could spend probably hours upon hours just talking about, you know, those kind of challenges alone.
• 7:10
  SPEAKER_01: And certainly they play into the financial piece as well.
• 7:15
  SPEAKER_01: I'm curious, do you find from like, you know, and and I know that some of the work that you do now is a little bit different, but like as a financial planner, do you think that the work with blended families is different when that couple is younger and there are still children in the home versus the couple where maybe the children are launching their young adults or are adults with established families?
• 7:40
  SPEAKER_01: Do you think that there's a difference from a planning standpoint in those two different families?
• 7:46
  SPEAKER_00: Yeah, there can definitely be some difference there.
• 7:49
  SPEAKER_00: Um, you know, and I'll I'll share kind of a personal story on that too, because I think that can help people to relate.
• 7:55
  SPEAKER_00: So when my wife and I married, our our two youngest, which are teenagers now, uh, were you know eight, nine years old, right?
• 8:04
  SPEAKER_00: And so uh they were just there was a difference for them versus our older kids who are in their mid-20s, uh, were already late teens, you know, at that point, um, as far as just how you integrate in the household um and also what they expect.
• 8:24
  SPEAKER_00: And so with the older children, you know, we we had even more of a bond because they'd been a part of our lives longer.
• 8:33
  SPEAKER_00: Um they were also already starting to embark on things like college, uh, where there were gonna be certain costs associated with that, either at that point you've either planned for it or you haven't already, right?
• 8:46
  SPEAKER_00: Um and then the younger ones, um they the lots of differences there.
• 8:53
  SPEAKER_00: They may not have quite the same uh allegiance to their other parent, um, because that divorce could have happened really early in their life.
• 9:03
  SPEAKER_00: Uh they could have even been babies, right, when that happened.
• 9:06
  SPEAKER_00: Uh, and so they've been used to their parents being separated, or maybe one of their parents being with someone else already for a longer period of time.
• 9:15
  SPEAKER_00: Uh, and so some of the relationship conflicts that can happen from the allegiance to other parents, because that does happen.
• 9:24
  SPEAKER_00: Hey, I can't be nice to my stepparent because uh that's betraying my biological parent, right?
• 9:32
  SPEAKER_00: Um, you see that a little bit more in the older kids, it seems, than you do in the younger ones.
• 9:37
  SPEAKER_00: Um and then, you know, again, their expectation of hey, mom or dad is gonna do these certain things for me.
• 9:45
  SPEAKER_00: They spend this certain amount of money on me that's been there longer.
• 9:50
  SPEAKER_00: Um, and we know teenagers are very expensive.
• 9:54
  SPEAKER_00: Um, and so there's some differences there, right?
• 9:57
  SPEAKER_00: Um, because now you're merging two households, you're merging different budgets, all these different things.
• 10:02
  SPEAKER_00: Like, how are you gonna work through and figure that out?
• 10:05
  SPEAKER_00: Most couples don't have those conversations um before they integrate their households.
• 10:10
  SPEAKER_00: We didn't, even though I'm a financial planner, I just didn't think to talk about certain things.
• 10:14
  SPEAKER_00: Some things we did, other things we just didn't think about, right?
• 10:17
  SPEAKER_00: Uh, and so there's definitely differences there.
• 10:20
  SPEAKER_00: And then also when you think about adult children uh coming into uh a blended family.
• 10:27
  SPEAKER_00: Uh I can share another personal story there.
• 10:29
  SPEAKER_00: So my dad, about 10 years ago, remarried or got remarried and he married his high school sweetheart.
• 10:36
  SPEAKER_00: So, which is kind of crazy, right?
• 10:38
  SPEAKER_00: Because they're in their 70s.
• 10:39
  SPEAKER_00: Um, but they met at a reunion, and my mom and dad have been divorced for like 30 years.
• 10:45
  SPEAKER_00: Well, um, she is my stepmom, his wife, but I've never lived with her, and she's really sweet, but like I don't really have a bond or relationship with her to that degree.
• 10:58
  SPEAKER_00: So when you think about older families and stepchildren, and you think about a nuclear family, in nuclear families, a child may take care of their parents when they become elderly.
• 11:13
  SPEAKER_00: Well, I don't really have a desire to take care of my stepmom when she's elderly and take on that burden, but what if her kids can't?
• 11:21
  SPEAKER_01: Right.
• 11:22
  SPEAKER_00: Well, then what happens to her?
• 11:23
  SPEAKER_00: And on average, you know, if things go as planned, then the guy, they're the same age, is generally gonna die first.
• 11:30
  SPEAKER_00: So who's gonna take you know, take care of my dad's wife?
• 11:34
  SPEAKER_00: And so there's just differences from that standpoint, too.
• 11:38
  SPEAKER_00: Um, as far as did you ever live together?
• 11:42
  SPEAKER_00: Um how old were you when the blended family came together?
• 11:47
  SPEAKER_00: And you know, what type of of traditions had already really taken place?
• 11:51
  SPEAKER_00: And we don't like change as people, our kids don't like change either.
• 11:56
  SPEAKER_00: And so when you're kind of just turning their whole life upside down in some ways by going and starting this new family, you know, that's gonna look different based on how old they are when when the flame family plans.
• 12:09
  SPEAKER_01: So yeah, these are some really good questions that you're you know, kind of posing.
• 12:15
  SPEAKER_01: And so, like I'm sitting here wondering, like, as a CFP, if you have a couple that's coming in and they're working through um, you know, kind of the initial like onboarding process, and you discover, um, okay, like this is a blended family uh situation.
• 12:34
  SPEAKER_01: Like, what questions do you feel like?
• 12:36
  SPEAKER_01: And maybe it's maybe it's some of the ones you just posed here, but what questions do you feel like maybe advisors um could or should be asking that would help to better inform maybe the planning process presently, or maybe perhaps down the road?
• 12:56
  SPEAKER_00: Yeah, it's a great question because I think it it's really in stages, right?
• 13:00
  SPEAKER_00: So if it's kind of uh more short term, like, hey, what's what's happening today, what's gonna be, you know, five years from now, that kind of thing, you know, you really want to get to understand, okay, what are in and really in all cases, what are the relationships like?
• 13:15
  SPEAKER_00: And I know that's gonna scare some financial planners.
• 13:18
  SPEAKER_00: They're gonna say, well, I'm not a financial therapist, I'm not trying to be a marriage counselor, but understanding people is our job.
• 13:27
  SPEAKER_00: Yeah, and that matters so much more than just the technical aspects and the numbers because personal finances are personal, right?
• 13:37
  SPEAKER_00: And and actually, I know you and I have seen the the stats on that, right?
• 13:41
  SPEAKER_00: Anywhere from 98% or more of the decisions that we make are not rational, numbers-based decisions, they're based on emotions, biases, and all these different things, right?
• 13:52
  SPEAKER_00: And so we have to understand what makes our clients tick and what's really important to them and what they've they value beyond just the numbers.
• 14:01
  SPEAKER_00: So if they say taking care of my family is important to me, well, what does that really mean?
• 14:07
  SPEAKER_00: And in the case of a blended family, you have to dig even deeper to say, okay, when you say taking care of your family, are you talking about just your kids?
• 14:17
  SPEAKER_00: Or are you also talking about your stepkids?
• 14:20
  SPEAKER_00: And how does that look?
• 14:22
  SPEAKER_00: And, you know, how are how are y'all going to budget for things and pay for things?
• 14:27
  SPEAKER_00: Well, statistically, blended families tend to manage finances separately more often than nuclear families do.
• 14:36
  SPEAKER_00: And part of that is a trust thing and just kind of that kind of that eroded foreverness feeling they have because maybe they've been divorced in the past.
• 14:46
  SPEAKER_00: And so that's that's taken a toll on how they see things.
• 14:49
  SPEAKER_00: Um, but also there are complexities in just how are you going to pay for things.
• 14:54
  SPEAKER_00: And because you're not biologically related to your stepkids, you're not going to have the same relationship with them initially and the same bond.
• 15:03
  SPEAKER_00: And so that that will develop to a degree over time.
• 15:07
  SPEAKER_00: But I find it really hard to believe anyone that says I love my stepchildren just as much as my biological children, even if they came into your life as babies.
• 15:18
  SPEAKER_00: Um, because you know, there's just there's just not that genetic relatedness there.
• 15:24
  SPEAKER_00: Um, and so that's part of why those finances are managed separately too.
• 15:28
  SPEAKER_00: Not to mention there could be child support obligations, there could be alimony obligations, things like that.
• 15:34
  SPEAKER_00: And the new spouse doesn't want to pay for those things.
• 15:37
  SPEAKER_00: Um, and so the managing of finances separately happens.
• 15:41
  SPEAKER_00: So, short term, I'm gonna really want to have a conversation to say, help me understand how you feel about different things.
• 15:47
  SPEAKER_00: How do you feel about you know paying for these expenses?
• 15:50
  SPEAKER_00: Are you gonna do this together separately?
• 15:53
  SPEAKER_00: What if your spouse was no longer able to work?
• 15:58
  SPEAKER_00: How are you gonna feel about paying for your stepchildren?
• 16:01
  SPEAKER_00: Guess what?
• 16:02
  SPEAKER_00: My wife retired this year due to medical reasons.
• 16:05
  SPEAKER_00: So, guess who's paying for their stepson now?
• 16:08
  SPEAKER_00: I am never planned on that, right?
• 16:10
  SPEAKER_00: Yeah, uh, fortunately, I've had eight and a half years to build a relationship uh with my youngest stepson who's in home, um, where that would be really hard.
• 16:19
  SPEAKER_00: But I'd be lying if I didn't say it's still hard for me to pay for everything because I have to tell my daughter, and I'll be honest, I spoil her way more than I should, but I have to tell my teenage daughter no to things because I'm having to pay for my stepson for things, right?
• 16:38
  SPEAKER_00: Yeah, and it's just part of life.
• 16:40
  SPEAKER_00: So it's it's having those kind of conversations of hey, how are we gonna manage money?
• 16:44
  SPEAKER_00: What if this happens?
• 16:45
  SPEAKER_00: What if that happens?
• 16:46
  SPEAKER_00: Are we gonna be okay with that?
• 16:48
  SPEAKER_00: Um, and then longer term, you start getting into those conversations around estate planning, legacy planning, and what is fair, right?
• 16:57
  SPEAKER_00: And what if one spouse comes into the relationship with considerably more in assets than the other spouse, or the opposite, considerably more in debt than the other spouse.
• 17:08
  SPEAKER_00: Um, you know, so if if one person's got a lot more in assets, you know, what what can happen there is conflict between the spouses because the new spouse may say, hey, we really should split this up evenly between the children.
• 17:23
  SPEAKER_00: That's what's fair.
• 17:24
  SPEAKER_00: But the spouse that had more assets is gonna say, Well, I already had this plan for my children, so taking away from them to give to yours is definitely not fair.
• 17:36
  SPEAKER_00: And so, how are you gonna talk through that and figure that out?
• 17:39
  SPEAKER_00: And the financial planner is going to have to, to some degree, help them with that.
• 17:43
  SPEAKER_00: And they don't need to be the marriage counselor and they don't need to go too far.
• 17:46
  SPEAKER_00: If it's time to refer to a mental health professional for marriage counseling or a financial therapist, they should do that.
• 17:54
  SPEAKER_00: But they got to be prepared to have that conversation of okay, let's talk through this.
• 17:58
  SPEAKER_00: Like, why do you feel this way?
• 18:00
  SPEAKER_00: And why do you feel this way?
• 18:02
  SPEAKER_00: And how can we meet in the middle in order to develop a plan they agree on?
• 18:07
  SPEAKER_00: Because if the financial planner is recommending, you know, an estate plan or a strategy to do certain things and the clients can't agree on that, it's it's wasted time, right?
• 18:18
  SPEAKER_00: It's it's not gonna benefit the clients, they're not gonna take action, um, and they're not gonna have the trusting, lasting relationship with their financial planner that you know the planner wants to have and the and the client desires as well, um, because they're not gonna feel like that planner really understands them.
• 18:35
  SPEAKER_00: Because they're not asking those tough questions, they're not having those tough conversations to really understand, okay, why do we feel this way?
• 18:43
  SPEAKER_00: And neither spouse is wrong, they're just coming at it from completely different perspectives.
• 18:48
  SPEAKER_01: Yeah.
• 18:49
  SPEAKER_00: I just read an article actually, somebody I I've never met them, but they quoted me in the article, so I got the little Google alert, but it was a story um about college funding.
• 19:00
  SPEAKER_00: And the the husband had uh some assets set aside to pay for college and so forth, and the wife didn't.
• 19:08
  SPEAKER_00: And she said, Hey, you're gonna pay for um my kids' college um because they shouldn't have to take out a bunch of student loan debt um, you know, when yours don't.
• 19:20
  SPEAKER_00: So let's just take the money and split it up evenly instead of giving it all to your kids.
• 19:26
  SPEAKER_00: And he said, Well, hey, wait a minute.
• 19:28
  SPEAKER_00: That's not uh that's not cool.
• 19:30
  SPEAKER_00: Why should my kids have to take on some debt and suffer when I prepared and you didn't?
• 19:35
  SPEAKER_00: Uh and that's a tough conversation, you know.
• 19:38
  SPEAKER_01: That's a very tough conversation.
• 19:40
  SPEAKER_00: Is it the spouse that's saying that you should split this up, the one that's being unreasonable?
• 19:46
  SPEAKER_00: Or is the spouse that's saying I'm not willing to split it up and share the one that's being unreasonable?
• 19:50
  SPEAKER_01: Um you know, I I would imagine for some advisors, I hope this isn't the case right now, but if you are listening to this and you are starting to feel maybe that anxiety is starting to arise like within you, um, take a breath, take a deep breath right now.
• 20:09
  SPEAKER_01: Uh, but I can, you know, somewhat kind of jokes aside, but also serious because I can see where just listening to you, you know, I've been in the trenches with blended families, and everything that you've said are conversations that, you know, I've had or had couples where, you know, we're having comments that they've made.
• 20:28
  SPEAKER_01: And man, it is challenging.
• 20:31
  SPEAKER_01: Um, it's challenging to go into those waters with them.
• 20:34
  SPEAKER_01: And I think naturally, sometimes as practitioners, like we don't want to muddy the waters, and we don't want to maybe quote create uh tension like or friction that's there and you know, some of the uh dynamics, some of the questions that you pose.
• 20:53
  SPEAKER_01: Like, I could, I'm just reliving certain couples in my head where I'm like, oh yes, yep.
• 20:59
  SPEAKER_01: And I remember having those conversations and how how they went um and how difficult that is.
• 21:07
  SPEAKER_01: So this is a difficult place, you know, I think to be, but you're posing and really offering some really great points and that the role kind of of the advisor when there is a blended family situation is you're gonna have to bring your game and you're gonna have to be willing to kind of go into those waters and help maybe sift through uh, you know, some of the stuff that's there to uh land on some decisions.
• 21:34
  SPEAKER_01: Um and this is also, you know, you mentioned like referring out.
• 21:38
  SPEAKER_01: This can be a really great place to collaborate with a financial therapist and do some co collaboration, you know, maybe some meetings together if there is a like higher degree of tension or friction that starts to arise.
• 21:52
  SPEAKER_01: Uh, like you, like I don't find a lot of um blended families, at least I haven't, uh, where the They have come to the table and had great financial discussions around how things are going to work.
• 22:06
  SPEAKER_01: It's like we'll kind of figure it out along the way mentality.
• 22:11
  SPEAKER_01: And I get that to some degree.
• 22:14
  SPEAKER_01: But also I think that it can really be a disservice or cause some difficulty later on, especially as you get to the estate planning aspect of things.
• 22:29
  SPEAKER_01: So okay, let's kind of moving into maybe the estate planning because this is where I see, this is where maybe I get called into meetings or where I have, you know, referrals come in is around estate planning.
• 22:43
  SPEAKER_01: And I recognize that depending upon maybe the um timeline or the runway that, you know, this couple has been together, also what has maybe been accomplished or accumulated prior to, I know sometimes like that can maybe make a difference.
• 23:01
  SPEAKER_01: And I'm thinking it's a blended family situation, but the couple's been married for like 30 plus years, and they've maybe accumulated a good deal of that wealth together, you know, in that relationship, as opposed to maybe they've only been married a few years and much of that, you know, was accumulated like prior to.
• 23:23
  SPEAKER_01: So I know, I know that can be a little bit of a difference there.
• 23:26
  SPEAKER_01: But what are some of the big kind of dynamic other, I mean, maybe kind of big dynamic issues or problems, um, maybe things for planners to be aware of when it comes to estate planning with blended families?
• 23:40
  SPEAKER_00: Full transparency is just more complex.
• 23:43
  SPEAKER_00: Um, and so when we the best way to probably put that is when we think about a nuclear family, if I name my spouse as the beneficiary on everything, uh, and then my spouse passes, you know, typically that's just gonna go to our kids, right?
• 24:00
  SPEAKER_00: And that's our shared kids.
• 24:02
  SPEAKER_00: In a blended family, what can happen is for one thing, you can unintentionally disinherit your own kids.
• 24:10
  SPEAKER_00: And so if I left everything to my spouse, who's her name's Heather, by the way, if I left everything to Heather and I didn't set everything up correctly, then you know, upon my passing, it goes to her.
• 24:22
  SPEAKER_00: When she dies, it goes to her kids.
• 24:26
  SPEAKER_00: My kids get nothing.
• 24:28
  SPEAKER_00: And so you can't just leave everything to your spouse, right?
• 24:31
  SPEAKER_00: And so um you have to make sure you have the right documents in place so that, yeah, I want Heather to be taken care of when I pass.
• 24:40
  SPEAKER_00: So I want her to be able to receive the income.
• 24:43
  SPEAKER_00: But when she passes, I want to make sure that my kids are are getting their fair share.
• 24:49
  SPEAKER_00: Now, fair share is gonna be defined different by every blended family.
• 24:53
  SPEAKER_00: Um, but I want to make sure my children are still getting their fair share uh and receiving that inheritance, and everyone's gonna be different on that.
• 25:01
  SPEAKER_00: Um, I have a very strong desire to leave a legacy uh and to create that first generation of true wealth that I can leave behind for my kids.
• 25:12
  SPEAKER_00: That's not something that's happened in my family in the past.
• 25:14
  SPEAKER_00: They they've done fine, but they relied on things like pensions uh and never really had assets to be right.
• 25:22
  SPEAKER_00: Um and so I have to make sure that you know I do spend a little bit more money up front and spend time with an attorney, not an online program, um, to get right documents in place so that my wife's taken care of, but I know that my kids are gonna get the money that I want them to get as well.
• 25:40
  SPEAKER_00: Um and so that can be it's just more challenging.
• 25:44
  SPEAKER_00: Simply putting my spouse at 100% on my retirement plans, um, you know, as the primary beneficiary, which is typically what happens, right?
• 25:54
  SPEAKER_00: Or naming her as the primary beneficiary on the life insurance, things like that.
• 26:00
  SPEAKER_00: Um, that's just not sufficient.
• 26:01
  SPEAKER_00: So we've set up some more complex trust arrangements and things of that nature um to make sure what we want to happen happens.
• 26:09
  SPEAKER_00: Now the other thing that can be difficult is I kind of talked about earlier is the relationship piece.
• 26:14
  SPEAKER_00: And so um I would not expect for my dad's wife to have me as any part of her estate planning as her stepson because I've never lived with her.
• 26:26
  SPEAKER_00: Um and I know her, they but I mean they live in another state, I think she's great, but we just don't why would she?
• 26:33
  SPEAKER_00: You know, that that should go to her kids, and I'm I'm fine with that.
• 26:36
  SPEAKER_00: Not everyone will feel that same way, but that's how I feel.
• 26:40
  SPEAKER_00: Um I uh, you know, I want my kids um to get more than my stepkids.
• 26:47
  SPEAKER_00: But I also have a stepson who, because he's older, I I've seen him four or five times.
• 26:54
  SPEAKER_00: Um, I don't have a relationship.
• 26:57
  SPEAKER_00: And honestly, I I don't have anything against him, I just have no relationship.
• 27:03
  SPEAKER_00: And so I don't really want him to get any of the pie.
• 27:06
  SPEAKER_00: Um, and and some people are gonna judge me for that.
• 27:09
  SPEAKER_00: I don't mean that in a mean or cruel way.
• 27:10
  SPEAKER_00: It's just he's only my stepson by you know legal terms, right?
• 27:16
  SPEAKER_00: He uh we just we don't have a relationship or a bond of any kind.
• 27:20
  SPEAKER_00: Um, and so I would I would rather you know the two youngest kids, one of which is biological and one of which is is my stepkid, actually get a little bit more than my older son.
• 27:32
  SPEAKER_00: Um, or you know, and again the other stepson, I don't know, nothing at all.
• 27:37
  SPEAKER_00: Um, and so that's gonna look different, right?
• 27:39
  SPEAKER_00: Some people would say, no way, my my biological kids are getting everything and my stepkids nothing.
• 27:44
  SPEAKER_00: Um there could even be a case though where someone says, you know what, I'm gonna give it all to my stepkids.
• 27:49
  SPEAKER_00: My biological kids are terrible.
• 27:51
  SPEAKER_00: You know, um, so there's just different ways that that can look.
• 27:55
  SPEAKER_00: And again, I think it goes back to what you asked me earlier, too, about the different ages when the blended families come together.
• 28:02
  SPEAKER_00: Um, you know, my dad and Linda, they could be married 20, 30 years before they pass.
• 28:09
  SPEAKER_00: Um, but because they form that that marriage later in life when I was already an adult, that's gonna look different, right?
• 28:18
  SPEAKER_00: Than if, you know, Heather and I are, Lord willing, married, you know, 40, 50 years, if we live that long.
• 28:26
  SPEAKER_00: Um, we'll be really old.
• 28:27
  SPEAKER_00: But if we live that long, um, you know, and the kids were part of that earlier on, we're gonna look at that completely different.
• 28:36
  SPEAKER_00: If if my youngest stepson is part of my life for 40 or 50 years, I'm gonna want him, like more more than likely want him to get pretty much the same as my biological children because that relationship.
• 28:49
  SPEAKER_01: Yeah, I actually really appreciate your transparency because I recognize that some of the things that you are saying with regards to your own just kind of thoughts around your legacy and what that like looks like.
• 29:03
  SPEAKER_01: Those are really difficult things that a lot of people say in their head, but they don't say out loud.
• 29:09
  SPEAKER_01: Out loud, yeah.
• 29:10
  SPEAKER_01: Uh, you know, and so I I have a lot of respect and really appreciate that you and I I know that you know I'm familiar with I've listened to you before.
• 29:19
  SPEAKER_01: I know that you are, you know, very kind of open and transparent about that.
• 29:23
  SPEAKER_01: And it's it's certainly something that I I respect about you because I think it's really difficult to say those things out loud.
• 29:29
  SPEAKER_01: But I do find that in working with blended families, like those are thoughts that go on for, those are thoughts that go on for clients.
• 29:38
  SPEAKER_01: Um I'm wondering, you know, listening to you kind of talk about uh talk about this.
• 29:43
  SPEAKER_01: You mentioned something earlier and it made me think like, what are your thoughts around having these conversations from like a values place, um, maybe at the start of estate planning?
• 29:56
  SPEAKER_01: Like, is that how estate planning should really kind of start with blended families?
• 30:02
  SPEAKER_01: Is what are your thoughts, like what are your thoughts?
• 30:04
  SPEAKER_01: Like you value legacy, so what does that look like?
• 30:07
  SPEAKER_01: Does that mean just your kids?
• 30:09
  SPEAKER_01: Uh like what would you what would you say to that?
• 30:12
  SPEAKER_00: When I look back at because right now I'm not in a um direct client-facing role, right?
• 30:18
  SPEAKER_00: I've I did that for over a decade, and then I've done things to support and train and equip um financial planners since.
• 30:27
  SPEAKER_00: But um, when I think back to working in that that capacity as a practitioner and helping people, I I kind of kick myself and I say, I'm surprised anybody picked you as their planner because I was so focused on going straight into well, what's our strategy going to be and this and that and whatever.
• 30:49
  SPEAKER_00: You have to go to the values first.
• 30:51
  SPEAKER_00: Um, and you have to go into the the messy relationship piece, and you have to go into understanding uh how else are you going to come up with a strategy and a plan that everyone agrees on and that they actually stick with, not something you talk them into during your sales presentation, but but something you actually all agree to and they say, Yes, this is what we want to do, let's make this happen.
• 31:17
  SPEAKER_00: Um you've got to get in there and figure those things out.
• 31:20
  SPEAKER_00: You have to know when they say, I want my family taken care of, who they mean by their family.
• 31:27
  SPEAKER_00: You can't assume that.
• 31:29
  SPEAKER_00: Uh and again, it's gonna look different for every family.
• 31:32
  SPEAKER_00: And we already know estate planning uh or just legacy planning in general, life insurance discussions, which can be part of that, obviously.
• 31:42
  SPEAKER_00: Very difficult and challenging discussions to have sometimes.
• 31:46
  SPEAKER_00: And in a nuclear family, it's much harder with a blended family.
• 31:53
  SPEAKER_00: And if we're not having those value-based conversations and we're afraid to go there, uh, we really are going to struggle.
• 32:01
  SPEAKER_00: And, you know, I'm a while ago you made the comment too, and I appreciate you saying that, but part of why I'm so transparent about this is we also have to understand that there is still a stigma and there's a guilt and a level of shame sometimes by being in a blended family.
• 32:19
  SPEAKER_00: Some people are in blended families because their spouse passed, right?
• 32:23
  SPEAKER_00: And it was something very sad.
• 32:24
  SPEAKER_00: But most are they were in a relationship before, whether they were married or not, where they broke up or divorced, right?
• 32:32
  SPEAKER_00: And now they're in this new relationship.
• 32:34
  SPEAKER_00: And so there's a negative stigma that goes with that.
• 32:37
  SPEAKER_00: But we can't continue to promote that as practitioners.
• 32:42
  SPEAKER_00: We have to be brave enough to have the conversation and go there and talk about it and not be judgmental, not put our biases and preconceived notions of how we think things should work onto them.
• 32:56
  SPEAKER_00: Um, because they need to feel like it's okay.
• 32:59
  SPEAKER_00: We have to make it normal.
• 33:00
  SPEAKER_00: We have to stop putting the shame and the guilt on them.
• 33:02
  SPEAKER_00: Like, it's okay to say I don't have the same feelings about my stepchild as I do my biological child.
• 33:12
  SPEAKER_00: We have to say that that's okay because it's proven that we're more likely to engage in altruistic behaviors when there's genetic relatedness than when there's not.
• 33:24
  SPEAKER_00: And the higher degree of genetic relatedness, the more likely we are to do it.
• 33:28
  SPEAKER_00: Well, there's there's no genetic relatedness with our stepchildren.
• 33:32
  SPEAKER_00: It doesn't mean we don't love them and we don't care about them.
• 33:35
  SPEAKER_00: It's just we just naturally are not going to have that same level of investment where, hey, we want to see our genetic offspring, what we reproduce, be successful.
• 33:48
  SPEAKER_00: Um, and it's just the way it is.
• 33:50
  SPEAKER_00: And so we have to go there as fine.
• 33:52
  SPEAKER_00: I'm getting almost soapbox, I'm preaching.
• 33:53
  SPEAKER_00: Sorry.
• 33:54
  SPEAKER_00: But we have to be willing to be transparent, we have to be willing to have the conversation, hard conversations as planners to understand the messiness and what's happening in there and what those vibes are.
• 34:07
  SPEAKER_01: Do you think that for advisors maybe uh similar to yourself who come from either a blended family or have, you know, created a blended family?
• 34:21
  SPEAKER_01: Do you think that it's easier for them to kind of get what you're saying about this genetic relatedness or even just the complexity from a relationship dynamic?
• 34:32
  SPEAKER_01: Do you think it's easier for them to maybe not cast judgment or or bias versus maybe an advisor who has little to no experience with that?
• 34:43
  SPEAKER_00: Yeah, I I think so.
• 34:45
  SPEAKER_00: And I think that's why there's a need for more awareness, right?
• 34:48
  SPEAKER_00: Because blended families are becoming more and more the norm.
• 34:51
  SPEAKER_00: But it's like with anything in life, if you haven't experienced a divorce, you're not gonna understand it as much as someone has had.
• 34:58
  SPEAKER_00: If you've never experienced the death of a very close person like a spouse or a child, you're not gonna understand it the same way as someone who has.
• 35:07
  SPEAKER_00: You can try to empathize, but you're just not going to.
• 35:10
  SPEAKER_00: That's not an excuse, though, to not try to understand it better and to learn and be able to approach it better.
• 35:16
  SPEAKER_00: My my biggest thing on that, really what pushed me into this was in doing this research and so forth was going to attorneys or even mental health professionals or other financial planners, because I think financial planners should have a financial planner, and them trying to approach you the exact same way as a nuclear family.
• 35:38
  SPEAKER_00: It's like I this conversation's over.
• 35:41
  SPEAKER_00: I'm not hiring you, we're done.
• 35:43
  SPEAKER_00: You don't get it, right?
• 35:45
  SPEAKER_00: And we're doing our clients a disservice if we don't try to better understand.
• 35:50
  SPEAKER_00: And it that goes for everything.
• 35:51
  SPEAKER_00: We can all get better, we know that.
• 35:53
  SPEAKER_00: Um, that's understanding, you know, like actually when we studied for our, you know, our certified financial behavior programs, right?
• 36:00
  SPEAKER_00: Was understanding different cultures, uh, different races, different genders, different backgrounds, different sexual orientations.
• 36:08
  SPEAKER_00: Like if we don't make an attempt to understand more diverse family structures and these different things, um, we're gonna come up short.
• 36:16
  SPEAKER_00: We're doing our clients a disservice, we're doing ourselves one too, because we're not gonna be near as successful as we could be.
• 36:22
  SPEAKER_01: So for kind of in that vein, for someone listening who is like, I hear you, Michael, and yes, I am on your bandwagon to destigmatize and like learn more about this.
• 36:39
  SPEAKER_01: For advisors who maybe find themselves ill-equipped, as you said at the very beginning, maybe who you felt found themselves ill-equipped, but also recognizing that they work with blended families and there is also a need.
• 36:55
  SPEAKER_01: What are maybe some resources or places?
• 36:57
  SPEAKER_01: Do they have to go and get a doctoral degree from Texas Tech to be able to do this?
• 37:02
  SPEAKER_01: Like guide us, walk us through maybe some resources, um, whether it's books or things like that, where planners can learn more about blended family dynamics from a maybe from a planning standpoint?
• 37:16
  SPEAKER_00: Yeah, that's a great question.
• 37:18
  SPEAKER_00: And here's I'll I'll answer that two ways.
• 37:20
  SPEAKER_00: Um, one I will say is there's a gap in where you go to seek those resources right now, uh, which is again kind of what drove my ambition to do this.
• 37:31
  SPEAKER_00: Because no, I would not say most people are not gonna want to pursue a doctoral degree.
• 37:36
  SPEAKER_00: Uh, you have to be a little bit insane to do that.
• 37:39
  SPEAKER_00: Um, I certainly am to do that in my mid to late 40s.
• 37:43
  SPEAKER_00: You've got to be a little bit nuts.
• 37:44
  SPEAKER_00: You've got to have a lot of support from your spouse and your family if you're married and have kids, uh, because it's a big sacrifice.
• 37:52
  SPEAKER_00: Um, but what drove me to do it is the fact that there is a huge gap.
• 37:57
  SPEAKER_00: And so when we look at research, again, most people aren't gonna go read academic journals and research articles with all these stats and different things, right?
• 38:06
  SPEAKER_00: Uh, but in that world, most of the research that exists today for blended families is more in the psychology realm.
• 38:14
  SPEAKER_00: Uh very little blending in the financial aspects and the challenges there.
• 38:20
  SPEAKER_00: Uh, what is out there is pretty much just focused on the financial side uh and not mixing, you know, blending financial planning with psychology, uh, which is really what we need.
• 38:32
  SPEAKER_00: We need to understand the relationships, the commotion, the emotions, uh, things like you don't have to be an expert in this, but just understanding the concepts of family systems theory, which helps us understand the relationship dynamics, or something like kin selection theory, which helps us understand the genetic relatedness aspect of it, right?
• 38:53
  SPEAKER_00: Um, just basic understandings of those type of concepts can help.
• 38:58
  SPEAKER_00: The information's not already packaged and out there.
• 39:01
  SPEAKER_00: Uh I'm trying though, y'all.
• 39:02
  SPEAKER_00: I promise I'm trying to work on that and get the research out there.
• 39:05
  SPEAKER_01: Yeah, I was gonna say I'm seeing a real opportunity here for there is a huge opportunity uh for you to shine and fill that gap.
• 39:13
  SPEAKER_00: Yeah, there's a huge opportunity, and we need more people um to get on board with that that have both the academic as well as the practitioner background because it can't all just be theory.
• 39:26
  SPEAKER_00: You have to know how to take that theory and apply it in practice.
• 39:29
  SPEAKER_00: What I will say though is there are a couple of uh programs out there that are good.
• 39:36
  SPEAKER_00: Um, there's an author by the name of Ron Deal, D-E-A-L.
• 39:41
  SPEAKER_00: Um, he's written several books in the blended family space.
• 39:45
  SPEAKER_00: Uh he's kind of been in that space now for over 30 years.
• 39:48
  SPEAKER_00: He's uh he's on the mental health side.
• 39:51
  SPEAKER_00: Um, but he's written a book on uh financial planning in step families as well, and he partnered up with the financial planner and an attorney to write that book.
• 40:02
  SPEAKER_00: Uh and so Ron Dill, if you look him up, you'll see all kinds of resources.
• 40:07
  SPEAKER_00: Um and then there is a step family program uh out of the extension service at the University of Auburn that I know um other universities like Utah State and so forth are using as well.
• 40:22
  SPEAKER_00: Uh, and they're putting a lot of effort into the blended family space too.
• 40:26
  SPEAKER_00: They're they're a little bit more on the mental health side as well, but they're starting to try to incorporate a little bit more on the financial side.
• 40:34
  SPEAKER_00: But honestly, the the practitioners listening to this call, y'all know the the technical financial pieces.
• 40:41
  SPEAKER_00: You know or you should know, right, if you're working on estate planning with them, that you're gonna have to look at some different techniques so that everyone's taken care of the way that they need to be.
• 40:52
  SPEAKER_00: You're looking at you know, q-tips and different things, um the the strategies that you need to put in place to take care of that.
• 41:00
  SPEAKER_00: So you know the technical piece.
• 41:02
  SPEAKER_00: What you need to understand better is uh the uh the uh psychology side of it and the emotions and relationships.
• 41:10
  SPEAKER_00: So get a basic understanding of family system theory.
• 41:14
  SPEAKER_00: Get a basic understanding of the step family cycle, um, which kind of shows how step families progress through it's kind of like the storming, forming, and norming stages, right, that you see in a business.
• 41:26
  SPEAKER_00: Same concept applied to step family.
• 41:29
  SPEAKER_00: Um, and get familiar with things like kin selection theory.
• 41:32
  SPEAKER_00: You don't have to be an excerpt, you don't have to write your own research papers and publications on that, but just understanding those concepts and hearing and listening, listening being the key piece to what your clients are saying, the emotions they're expressing, expressing in the complexities that are involved can go a really long way in helping these blended families out.
• 41:56
  SPEAKER_00: Yeah, I'm I wish I could say I'm sorry, I was just gonna say, I wish I could say there's all these wonderful resources out there already, and you can go do this, but well, I kind of set you up for failure if I'm honest, Michael.
• 42:07
  SPEAKER_01: I'll be honest, I kind of knew I I kind of knew that there was a gap.
• 42:13
  SPEAKER_01: Although I will say maybe I didn't know there was, you know, to the extent that you're talking about, but I I did.
• 42:19
  SPEAKER_01: So I feel like I part of me feels a little bad because I feel like I kind of said you're gonna go.
• 42:23
  SPEAKER_00: You're good, you're good.
• 42:23
  SPEAKER_00: Let's get the resource.
• 42:25
  SPEAKER_00: Let's call it out.
• 42:26
  SPEAKER_00: Let's call it out, and let's just say there's a gap.
• 42:30
  SPEAKER_00: And as an industry, we are failing um people, we're failing the people out there we need to be helping by not having more resources for professionals and by not being better equipped as professionals to do that.
• 42:44
  SPEAKER_00: And everything doesn't have to be pre-packaged for us.
• 42:47
  SPEAKER_00: No, we can go do our own research and search things up.
• 42:51
  SPEAKER_01: Yeah, well, I am optimistic that with people such as yourself, uh, that that gap will start to be, start to be filled with wonderful valuable information for um practitioners uh moving forward, which that excites me just for the future uh there.
• 43:11
  SPEAKER_01: So thank you for sharing, you know, all of those resources.
• 43:15
  SPEAKER_01: I feel like, you know, if there's just one big overarching takeaway that I'm having from our conversation for advisors, is if you stay curious, if you just approach these families with curiosity, these dynamics, these relationships with curiosity, and you just follow maybe those breadcrumbs of asking and trying to understand, um, hopefully from a non-judgmental place, right?
• 43:45
  SPEAKER_01: That it will lead to some really valuable conversations and understanding, which will directly inform you know the direction of the planning process.
• 43:55
  SPEAKER_01: So that is kind of that's my big takeaway from our conversation.
• 44:00
  SPEAKER_01: Um today.
• 44:01
  SPEAKER_01: I want to wrap things up though by asking, you've been in this industry, right, for a little while.
• 44:08
  SPEAKER_01: And if you could for a moment just think back to young Michael uh and whoever he was, right?
• 44:16
  SPEAKER_01: Uh I'm sure he's wonderful, right, in so many ways.
• 44:19
  SPEAKER_01: But thinking back to young Michael, young CFP financial advisor, Michael, what are some um, what are some tips, what are some things that you would want him to know uh based off of you know where you are now presently?
• 44:34
  SPEAKER_00: Yeah, it's it's a great question.
• 44:36
  SPEAKER_00: I first of all, I give myself a good uh swift kick in the rear because I would say that I had a lot of my own preconceived notions and uh biases about how things should work.
• 44:50
  SPEAKER_00: And I know I projected those onto my clients.
• 44:53
  SPEAKER_00: And it's easy to be kind of judgmental and say, well, gosh, why are they doing this and why are they doing that?
• 44:59
  SPEAKER_00: You know, and uh I had a I had a pastor once say in a sermon, you know, if if you can share a bed together, you can share a bank account.
• 45:08
  SPEAKER_00: And that's a very one-sided approach to take on it.
• 45:12
  SPEAKER_00: And I had that kind of mentality of why are these people not managing their finances jointly?
• 45:16
  SPEAKER_00: They're married, like they should be doing this or they should be doing that.
• 45:20
  SPEAKER_00: And um we just have to really be careful with that.
• 45:24
  SPEAKER_00: So I would I would go back and tell myself, hey, don't be so quick to judge or so one-sided in your thinking.
• 45:32
  SPEAKER_00: Um and also don't feel like you have to know everything or tell everyone what you do know.
• 45:39
  SPEAKER_00: Um say in the business world, right, and leadership, uh, they'll never care how much you know until they'll know how much you care.
• 45:47
  SPEAKER_00: So they're not gonna care how much you know till they know how much you care.
• 45:50
  SPEAKER_00: It's the same thing with our clients.
• 45:52
  SPEAKER_00: We've all heard probably that saying before.
• 45:54
  SPEAKER_00: Like, spend more time on it doesn't mean you don't need to know the technical pieces, you have to know that, right?
• 46:00
  SPEAKER_00: So you don't mess something up for them.
• 46:02
  SPEAKER_00: Um, and so they'll trust you, but they're gonna trust you more if you spend time to actually get to know them.
• 46:07
  SPEAKER_00: So spend more time on the soft skills and really listening uh and listening to understand um and to to really build a deep relationship.
• 46:19
  SPEAKER_00: Um, not to sell products, but yes, I know if you work in a uh a a company that's not maybe fee only planning, you're gonna have some some quotas for sales and things like that potentially, but those sales are gonna come uh if you take the time to build a trusting relationship.
• 46:37
  SPEAKER_00: So spend more time on that than than really just trying to tell them everything you know or focusing on the technical pieces because at the end of the day we're human and think about what's important to you, yourself, and you know what you would want out of that type of relationship with someone.
• 46:57
  SPEAKER_00: Um and that's the same relationship we should be giving our clients.
• 47:01
  SPEAKER_00: But if you're not in this industry to help people, are you in the right industry?
• 47:04
  SPEAKER_00: It shouldn't just be about making money.
• 47:07
  SPEAKER_01: Yeah, yeah.
• 47:08
  SPEAKER_01: I think that's fantastic, fantastic advice for your younger, your younger self, uh, and just for anyone in general, uh, maybe right now, who who needs to hear that.
• 47:20
  SPEAKER_01: Well, Michael, thank you so much for joining us uh here today on the Planning and Beyond podcast.
• 47:28
  SPEAKER_01: For those of you listening, I also want to extend a thank you.
• 47:32
  SPEAKER_01: Thank you for allowing Michael and I to come into your mind, into your ears, and hopefully play a small part in your own development and growth, both on the planning side and on the personal side.
• 47:48
  SPEAKER_01: Until next time, here's to planning, here's to growing, and here's to going beyond.
• 47:57
  SPEAKER_01: Thanks for joining me on this episode of Planning and Beyond.
• 48:00
  SPEAKER_01: I hope you found today's insights valuable and inspiring for both your practice and your personal growth.
• 48:06
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• 48:12
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• 48:17
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• 48:26
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• 48:38
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• 48:43
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