Dan Dobry

Tackling Challenges for the Modern Family

With the high incidence of divorce and remarriage, even without the reality of multiple spouses in a lifetime, modern families are a complex structure, it is common now for a family to live in multiple jurisdictions, for both spouses to be significant earners and this is even becoming the new norm.

Unlike the traditional family, there are many aspects of the modern family that require careful and honest evaluation, including how to blend finances, especially when one (or both) spouses bring significant assets to a new relationship.

The Main Challenges of Financial Planning for Families

  1. Managing Joint Expenses: it is common for the new modern family to approach the merger of interests, income, and assets in different ways for example: 
  • One single joint account” – In this scenario, both spouses deposit all their income, and all expenses are paid from these joint accounts. Typically, the account is funded with an equal contribution from each spouse from other assets, including but not limited to, distributions from retirement accounts.
  • Household Account” – both spouses fund a joint account with a like amount each month, quarter, or annually to share equally in the common household expenses. In addition, each spouse maintains their remaining accounts and assets separately.
  • Drawing straws” – both spouses determine, by draw, luck, or voluntarily, which expenses will be paid directly by each spouse and all accounts are maintained separately.
  1. Estate Planning
  • Balancebalancing the desire to provide for a surviving spouse during his/her lifetime with the desire to provide for the children during their lifetimes can be a significant challenge. This challenge is further heightened when there is a minimal difference between the age of the subsequent spouse and the ages of the children.
  • Avoiding the Will/Trust Contest – avoiding a costly, emotionally draining will or trust contest is one of the greatest challenges in estate planning for modern families. Without an effective plan in place, the estate may be the subject of a long battle that significantly reduces its value and places those we love the most at odds. This is a common occurrence that all too often pits a new spouse against the children.
  • Unintended Dispositionif you pass away without a will or properly funded trust in place, your assets will pass under the laws of intestacy. These laws will result in a disposition of your estate that may surprise your new spouse and leave him/her without sufficient assets to care for themselves during their lifetime. Moreover, it will most likely not result in a disposition of your estate per your wishes.
  • Children of Multiple Marriages – providing for children of multiple marriages can be a significant challenge. Will your new spouse’s children from a previous marriage be treated the same as your own, or will you provide that your assets pass only to your children? These questions require honest, candid conversations with your spouse and seeking counsel from an estate planning attorney.
  • Beneficiary Designations – ensuring your beneficiary designations align with your overall wishes and provide the appropriate balance between your new spouse and children is a significant challenge that requires effective coordination and careful planning. If you forget to properly coordinate these designations, it can greatly undermine the disposition of your estate.

Like holiday planning, financial planning for families presents a myriad of challenges and potential pitfalls. It is essential to work with a certified professional that works aligned with an academic proven methodology. 

The Outcome Can Be Outstanding as: 

Financial Planners Look at The Big Picture: a financial planner usually examines the full spectrum of a client’s financial situation. Current and future income levels, debt ratios, living expenses, and more go under the planner’s microscope. By looking at the client’s full situation, a financial planner should be better positioned to give advice.

Financial Planners are not Salesmen: when speaking with a financial planner, you aren’t dealing with a broker. The financial planner isn’t trying to sell you on a stock or an investment option. The goal of the financial planner is to help you achieve your life goals. 

About the Author
Dan Dobry was the founder and a director of the GlobalNET Investment House, he was one of the founders of the Union of Financial Planners in Israel (UFPI) and served as the first Chairman and President of UFPI. Dan was the Global Council Representative for Israel for the Global Community (FPSB) from 2012 - 2018 and was a member of the Committee for Standards and Qualifications for the European Union (SQC) until December 2021.
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