Avoid Unintended Disinheritance
Conversations about money and inheritances can be uncomfortable. But wouldn't it be better to talk about it with family members while you can, rather than to leave it to the state to decide after you are gone? Ron Deal, director of FamilyLife Blended, walks through different scenarios, and gives suggestions about how to make wise money decisions.
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Conversations about money and inheritances can be uncomfortable. But wouldn’t it be better to talk about it with family members while you can? Ron Deal gives suggestions about how to make wise money decisions.
Avoid Unintended Disinheritance
Bob: Is money ever the issue that pulls couples apart in marriage? Ron Deal says he thinks money is a symptom more than a cause of conflict.
Ron: Every time you hear, “Money is the number one cause of divorce,”—it is not true. What is true is what is underneath money—that’s what creates conflict. How you handle money tells somebody whether you’re selfish or not. In blended families then, you have the added things of: “Do I really belong in this family?” “Is your ultimate loyalty to your children, or are you providing for me?” “It seems to me more money is spent on your children than on my children.” That’s the stuff we fight about and argue about, and that’s what ruins relationships.
Bob: This is FamilyLife Today for Friday, April 3rd. Our hosts are Dave and Ann Wilson; I'm Bob Lepine. You can find us online at FamilyLifeToday.com. It’s important that couples in a blended family/in a stepfamily have conversations about finances. It’s important to know how to talk about them and what to talk about. Ron Deal joins us to help with that today. Stay with us.
And welcome to FamilyLife Today. Thanks for joining us. I want to amend something I have said in the past.
Dave: Oh, boy; this is going to be fun.
Ann: I can’t wait!
Bob: When I said this—and there’s part of me that I still believe what I was saying—but it was limited. I have said to people in the past, “I think it’s wrong for a couple to come up with a pre-nuptial agreement”; right? You’re getting married—there shouldn’t be any pre-nuptial, where you’re planning for the divorce; right?
Dave: I agree, Bob.
Ann: It’s a safety net; and you say, “You don’t need a safety net.”
Dave: I have a feeling you’re going somewhere.
Bob: Well, Ron Deal is here with us today. Ron, welcome back to FamilyLife Today.
Ron: Thank you. It’s always good to be with you.
Dave: Is he the contrarian?—he thinks pre-nups are good?
Bob: We’re going to find out. Ron gives leadership to FamilyLife Blended® and to the great work that’s going on there. He’s an author; he’s a speaker. He’s been on FamilyLife Today a number of times.
We should say, here at the beginning, any time we have you on, there are folks, who are going: “Well, blended families; so it sounds like FamilyLife® is endorsing divorce?” Do you want to speak to that for just a second?
Ron: No, we’re not endorsing divorce at all. We’re not endorsing any sin choice somebody may have made that led them into a blended family. What we are talking about is the redemptive work of God in people’s lives to influence where they are/who they are.
The woman at the well had a very sordid marital life. We don’t know all the details behind that, but it wasn’t pretty. A little cup of living water, and all of a sudden, she is preaching and teaching and bringing people to Jesus. We think that Jesus can have that redemptive work in everyone’s life.
Bob: That’s what FamilyLife Blended is all about—trying to meet people where they are and saying, “How can where you are be in sync with where God wants you to be?”
So, on pre-nuptial agreements, did you ever say like I said, “Nobody should ever sign a pre-nuptial agreement”?
Ron: I think I probably did; early in my career, I did. Before we talk about whether we should or shouldn’t, let me follow up on the quick reactions that you guys had. Why did you think that, at some point, in the past?
Bob: I thought it because a couple, going into marriage, signing a prenuptial agreement is hedging their bets—they’re saying: “I’ve got an 80 percent confidence that this will work out, but I’d better just protect things because things can go south,” and “I want to make sure I’m ready if they do.”
Ron: —so lack of commitment or something.
Dave: “I’m not really stepping on the water, trusting God to make it solid. I’ve got one foot in the boat. If it doesn’t go the way I think, I’m good.”
Ron: It’s almost like saying, “I’ll leave [my parents] and cleave to you, but I won’t leave my money.” [Laughter]
Bob: There you go; that’s right.
Ron: Absolutely; I do think that pre-nuptial agreements, in general, are planning to fail.
But what if we could pull out the best part of what the pre-nup is intended to do, and turn it into something that helps you succeed? Just real quickly—a quick story we tell in this book, The Smart Stepfamily Guide to Financial Planning: in 2016, a designer in the Netherlands actually designed—are you ready for this?—he designed a house called a pre-nuptial house. It’s two units designed like tetris shapes that fit together. It’s a houseboat, so it floats on water. When the couple breaks up, which inevitably is going to happen, they can each take their half of the house and float away.
Bob: Oh, my word.
Ron: It’s a real thing. [Laughter]
Dave: It’s a real thing.
Ron: Now what if we could take, in a blended family scenario, two adults—who already have some assets, money, and something in a financial past—and they’re the two separated tetris shapes, and we put them together? We create togetherness for their financial future; that’s what we want to do in this book.
Instead of a prenuptial agreement, we harvested the idea and turned it on its head—Shook out all the negativity of it,” as my friend, Greg Pettys, says in the book—and created a Togetherness Agreement idea. It’s this: “We plan together how we’re going to merge both our money and our family relationships for the benefit of everyone involved with permanence.” It’s about planning to succeed, not about planning to fail.
Bob: I love what you’ve done in the book, The Smart Stepfamily Guide to Financial Planning, which you wrote with a financial planner, Greg Pettys; and an estate attorney, David Edwards. You got together—the three of you—your background, focusing on relationships/on what the Bible has to say about how relationships are supposed to work out; Greg brings all of the financial expertise; David brings the estate law together. You said: “How can we help couples, who are either forming a blended family or are in a blended family, address an issue that has potential to damage their relationship/their extended family relationships? How can they address it; so that it can go smoothly for them, and their kids, and their grandkids?”—right?
Ron: Right; I mean, we’re trying to disarm the hand grenade that’s sitting in their living room that nobody’s really talking about or doing anything with.
I have to tell you—I’m really proud of this project—not because of what I contributed; I think I helped to pull a lot of pieces together—but Greg and David are true experts. There is no book like this, period—secular or Christian-based. There are probably three other books about blended family finances on the market. None of them deal with the relational dynamics of the family and how that influences how money is used and how money is thought of. And none of them lace in any value/Christian ideals into the ideas of the book at all. This truly is a first, to my knowledge; and I think it’s very practical. I just think it’s really going to help people.
Bob: I’m talking to moms and dads today, who are, as their kids are growing up and getting married in a first marriage—they’re saying, “Before my daughter marries him, I want some kind of a financial background check run on him.”
Here’s the reality: your son, who graduated from college and maybe had a scholarship, so there’s no student loan debt. He’s fallen in love with somebody who’s got $40,000 of student loans. They’re going to get married; and all of a sudden, her $40,000 of indebtedness is now your indebtedness. I bring that up because those are real life issues that first-time families have to face.
Let’s go to a blended family scenario, where the wife, whose husband died—she was left a sizeable estate. She’s met and fallen in love with a guy, who lost his business last year and had to declare bankruptcy. The kids are looking at this and going: “No, no; you’re not marrying him! I don’t care how much in love you are, because does all of this become yours?” We would say: “If a husband and wife are falling in love and getting married, yes. What was each of ours, individually, is now ours together.” Is that the right way to look at it?
Ann: Let me jump in here because we had a scenario with a friend that is the exact situation she was in. When we have couples who are getting married we would always advise them that it is a joint bank account. But I had no idea, Dave you felt this too, because they were good friends. She was in her 40s. I felt such an emotional protection over her and for her kids that that was the question. He had poor financial dealings. He had some bankruptcy and she had a sizeable inheritance. She came to us and said, “what do you think?” What do you tell people?
Dave: There needs to be a book out there. [laughter] This was two years ago. Now I know what I would have handed her.
Ron: Okay; let’s take the layers. As we’ve already said, there’s above-the-surface money stuff and legal aspects of this: “How do we manage that?” The below-the-surface relational dynamics is what you’re really asking about. There are adult kids, who don’t trust this new man and: “What is he all about?” and “He seems to not manage his money well. Can we trust him to manage Mom’s money, which is really our money? Where do we fit into this?”—that’s below the surface.
Then there’s relational trust between the couple: “I love you; I trust you, sort of. I feel some loyalty to my first husband.” You can imagine that being a part of the scenario—to care for what he cared about/to make sure it moves to our children in ways that honor them and honor him. You can get so stuck in the middle of all that stuff.
I think you sit down and you begin to pull apart and ask: “What is this about?” “What is this about?” If that couple comes into that discussion with one solution: “We must have one pot of money at the end of the day,” I think they limit their ability to be creative about how they love and care for one another. The number of bank accounts is not the issue. The issue is: “How do we love, and honor, and care for one another?” And in this scenario, we’re not just caring for one another, we’re caring for kids.
It could be that they find a creative way to create a Togetherness Agreement that agrees that:
“You and I, as husband and wife, are sharing this that we both bring.” That might even be: “We’re, together, deciding: ‘I’m going to help you with your debt. That’s a part of me marrying you—is I marry your debt,’”—alright?
But “We’re also going to provide for our children with this,”—maybe there’s a family business. “Maybe we’re going to leave life insurance for kids, that nobody gets to touch, and the kids are going to get what’s fair to them. But here’s another piece of our asset”—the house or some other—401K for example—“that you and I share after my death.”
You can find creative ways of doing that. Sometimes that means you end up with two pots of money; or three pots of money; or two pots of functional day-to-day money, but then we have 401K account, and we have this over here account—we really have ten pots of money. The point is: that is being used to care for and honor marriage and children.
Dave: You’re saying it’s a little bit different—because tell me if I’m right—if you’re talking to a first husband/first wife; one marriage—you typically would say: “Joint account.
Ann: —one pot.
Dave: “That’s loving each other; that’s being one; that’s trusting God.”
But it’s different now [with blended family]; right?
Ron: Yes; you know what? I think even the first marriage has layers. Fifty years ago—
Ron: —well, I’m just going to—Nan and I—I was 19; she was 20; we had nada.
Ann: You had no pot!
Ron: We had nothing; no pot! [Laughter] We were dirt poor, barely surviving college. There was nothing to worry about or share, whatever. We just jumped in and went for it.
Couples today are getting married at 26/28; they’ve already acquired a little bit; they’ve already got a house. Nan and I are going to a wedding very soon, where—when you went to their online registry, it was not anything about kitchen utensils or a toaster—it was about paying for their vacation; it was about paying for a resource they were looking for to aid in their job. They’ve already got a house; they’ve already got a toaster—they’ve already got all this kind of stuff—because he’s 28, and he’s established; she’s 26, and she’s established. Now, they’re just going to be merging all that stuff. The world has changed!—right? That couple may need to have a Togetherness Agreement conversation around how they’re going to merge their things.
Blended family couples: absolutely, it’s got to be part of the conversation.
Dave: What’s that look like, if you sit down and say, “Honey, let’s develop a Togetherness Agreement.” How do you start? What do you do?
Ron: One of the first things you are going to do—in the book, there’s an appendix called “The Own and Owe” list: everything you own, and everything you owe. If you were to sit down and start making a list of all that stuff—and then slide it over the table to the other person; they’re sliding over to you. Do you know what you’re doing?—you’re getting transparent. You’re, actually, showing the other person: “I’ve got $40,000 in college debt,” “I bought a car I shouldn’t have bought,” “I’ve got credit card debt.” You have to own it: “Here it is. If you marry me, you’re marrying this.”
Now we have full transparency. That is a good exercise for anybody; I don’t care who you are. Now we get honest about one another, and what marriage means, and “How we move forward with this.” There’s no surprises.
As soon as someone is keeping a secret and then they surprise it on you and you’re stuck with credit card debt you didn’t see coming. Well, that’s just a betrayal of trust.
The process starts there; then you begin to kind of figure out: “Alright; this is what we have to work with. Where do we want to go?” The book walks you through a process of figuring out those initial steps.
Some couples, as we said before, will figure out: “We need a little help with this. We’re not sure what those creative financial solutions are. We don’t know what a QTIP is. We need to sit down with an attorney or a financial planner, who does understand those pieces.” Together, you find your way through. It can be a much longer process for some people, just based upon their history and what they have. Other people, it might be a conversation they have one afternoon and “Hey, we feel like we can move on.”
Bob: Ron, I’ve heard you tell couples in a blended marriage: “The priority in the marriage needs to be”—you call it the “front seat” relationship.
Ron: Yes; ultimate allegiance is to your spouse.
Bob: Is that true, financially?
Ron: Yes, but that doesn’t mean you stop providing for children; it is a both/and. It is: “Yes, you’re in the front seat with me; and we have kids in the back. Some are mine; some are yours”—different combinations—“How do we provide for them and think about their futures? What would we want to give them? If I were to die today—my kids are not yet in college—how do I make sure my kids get to go to college?” Those are really important conversations. They’re a part of our responsibility, as parents.
Bob: If we got married in our sixties—both of us widows; we’ve got adult kids—my new wife has some financial need; that takes precedence over inheritance for my kids.
Ron: Yes; but let me just say this—some people kind of get nervous with the “Yes”—like, “Oh, does that mean I have to shift everything over?”—no, no, no; it’s not all or nothing; it is about both.
The creative answer might be something like: “Everything that I have in place—and my will—is basically staying the same. But I am going to go out and buy,”—as Greg and David have taught me, the great financial equalizer is—“life insurance.” “Everything I have is already set, and my children are going to continue to get that; but I’m going to go out and buy some more life insurance that just goes to my spouse,”—because that way, they are provided for; kids are provided for. There are lots of creative ways of managing that. It doesn’t mean you have to start dividing, or splitting, or taking away from somebody. Thinking it through together is the way to do that.
One of the awkward pieces of that might be a parent then going to their, now adult children, for example, and saying: “This has changed. Before, I left all three of you kids/each got a third. Now you’re each getting this percentage….Here’s why...But here’s what I want you to see: I’m still providing for you, and I’m leaving something to the grandkids through life insurance. I’m also providing this, over here for my new spouse, so everyone is cared for,”—that’s the ultimate message.
If you lead with that—one of the things we teach people is: “Lead with love,”—“The reason we’re making these changes is so that I can provide for you. I love you; you’re my child—that’s never going to change—and”—not “but”—“and I’m providing for my new spouse.”
Bob: Love is not a zero-sum game, but money is.
If I’m going to my kids and saying: “I’ve got a new wife coming into the picture; that means your inheritance is going to be diminished. You’re going from a third to now what’s going to wind up being 17.5 percent.” They’re looking at that, in hard dollars; and that’s going to sting for them. It’s going to require that my kids have some level of spiritual maturity and that they understand what it means to trust God. Is there a way I can help shepherd that, spiritually?
Ron: Hey, there is cost to making choices in relationships. You can’t choose to get married and expect that there not be any cost. Not only is there a cost in your money, there’s a cost in your time; there’s a cost in your energy. You used to have 100 percent of your grandparenting energy for your biological grandkids. Now you marry somebody, and you have stepgrandkids. There is cost all the way around.
There are some realities here that you do have to face. That’s part of what we help blended families understand is: when Dad/Grandpa has made these choices, that’s forcing cost on children that they didn’t ask for. That creates some tension; that is part of the reality of this.
Dave: You’re saying, obviously, once you design this togetherness, this agreement, now there’s a conversation—
Ron: —that has to come.
Dave: —where you unveil that to the kids; right?
Ron: That’s right.
Dave: And that’s going to be emotional.
Ron: It is.
Dave: Because mom and dad have made a decision, and they’re good with it; but, now, when I roll that out to my kids”—by the way, I’m sitting here, listening to this, going, “I was that kid,”—there was never a conversation. It was like, “Oh, all Dad’s money now goes to my stepmom and my stepbrother.”
Ron: And what statement did that make to you?
Dave: Oh, “[I’m of] no value”; it was emotional.
Ron: See, that’s the below-the-surface comment—that’s the impact; you felt unvalued. Maybe that really wasn’t what anybody would’ve intended, but that is what came through. If there had been a conversation to say: “I’m acknowledging there’s going to be some changes, and we regret that. These are what the changes are, but please know you are valuable.”
Ann: That conversation is so important. I think it would be difficult; but I think, even for the kids processing—to hear their father or mother talk about that—that’s an act of love, because dialogue can continue to happen. And even their emotions can come out, but it can continue to be resolved in time.
Ron: The alternative is to not have that conversation. Think about it: when you’re aging and starting to lose your memory—and now, people are saying, “Well, Dad, what did you plan for us?”—everything gets worse. When you have those awkward, but important conversations—again, hear the purpose—you are helping your family merge. It might be a moment, where it brings something to the surface, that is difficult and needs some forgiveness and work through. Yet, on the other side of that, you’re not only dealing with the money stuff; but more important—much, much more importantly—you’re helping to solidify expectations and relationships within your home.
Bob: This is all messy and complicated. You and your coauthors have made it less complicated. You’ve found a solution—ways for folks to navigate through complicated waters—and that takes care of some of the mess. This may not be the silver bullet that makes everything easy; but this book, The Smart Stepfamily Guide to Financial Planning, will make things better than they would otherwise be. We can’t guarantee it’s going to be sunshine and unicorns; right? But we can guarantee that, if you press into this and you do what’s here, it’s going to go better for you, long term, in your relationships and in how your money gets handled.
I’m so grateful for the time it took to put all of this together and for your coauthors and the expertise they bring into this. To have a financial planner and an estate attorney coming alongside somebody, who understands the relational dynamics as well as you do—that’s a gift to the body of Christ. Thank you for this. Thanks for the time on FamilyLife Today.
Ron: Thank you!
Bob: We’ve got copies of Ron’s book, The Smart Stepfamily Guide to Financial Planning. He wrote it with Greg Pettys and David Edwards. You can go to our website, FamilyLifeToday.com, to order your copy; or call to order: 1-800-FL-TODAY. Again, the book is called The Smart Stepfamily Guide to Financial Planning: Take Control of Your Blended Family Finances. Go to FamilyLifeToday.com to order your copy, or call 1-800-358-6329—that’s 1-800-“F” as in family, “L” as in life, and then the word, “TODAY.”
Keep in mind Ron has an event coming up in a few weeks. This was originally scheduled to be live in Houston. It’s now going to be a livestream event that is going to be held around the world so you have an opportunity to join with what we are hoping will be tens of thousands of people tuned in to spend time together talking about how to strengthen our relationships in blended families.
There’s more information about the Blended & Blessed livestream. Go to our website familylifetoday.com to find out how you can tune in on your own, as a couple, with a small group. That’s probably as big as it needs to get right now. You can go to familylifetoday.com for information about the upcoming Blended & Blessed livestream event that will happen on Saturday, April 25.
And with that I hope you and your family are able to worship together this weekend. Whether it is online as many of us are doing these days or you are in a situation where you can get together with other believers this weekend. Hope you are able to spend time worshipping the Lord.
Join us on Monday when we’ll meet a couple who found themselves successful in business and started thinking about how their business success could be used in a way that advances God’s kingdom. You’ll meet Gary and Marla Ringer on Monday. I hope you can join us for that.
I want to thank our engineer today, Keith Lynch, along with our entire broadcast production team. We got some extra help today from our friend, Mark Ramey. On behalf of our hosts, Dave and Ann Wilson, I’m Bob Lepine. We will see you back next time for another edition of FamilyLife Today.
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