Blended family - how to split finances

[Justworkingitout]

How do you split finances in a blended family and what do you do about assets from before the relationship and inheritance? My partner and I live together (not married but engaged) and we each have teenage children from a previous relationships. He earns a lot more than me but I have more assets (from before I met him). For those of you in a similar situation, how do you manage your financial affairs?

So we are tenants in common in the house ( I own more) but we split all bills 50/50 ( this might not be doable in your case but we earn similar amounts ) We are in the process of making really robust wills, I am protecting all of my assets.

I do not pay for his kids, he does not pay for mine.

in your case you could just split everything 50/50 on the basis that you have more to invest now but he pays more going forward, perhaps using a sliding scale until his payments have equaled out your investment?

We are in the same position as you. We share everything, joint bank for all wages (he earns 10x more than me). I put more of my assets into our joint property. Did buy it tenants in common but as time has gone on I don’t feel necessary and are looking to change it.
we each have 2 teens from previous and been together for 6 years.

I feel that’s it’s still equal in the fact if we split now, yes Iv invested more, but his wages covered the renovation works to our home and so increased value that way. So I wouldn’t actually worse off because of the value we added (I couldn’t have purchased this house without his wages)

Adding everything together makes us feel like a team and working towards our goals.

I couldn’t manage it any other way. We have too many outgoing to worry who’s paid for what and if it should be matched.

but we also have similar spending habits and trust the other 100% not to over spend on anything

but overall, with his wages and my assets, we’re looking at retiring 15 years early by putting everything together

I’d say you ring fence your pre-relationship assets, split bills based on income (eg if he earns £70k, you £30k he pays 70% of bills and you pay 30%). You each pay for your own DC’s needs.

do you own the home you live in or do you jointly own or rent?

We have a joint account for bills/mortgage/food and we both put the same amount in. We are tenants in common on the house (50/50) and have set up a deed of trust in our wills so that each of us are entitled to live in the house when the other dies, or sell and use the money for a different property, but ultimately our half goes to our own children.

Generally speaking we each pay for our own kids- if we have a day out altogether we usually put it on the joint account.

We have a very complicated split of our house (previously my house) which takes into account my equity in the house before I married him, and the fact that he invested some of his money in the house when he sold his own house. We earn similar so split monthly costs 50/50 but I don't pay for his kids or vice versa. My child will inherit my split of our assets, and his kids will inherit his split (if we don't spend it all before we die!)

Thanks everyone. That’s really useful. What about inheritance? He has just inherited (and obviously I’ve told him that’s 100 per cent his) but I haven’t yet inherited (again I’m likely to get more that my DP) but we are supposed to be getting married at some point and I understand I won’t be able to ring fence my inheritance for my children?

You can ring fence your inheritance for your children if you want to. You just need to put it in your will. We made our wills before we got married and they say something to the effect of “I intend that this will will not be revoked by my marriage”

We rent at the moment but very keen to buy eventually. His kids are with us a third of the year, one of mind is with us 90 per cent of the year and my other one is with us two thirds of the year. He earns three quarters more than me but my kids are with here with us for longer chunks. So hard to work out what’s fair on a day to day basis.

We pay towards household bills equitably based on % of salaries.

We pay for our own children. Our wills ringfence our assets for our own children.

The clause you refer to is to prevent one or both spouses from dying intestate should they not get round to making a new will after they get married. It's not a statement of these are my finances pre-marriage therefore I want to exclude XYZ assets from the marital pot. The surviving spouse could still challenge a will if the ring-fencing of said assets would leave them in financial need - hopefully though as OP's partner is the higher earner it won't become an issue. And obviously a will would have no effect with regard to ring-fencing inheritance etc in the event of separation/divorce.

The above is assuming you're in England/Wales - other jurisdictions differ (e.g. I believe you can't disinherit your children under Scottish law). Proper legal advice and/or a specialist will-writing service is needed.

Edited for typo

OP, I really recommend finding a solicitor who is a member of STEP as they will have expertise in all the things you mention for estate planning. You can enter your postcode to find a qualified member near you.

I’m not an expert, but we made our wills with a solicitor and were told this was the way to safeguard our children’s’ inheritance. So the house is spilt in a deed of trust as described and then I have left any other inheritance in percentages to my husband and children.

This is why a lot of step and blended family’s don’t work. family is family regardless of who is blood related. I chose to be with a man who has dc and he chose to be with me who also has dc. we all live together for 50% of the time. why should one set of children have nicer things than the other because their parent earns more?

if we didn’t share our money, my dh could afford much nicer holidays for his dc and him, whereas my money is tied up in property earmarked for deposits for my dc first homes? would that be fair? Our dc are all similar ages and so would see this divide and make for an unhappy family life. As it is now, we have cheaper holidays with a nicer one every 2nd year and they all now have a deposit for all of their first houses.

surly all children should be treated equally when a family comes together?

@Cantsleepcounting I think each family is different and it depends on so many factors such as the age and number of children, how often they see their other parent etc

Personally, I got very used to being in control of my money and my DC when I became a single parent and I wouldn’t want to give that up. If we shared all finances I would feel I would have to run it by DH every time I wanted to treat my DC to something, give them money for a day out, get our nails done together etc. Also mine are with us most of the time, his are here EOW so it wouldn’t really be fair on him to expect him to contribute towards my DC. It’s just simpler this way. Other examples are his DC have a lot of expensive music lessons, he shares the cost of that with his exW.

We do go 50/50 on groceries though, it’s just easier. And we do have shared holidays, and when they are all here we treat them the same- I wouldn’t take mine out to the cinema and not his for example!

OP's question refers to future inheritance received (as it was mentioned in context of her DP having already received an inheritance), and a will isn't necessarily going to safeguard/ringfence such inheritances if it would leave the surviving spouse in hardship e.g losing their home. It definitely won't have any impact if they divorce or separate as again, the needs of both parties will be considered so an inheritance might be included in the split of assets if both parties' needs can't be met without it.

The clause you mentioned isn't anything to do with deeds of trust etc, it simply means that a will in contemplation of marriage isn't automatically revoked upon that marriage like a will would normally be. It doesn't carry any more or less legal weight in and of itself.

But if she leaves her inheritance to her children in her will, then they will get it, unless her husband challenges it, right? I mentioned that clause just to show that, as you say, she can make a will before marriage and it will stay in place even if they do get married. The deed of trust is a separate thing.

@Cantsleepcounting I think it's personal preference. I've seen many posts on here with your approach and just as many who do something different.

But if she leaves her inheritance to her children in her will, then they will get it, unless her husband challenges it, right?

As long as she leaves her husband enough to live on if she dies and vice versa, then yes her own children will get it. (Even if they weren't a blended family the spouse can contest it if they don't have enough to live on.)

The only thing the OP and her DP have to be careful off is how they treat each others children. So if one of them has a 13 year old and the other treats that child like their biological child then they can contest their step-parent's will.

I was just clarifying because I read your original post as implying that if OP made a will with that clause, then it would somehow provide more protections over her assets because she'd done it before marriage, vs stipulating the exact same wishes in a will made post-marriage. All it does is save you the rtouble of getting your will redone/ensure there's no danger of dying intestate because you haven't got round to re-doing your will. Apologies if that isn't what you meant🙂

Apologies for all the edits btw - I'm crap at typing!

It's a bit morbid, but if you get married and then pass away then I think he will inherit everything. Your assets and money will go to your husband and his children. Your children might not get anything.

@ShakeNvacStevens I thought the clause meant that the will took precedence over a marriage, and that without it, everything would go to the spouse. I see what you mean now, we could have just made a new will after we got married.

Hi, I thought the correctly worded will (I can’t remember the wording but I think it’s mentioned above) overrides that and protects the assets for the children ie the other partner can live off the income from that asset but when the child reaches a certain age, they will inherit the asset?

I've read stories where person 1 dies and then their house and all their assets go to person 2. Person 2 dies but only mentions their children in their will, and not person 1's children. Not sure how to get around this but these stories are awful!

You are right, the deed of trust, which we have does exactly that. For us, the children only get it when we die. So, for example if I died first, DH can live in the house, sell it if he wants to and use the money to buy another house. But when he dies, my half still goes to my DC and his half goes to his DC. That is for the house we are living in, I imagine you can do the same for other assets?

Eg MIL’s second husband put in his will that she would continue to receive the income from his rental property after he died, but when she died the property went to his kids.

I would suggest you go to a solicitor, tell them what you want to happen after you die, and get advice on the best way to ensure that happens, as much as you can.