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In the 1970s, The Brady Bunch made a blended family look like super fun. Blended families are now so common that 96 per cent of professional service workers who participated in a recent survey said they currently advise this type of family, while three-quarters say they’ve seen an increase of them in the past decade.AP/The Associated Press

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Working on estate plans with clients can be a challenge at the best of times, but throw new spouses and stepchildren into the mix, and those trials multiply fast.

A recent survey from TMF Group and the Society of Trust and Estate Practitioners (STEP) shows that almost three in four of the respondents (71 per cent) across multiple service-oriented industries (lawyers, tax advisors, accountants, wealth managers) see the rise in the complexity of family dynamics as a challenge. Another quarter sees this resulting in more family breakdowns and even litigation.

Matt Stiller, certified financial planner with Stiller Financial at FundEx Investments Inc. in London, Ont., says emotions are heightened with blended families, including feelings over fairness.

“I wouldn’t even say it’s about dollars and cents,” he says. “It’s about opportunity, equality, growth, safety, and comfort.”

Fortunately, there are several holistic strategies advisors can use to mitigate the risks and keep blended families together – and that combination of soft skills and financial expertise is needed more than ever.

Blended families are now so common that 96 per cent of participants to the TMF Group/STEP survey said they currently advise this type of family, while three-quarters say they’ve seen an increase in the past decade.

That’s hardly surprising considering that about 5.3-million people had gone through a divorce or separation in the 20 years up to 2017, according to Statistics Canada. About a quarter of those had at least one child when they split.

Some blended families are easier to work with than others, though, says Justine Zavitz, advisor and vice president at Zavitz Insurance & Wealth in London, Ont., adding that sometimes, there’s no drama and anger over someone set to inherit more than the others.

“It’s so different, depending on the family,” she says. “Some families come together and it’s like they’re meant to be. They’re like the Brady Bunch,” referring to the U.S. sitcom from the 1960s and 1970s in which two widowed parents merge families idealistically.

But regardless of how harmonious the relationship appears to be, Ms. Zavitz says she still takes time to talk to all family members and, more importantly, listen.

How to figure out family dynamics with kids

She tries to determine the family’s internal workings and answer questions such as are the former spouses amicable? Do the children like the new spouse and vice-versa? Do the kids get along? She also wants to know what each new spouse is bringing to the marriage financially.

“Is one a super successful breadwinner and the other a stay-at-home parent?” she says. “Because that creates a lot more planning and food for thought about protecting clients and what they’ve accomplished for their kids.”

Mr. Stiller also asks deep questions that encourage family members to be open about intentions and priorities.

For example, does one spouse feel that wealth earned from the sale of a business should be distributed only to their own children upon their death? Or is one spouse bringing substantial debt into the marriage and the other spouse wants to ensure their kids’ estate funds won’t be affected negatively by that.

“You know it’s when the skeletons come out of the closet that all things blow up,” Mr. Stiller says. “But when everyone has an idea of what’s going on, the odds of family disagreements and drama disappear if that’s communicated ahead of time.”

The question of whether to involve the children in these talks can be a tricky one, says Tony Maiorino, vice-president and director, head of RBC Wealth Management Services in Toronto.

A lot depends on age and maturity. Still, it’s important that advisors remember who their first priority is – the parent and stepparent.

“[They] earned and brought the money in,” he says. “It’s their wealth we’re talking about, so making sure they’re comfortable with what’s happening is the number one consideration.”

It’s also important to include spouses of adult children in the conversation. Otherwise, there could be some future issues.

“You don’t just have to corral the children of the two individual families. You have to corral the partners of the children because they have significant influence,” Mr. Maiorino says.

As an example, he points to a situation in which an adult child might be willing to let a stepsibling inherit the family cottage someday, but then their spouse finds out and disagrees, leading to another callback.

Important to work with other professionals

These complications point to why working closely with other professionals – particularly estate lawyers who can get everything down in writing – is a must. Collaborating can also lead to new ideas.

For example, it’s often a good idea that blended families select a non-family member to be the executor so there’s no bias toward one side of the family, or to choose a family member from each side as co-executors.

In other cases, a lawyer or accountant might recommend using a trust to secure the estate so the surviving stepparent can’t change the will after the death of the spouse and leave everything to their own children.

While an advisor can help build the plan in the initial stages by having those long and vital conversations with multiple family members, “there’s no replacement for a lawyer,” says Mr. Maiorino, who is in a blended family himself. Even with his decades of financial experience, he admits his own estate planning hasn’t been easy.

“It’s difficult because I love all my children,” he says of his three kids, two of which are from a previous relationship. “It just requires sitting down, talking about it, and working through it together.”

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