There are many family structures today. Some are traditional, including married couples and their children, while others are non-traditional, including single parents to single moms, interfamilial households, same-sex parents, and stepfamilies. Each type of family requires its unique approach to financial and estate planning. The tax rules that govern these types of families may also be very different.
For example, same-sex couples may need to consider different issues regarding inheritance and estate planning. And unmarried couples may need to take special steps to ensure that their assets are protected in the event of a breakup. Let’s take a closer look at how wealth management works for different families, what strategies work best depending on the situation, and how to set goals and manage your finances and estate plans so you can take good care of your family.
What Is A Non-Traditional Family?
A non-traditional family is a family that does not follow the traditional nuclear model of families. A family can be considered non-traditional if one or more parents are absent, divorced, widowed, or don’t follow “traditional” social norms.
In recent years there has been an increase in the number of families who fall under this category because they have found it difficult to conform to traditional norms regarding marriage and parenthood. Theoretically, most families consist of two biological parents and their children, but society recognizes many relationships outside these conventional boundaries as familial.
Why Is Wealth Management For Non-Traditional Families Important?
Wealth management is a must for all families, but it is especially important for non-traditional families because they often have different financial needs than traditional families. Wealth management can help families:
For non-traditional families, wealth management can help them save money in a few ways. One way is through investment planning. Wealth management can help families invest their money in a way that is tailored to their specific needs and goals. This can help them achieve their financial goals faster and with fewer risks.
Another way that wealth management can help non-traditional families is by investing their money. Wealth management can help families invest in a variety of assets and vehicles. This can help them grow their wealth over time and provide them with a more secure financial future.
Secure Their Financial Future
Finally, wealth management can help non-traditional families secure their financial future. Wealth management can help families create a plan to safeguard their assets and provide for their future needs. This can help them avoid financial problems down the road and provide for their family’s future.
Wealth planners specialize in working with non-traditional families. These professionals can help you navigate the complicated financial landscape, and they can guide how to protect your assets best. Whether you’re married, single, or in a same-sex relationship, there’s a wealth planner who can help you achieve your financial goals.
Wealth Management For Traditional Vs. Non-Traditional Families
It’s important to know the difference between managing wealth for a traditional family Vs. a non-traditional family. They both have different needs and require different approaches. Let’s take a look at some of the most important differences:
Risk Tolerance: Traditional families are generally more risk-averse than non-traditional families. This means they are more conservative with their investments and less likely to take on risky ventures. This is because traditional families have more to lose if things go wrong.
Investment goals: Traditional families tend to have different investment goals than non-traditional families. For example, traditional families may be more focused on preserving capital and generating income, while non-traditional families may be more focused on growth and capital appreciation.
Time horizon: Traditional families usually have longer time horizons than non-traditional families. This means they can afford to take on more risk because they have a longer time frame to recover from any losses.
Inheritance planning: Traditional families often have complex inheritance planning needs that must be considered when managing their wealth. Non-traditional families, on the other hand, often do not have such complex needs and can therefore be managed with a simpler wealth management strategy.
Wealth Management Challenges For Non-Traditional Families
Families have been struggling with the increasing costs of living and dwindling resources. As a result, more and more families are turning to wealth management for help in protecting their assets and preserving their standard of living.
Several challenges may arise for them when managing their wealth. The challenges include:
- Communicating with family members about their finances
- Dealing with the emotional aspects of money
- Creating a budget that meets everyone’s needs
- Navigating through tax and estate planning
Creating A Wealth Management Plan For A Non-Traditional Families
Creating a wealth management plan for a non-traditional family requires considering these unique challenges. The following steps can help you create a wealth management plan that meets the needs of your non-traditional family:
Define Your Goals
As with any wealth management plan, it is important to start by defining your long-term financial goals. What do you want to achieve? Do you want to retire early? Do you want to send your children to college? Once you know your goals, you can start developing a plan to achieve them.
Consider Your Unique Family Situation
Your non-traditional family may have unique circumstances to consider when developing your wealth management plan. Do you have children from a previous marriage? Do you have special needs children? Are there any other unique circumstances that need to be taken into account?
Create A Budget
Once you know your goals and have considered your unique family situation, you can start to create a budget. Determine how much money you will need to save each month from reaching your long-term goals. Make sure to factor in your income and expenses, including any debts that need to be paid off.
Invest For The Future
Investing is an important part of any wealth management plan. Investing allows you to grow your money while taking less risk than gambling or stock market speculation. When investing for the future, it is important to consider short-term and long-term goals.
Power Of Attorney
For non-married partners and other non-traditional families, it’s important to appoint a power of attorney. If you become sick or gravely injured, some hospitals may give you trouble for not being related to the patient. Having a power of attorney can help you in these cases.
Power of attorney’s are also great help for finances in case assets and accounts aren’t shared. It’s best to avoid any potential issues. Ensuring your partner is taken care of if something happens to you is key. Social security benefits, pension, and IRA options are limited and most likely not available if you’re not married. Transferring your assets could also be burdensome as there may be a gift and estate taxes that will need to be paid.
You need to consider many things when planning your estate if you’re part of a non-traditional family. If you’re not married, you need to consider all the possible issues that could come from not being legally together. Let’s look at some things you need to set up to protect your family.
Rights For Your Unmarried Partner: There are few provisions to protect your partner if you are unmarried. Most states will pass along your assets to your legal spouse or children, so it’s important to establish which rights you would like to pass to your partner in case you die or become incapacitated.
Set-up Trusts: Setting up a trust gives you more options to ensure you’re taking care of everything you need. Will’s tend to be less flexible, and you’re unable to be as detailed with your wishes as with trusts. Trusts allow you to plan in detail; you name a trustee and provide instructions, such as letting someone live in your house for some time and then passing ownership over to someone else after many years.
Prenuptial agreements: If you’re entering a new marriage after having kids from a previous relationship or marriage, a prenup agreement can save you from potential troubles. Both parties in the relationship must discuss financial plans and other important information and put it in writing to ensure both are on the same page and there aren’t any misunderstandings down the line. You can always go back and change things according to the situation.
Set Goals: Knowing your goals and what you want to achieve with your estate planning is key. Being in a non-traditional family gives you a little more flexibility to plan. Since everyone’s situation is different, there are many factors to consider. Create a plan of what you find most important and discuss it with an estate planning professional to set up all the necessary documents to ensure your goals are met.
With careful planning, you can ensure that your loved ones are taken care of financially even after you’re gone.
Protect Your Family
At the end of the day, whether your family is traditional or non-traditional, they’re still family, and you want to do what you can to protect them. At Nesso Wealth, we strive to give you the safety you need to do so. We’ll work alongside you to create a plan to meet your needs and goals.
Our professional Nesso Wealth team will give you all the information necessary to understand every detail of your plan. We’ll walk you through our process and work with you to keep it updated as your circumstances change. Don’t hesitate to reach out to learn more about how we can help.