August 25, 2025 • 30 mins
Navigating love, legacy, and liquidity- this episode of Something More with Chris Boyd dives deep into the financial complexities of second marriages, blended families, and estate planning. Chris and Russ Ball explore how to protect your wealth, honor your relationships, and make smart decisions about cash flow, prenuptial agreements, and retirement readiness. Whether you're newly remarried or simply rethinking your financial future, this episode offers clarity, compassion, and actionable advice.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:01):
Welcome to Something More with Chris Boyd.
Chris Boyd is a certified financial planner, practitioner,
and senior vice president and financial advisor at
Wealth Enhancement Group, one of the nation's largest
registered investment advisors.
We call it Something More because we'd like
to talk not only about those important dollar
and cents issues, but also the quality of
life issues that make the money matters matter.
(00:23):
Here he is, your fulfillment facilitator, your partner
in prosperity, advising clients on Cape Cod and
across the country.
Here's your host, Jay Christopher Boyd.
Welcome, everybody.
Thanks for being with us for another episode
of Something More.
I'm here with Russ Ball.
We are both of the AMR team at
Wealth Enhancement.
Glad to have you joining us.
(00:44):
We thought we would take today's segment and
talk about some recent lessons learned.
We run into so many clients from one
week to the next, clients or prospective clients,
people come in for consultations.
As an aside, if ever you need some
help, we offer a complimentary consultation, so don't
hesitate to reach out.
(01:05):
In any event, we find that there are
some lessons that we run across from time
to time, and there might be some things
we could share.
Today, that's our focus.
We've had some interesting conversations, and among them,
we were talking with some people who are
going through marriage later in life.
(01:27):
Sometimes it's a remarriage, sometimes with a second
marriage, sometimes it's just found someone later in
life or after a passing for one spouse,
taking interest in having the possibility of another
marriage.
So how should we think about our structure
(01:50):
in our portfolios or in our estate planning
more specifically?
Russ, I was thinking that's maybe where we'll
start.
The first thing that comes to my mind
is when you have blended families.
We've seen numerous occasions when someone who had
(02:12):
a family or has a family has a
second marriage, and they might want, ultimately, their
new spouse to be cared for with the
resources of their wealth, while at the same
time, ultimately, wanting some of their wealth to
be assured to go to their children.
(02:38):
Now, sometimes it's blended children, all the children.
But how that is done, that can be
largely handled through an estate plan.
Yeah.
And these situations, I think it's fair to
say that they can become challenging when there's
relationships, money, it's kind of oil and water
(03:02):
sometimes.
But in my experience, so I'm part of
a family dynamic like that.
So my dad had had kids and then
he remarried and my brother and I are
a product of that second marriage.
And I think it's natural that there are
going to be things that come up.
(03:22):
And estate planning is a good way to
confront some of those topics that might be
challenging to discuss with family.
Confront sounds maybe, how about navigate?
Yes.
But absolutely.
Right.
So let's go through some like circumstances.
What I'm picturing is, okay, I have kids
(03:45):
from, I don't, but if one did like,
oh, I have kids from a prior marriage.
I want to make sure that they get
some of my resources after I'm gone.
Yeah.
Right.
So how do you do that?
Now, sometimes this can be challenging when someone
marries their spouse who happens to be notably
(04:08):
younger, then it could be challenging for when
will those kids ever see their inheritance, right?
If they're closer in age to the new
spouse, in this case, it could be male,
female, whatever it is, but how that works
out, it could be challenging.
(04:29):
So in those instances, maybe there's different types
of estate planning considerations.
Maybe you create some life insurance if you're
eligible and available to create some wealth with
that in mind to say, well, you may
not see it for a while, but I
want there to be something that's given.
But a certain type of trust document, a
(04:52):
qualified terminal interest, Q-tip trust can produce
the arrangements that we might typically want to
see.
Something where you say, I want my spouse
to be able to receive the benefits of
my wealth while they remain alive, but after
(05:15):
their passing, this part of the trust goes
to, and you can direct where that goes.
Maybe it's kids from a first marriage in
that scenario.
You mentioned a situation where in your family
situation, you're the product of the second marriage.
Do you have siblings from step-siblings or
(05:36):
whatever?
Yeah, I have siblings.
Have siblings.
So you could envision that circumstance where, okay,
well, what happens to the assets after the
fact?
Now, what if, as an example, the second
spouse says, well, I want to go to
(05:57):
my kids.
If everything just goes by joint property, it's
possible that things could be excluded.
People can be excluded.
So having the right kind of estate planning
in place could allow for things to be
done the way you want it to be
done.
And this requires a lot of navigating among
(06:21):
the family discussion.
What do we want?
And what's fair to, in the way you
want this to be arranged?
Certainly there can be complexities in thinking that
through and how to navigate that.
And I think that's probably why I said
confront because a lot of the time it
(06:41):
is very complicated.
And it could be confrontational.
It's probably confrontational.
There are a lot of dynamics at play.
So we see a lot of times when
there's no estate plan with all these factors
in mind because it's so challenging to untangle.
Yes.
And how are you going to have this
conversation among the family might be uncomfortable.
(07:03):
So you just avoid it.
Right.
And so then there's no real plan in
place.
And then it leads to more confrontation later
on among other family members.
Another thing that comes to my mind when
we talk about this topic is the idea
of when there is this second marriage, are
(07:25):
assets mingled or are they separate?
We came across an example recently where there's
a second family and a second marriage kind
of situation.
And this becomes one of those things.
(07:45):
Is it what's yours is mine and what's
mine is mine?
Or is it what's ours?
How do we navigate these circumstances?
Do we put everything into joint name of
(08:05):
some type or whether it's trust or whether
it's through joint ownership or are we keeping
segregated wealth?
This is mine.
I came into the marriage with this.
You came into the marriage with that.
These are decisions that have to be approached
and discussed and clarified, particularly when there's a
(08:27):
second marriage involved.
Brings us kind of to the topic of
prenuptial agreements.
I can see at times, I think it
would be difficult.
My wife and I did not have a
prenuptial agreement.
We both came into the marriage with virtually
nothing.
So it really didn't matter.
(08:47):
But what if you had differences in wealth
when you come into a marriage?
I've always kind of had the personal kind
of view that it seems kind of awkward
to say, hey, honey, I love you.
Let's talk about what happens if our marriage
fails.
(09:08):
It just seems kind of like it's almost
predicting failure, which we don't want to do.
But what are your thoughts about prenuptial agreements?
Well, certainly not romantic to be going to
a lawyer's office to sign a prenup or
(09:30):
whatever.
But my mom is a lawyer and she's
always thinking in these terms.
So definitely has drilled that into my brother
and my minds growing up.
I think one perspective is 50% of
(09:50):
marriages end up not working out.
I don't know if that's still the statistic.
I think that's the statistic for first time
marriages.
I think it's even higher for second marriages
that don't work out.
That don't work out.
Okay, interesting.
Well, I think it's just a confrontation of
(10:11):
the reality that different things can happen.
And it's not always one person's the enemy,
one person's a good guy, one person's a
bad guy.
But sometimes marriages don't work out.
And what better time to plan for what
would happen if other than when you're...
When you're both caring.
When you both like each other.
(10:33):
Rather than confrontational.
Exactly, exactly.
We were recently at a seminar from Boyd
and Boyd.
And someone asked, what's the best way to
prevent my assets from going to my daughter
(10:55):
-in-law, for example, in the case of
a divorce?
Oh, yeah.
And Keats, through trust, there are things you
can do to try to prevent that from
happening.
But Keats did say, the best thing you
could do is a prenup or a postnup.
And just legally, that's the most ironclad way.
And it's probably not the right way to
(11:17):
say it.
It's probably not ironclad.
Yeah, but I follow your point.
It's probably a sound way to approach it.
And in the case of estate planning for
someone worried about their child, their adult child,
not having to lose the wealth that they
are intending to have their child inherit to
(11:39):
a divorce.
As you mentioned, there are creditor protection features
within trust that can be utilized that Keats,
Boyd and Boyd often makes use of in
their estate planning conversation.
So that is a good point.
There are a variety of ways you can
approach this.
(12:00):
IRAs tend to be an asset that don't
go through the estate plan ordinarily.
But you can have some specialized trusts that
can help to pursue certain objectives without sacrificing
the tax deferred status of the IRA features.
(12:23):
So, okay, gotcha.
I think that there's some virtue to this
conversation to do a little planning in advance
while you care.
And they perhaps might have an easier time
finding consensus as to how you want to
handle things prior to the dissolution of a
(12:43):
marriage.
Yeah.
And like a worst case scenario, how would
we approach that kind of thing?
I think sometimes the challenge people run into
is, as you said earlier, it can be
a really difficult thing to talk about.
And like with most things with planning, the
(13:07):
more that's done in advance, the more deliberate
we are, the better outcomes we're likely to
have.
So whether it's thinking about your financial planning
in terms of this kind of an issue
for estate planning, but in the complexities of
a second marriage, sometimes these can be a
(13:30):
really important part of your planning.
Let's talk not about the estate planning component,
but about the cash flow.
And we run into this not just with
really with any kind of marriage or combined
effort, maybe people living together or whatever it
might be, but the notion that what do
(13:52):
I do when I'm bringing more to the
marriage, right?
Maybe it's capital, maybe it's wealth rather, maybe
it's income.
There's disparities that we run into in how
things could happen.
And how does that factor into how we're
thinking about our cash flow?
(14:14):
Who pays what?
Many times we run into families where they
opt for one bank account.
Everything goes in and money gets paid out.
I've talked about this in the past where
my wife and I, when our kids were
young, we ended up both writing checks on
(14:38):
the bank accounts.
I'm trying to pay a bill.
She's trying to pay for groceries.
There can be some challenges of operating out
of one account with multiple people.
So sometimes people opt for multiple accounts, two
accounts.
But what happens where?
Which bills get paid from what kind of
priority?
(14:58):
Whose money goes into what objective?
Sometimes people will do three accounts, his, hers,
and ours.
So this is a little bit of money
for your flexible spending, whatever it is, the
things you want.
Here's some money for the things I'm going
to prioritize, but here's our combined efforts.
(15:20):
So there's all kinds of approaches that we
see and all of which have practical considerations
about virtues and drawbacks.
Any comments about that topic?
Yeah.
Well, I've read a lot about the psychology
around these different considerations and one account, individual
(15:44):
accounts, the three account solution, his, hers, ours,
or whatever it is.
And basically the conclusion I've come to is
that there is some benefit of having possibly
three accounts or at least having your own
individual accounts for something to have some level
of, this is mine, this is my money
(16:07):
for doing whatever I want, or just the
feeling of independence over the course of a
relationship.
Because as I said earlier, relationships and money
are not often seamless, to put it lightly.
So I definitely would subscribe to the, you
(16:28):
each have your individual accounts that you came
into the relationship with, but I do think
that there is some benefit to having, whether
it be a credit card that you're both
using for essentials or a joint account that
you automatically route some money into where it's
like, this is a shared expense.
There's many ways to do it, but that's
kind of my take.
(16:48):
I think there is some validity to the
fact that there is some psychological aspect of
having some individual account that feels like, all
right, this is.
Yeah.
I think that one of the things I
would be inclined to do if you do
the three account approach, which I kind of
agree there can be merit to that, but
I would make sure that all of the
accounts are, or at least I would be
(17:10):
inclined to suggest have all three of the
accounts be joint accounts.
Yes.
Yes.
So that if anything were to happen to
one of you, there's no difficulty in accessing
the money.
I also think that you, you know, there's
transparency in all of this.
And even though you may say, well, I
wanted to buy this or that, this is
(17:30):
for my, you know, I'm using my money,
so to speak.
There has to be clarity about that in
some consensus that we agree that there are
some things you're going to use your money
for, and you're going to use money for
your things.
And that we've got consensus around the idea
of that.
(17:51):
But I think those are maybe good practices.
When it comes to the whole topic of
financial planning and whether it's in a married
situation or not, you know, I think we
want to come back to the idea that
financial planning in many respects is simply a
(18:11):
matter of decision-making.
It's prioritization.
It's about having clarity of objectives, having maybe
in some cases, having shared priorities and goals
in the process.
And so there can be challenges that we
face.
(18:32):
And we've run into people on the one
hand, they have plenty of wealth, but they're
facing retirement and they're in the decision of,
am I going to work longer or am
I going to start to spend less?
Because even though despite having wealth, the forecast
(18:54):
of things doesn't work the way they'd want
based on the level of spending they have.
So, you know, okay, what do we prefer?
What do we prioritize?
Do we want to spend less?
Do we want to work more?
Do we want to restructure the way our
wealth is designed?
There's room for any of the above, right?
(19:15):
Or some combination.
Other times we have people who, you know,
they have an abundance of wealth.
And so the question becomes, how much is
enough?
What's the right number?
What do we value with the time we
have?
How long?
None of us knows how long we have.
(19:36):
So we want to be finding that sweet
spot of how do we have the kind
of lifestyle that works for us, whether that
includes work or does not, you know, whether
work becomes optional or is still valuable.
People, you know, let's face it, people still
enjoy their involvement in, you know, the cognitive
(20:02):
stimulation, the social engagement, the paycheck coming in,
right?
All of the above, right?
So circumstances can be, I still want that
or no, I don't.
I'm done.
I'd like to get out.
But, you know, so when do you draw
that line?
What's the priority?
We've often talked about, you know, what comes
next?
You know, what do you focus on?
(20:22):
But sometimes the challenge is saying, hey, you've
got a plan that works.
You have permission.
And or, hey, you have to make some
choices.
And these are your choices.
We can give you counsel.
But and we can help you see how
(20:42):
much impact does that make?
If I, what if I do this?
What if I do that?
But ultimately, it's a matter of just having
an opportunity to have shared communication of what
do we prioritize?
Yeah.
I mean, it's definitely more gratifying to be
able to share, you know, a plan that
looks beautiful and fabulous.
(21:04):
Yeah, yeah.
Fabulous outcomes.
But, you know, part of this world, part
of this job is to, you know, have
this whole plan in place to show people,
all right, like this is working, this is
not working so much.
And to play around with these variables and
to see, you know, maybe we don't have
to go to one extreme or the other,
maybe we could find some sort of middle
(21:24):
ground that would work.
And, you know, it's they're difficult choices that
need to be made, difficult conversations that probably
have to be had.
But having the perspective of a big picture
plan really is beneficial because sometimes when the
money's coming in and going out and you
think, well, retirement, it's probably going to work
out like do a little math.
(21:46):
Yeah, it sounds about right.
I got a spreadsheet.
Yeah.
Yeah.
Oftentimes we've talked about this many times before
is people won't think about all the variables
that can come into play, all the factors,
all the expenses.
If you're not tracking your expenses meticulously, it's
a very hard thing to get a grasp
of.
You might paint a little too rosy a
(22:06):
picture sometimes because you go, well, let's see,
we've got the utilities, we've got the mortgage,
that'll be gone soon.
We got, you know, if you rattle off
a few, oh, we spend this much on
groceries.
OK.
But there's probably things you've overlooked, you know.
Oh, well, we probably do need to spend
(22:26):
some money on home repairs from time to
time.
Oh, we're going to need to buy a
car from time to time.
Oh, we're going to fill in the blank.
Right.
There's a very rare and sometimes people just
paint that picture as being too rosy.
Yeah.
And especially when we're thinking about retirement, because
that's you're entering a different stage of your
life where there are a lot of, you
(22:49):
know, it's not the same structure as you
had before.
It's not just, all right, I'm going to
go to work, work, come home, get some
dinner.
It's you have to create your world around
you the way that you envision it.
And so that could mean different expenses.
Opportunity.
Yeah.
Opportunity.
But, you know, it creates different expectations.
Maybe you want to take more vacations.
Maybe you want to spend half the year
(23:09):
somewhere else, whatever it may be.
Those are it's not it's not going to
be a fluid transition right from from working
life into retirement where your day to day
is exactly the same.
We had some people recently talking about the
idea that they wanted to spend more for
a while and then slow down.
Yeah.
That was interesting.
(23:30):
I mean, I think and then another instance
where they similar said we're going to spend
more now and then we're going to slow
down and then we're going to slow down
more.
You know, so there's all kinds of variables
that people envision.
And we I think we're the sounding board
oftentimes to help them navigate.
Is that realistic?
How much are you assuming?
(23:50):
What I think we should also mention here
is the idea of stress test.
So aside from have you thought of some
of the variables that are often overlooked, we
also need to say sometimes, hey, you know,
you've got your numbers, but maybe we should
(24:13):
include a little extra for health care as
an example, especially if you're retiring early.
Right.
Oh, Medicare won't kick in yet.
You're going to have some out of pocket
costs that could be expensive.
OK, now you're retired at 65.
OK.
But health care can grow at a higher
(24:35):
rate of inflation.
Let's separate those costs out and adjust them
at a higher rate of inflation.
What if you have long term care costs
at some point, presumably later in life?
Well, that can be a big drain on
the wealth.
Let's look if that works.
OK, that works great.
(24:55):
What if we have let's go through some
of those stress test variables, bad market conditions,
temporarily disruption?
What if we have consistently less return than
we might have expected?
What if we have consistently higher inflation?
What if we have less Social Security because
they don't solve the Social Security problem?
(25:16):
What if, what if, what if?
Right.
And there's a lot of others.
What if I live longer?
What if I die soon?
Higher taxes.
Higher taxes.
These are all things we can do with
some great software, and it's pretty efficient as
a way to do it.
It's probably a good idea to get a
second opinion when it comes to the financial
(25:37):
planning.
We look at this as the building block.
The financial plan is the building block on
which everything else is supported.
So it informs how we think about cash
flow.
It informs how we structure the portfolio.
It informs the liquidity, we presume.
It informs how we think about tax opportunities
(25:59):
or challenges, right?
How are we going to improve this tax
picture, etc.
So having the, and I think what we
try to do at Wealth Enhancement, which may
not be identical to other firms, is we
try to take an integrated approach to these
(26:20):
things.
We look for, the latest thing I think
people seem to latch onto is tax strategy.
People are so, I think, hungry for greater
integration into their planning for tax strategy and
opportunities, particularly as they get to retirement, thinking,
(26:42):
how are we going to make this more
tax efficient?
And really, it's something you can do at
any stage to try to improve on that.
But it's not just that.
So it's the estate plan.
It's the tax planning.
It's the, do we have risk that we
haven't accounted for?
How do we mitigate that risk?
Do we want to try to mitigate that
(27:04):
risk?
And so on, right?
Anyway, I'm rambling.
Yeah.
Well, and it's not just about retirement either.
It's the different milestones you reach in life.
It's your legacy planning.
It's how much do I want to save
for my child or grandchild's college education?
And how do I go about buying a
(27:24):
new house or selling a house?
These are all things that not everyone remembers
to talk to their advisor about from a
planning perspective, but that's all part of what
we do in this part of this integrated
planning approach.
We often talk about the idea of a
family can be an unexpected expense.
And when we do that, we talk about
(27:46):
kids usually for the retiree thinking about, oh,
what if my kids have a divorce or
the failure to launch or whatever it might
be?
But it can work the other way too.
We've seen in some conversations with clients where
they're having to figure out how are they
going to help their parents who have insufficient
(28:08):
resources navigate their needs for assistance.
So these are the kind of things that
we want to put into a plan, make
sure we can structure it in a way
that works for you to get an outcome
that fits your preferences and desires.
So in any case, Russ, what do you
think?
(28:29):
Lots of cover, right?
Let's just encourage you to think about your
financial planning and whatever kind of circumstance.
We started talking about remarriages, but any kind
of circumstance, these are the kind of variables
that we want to put together and give
some thought to.
And if you need help in that process,
(28:51):
that's why we're here.
You can come in for a complimentary consultation
and we're happy to be a resource to
you.
Don't hesitate to reach out to us either
by phone or by email and let us
be a resource to you.
Until next time, everybody keeps striving for something
more.
Thank you for listening to Something More with
(29:13):
Chris Boyd.
Call us for help, whether it's for financial
planning or portfolio management, insurance concerns, or those
quality of life issues that make the money
matters matter.
Whatever's on your mind, visit us at somethingmorewithchrisboyd
.com or call us toll free at 866
-771-8901.
(29:34):
Or send us your questions to amr-info
at wealthenhancement.com.
You're listening to Something More with Chris Boyd
Financial Talk Show, Wealth Enhancement Advisory Services and
Jay Christopher Boyd provide investment advice on an
individual basis to clients only.
Proper advice depends on a complete analysis of
all facts and circumstances.
The information given on this program is general
financial comments and cannot be relied upon as
(29:55):
pertaining to your specific situation.
Wealth Enhancement Group cannot guarantee that using the
information from this show will generate profits or
ensure freedom from loss.
Listeners should consult their own financial advisors or
conduct their own due diligence before making any
financial decisions.
Welcome to Something More with Chris Boyd.
Chris Boyd is a certified financial planner, practitioner,
and senior vice president and financial advisor at
Wealth Enhancement Group, one of the nation's largest
registered investment advisors.
We call it Something More because we'd like
to talk not only about those important dollar
and cents issues, but also the quality of
life issues that make the money matters matter.
(00:23):
Here he is, your fulfillment facilitator, your partner
in prosperity, advising clients on Cape Cod and
across the country.
Here's your host, Jay Christopher Boyd.
Welcome, everybody.
Thanks for being with us for another episode
of Something More.
I'm here with Russ Ball.
We are both of the AMR team at
Wealth Enhancement.
Glad to have you joining us.
(00:44):
We thought we would take today's segment and
talk about some recent lessons learned.
We run into so many clients from one
week to the next, clients or prospective clients,
people come in for consultations.
As an aside, if ever you need some
help, we offer a complimentary consultation, so don't
hesitate to reach out.
(01:05):
In any event, we find that there are
some lessons that we run across from time
to time, and there might be some things
we could share.
Today, that's our focus.
We've had some interesting conversations, and among them,
we were talking with some people who are
going through marriage later in life.
(01:27):
Sometimes it's a remarriage, sometimes with a second
marriage, sometimes it's just found someone later in
life or after a passing for one spouse,
taking interest in having the possibility of another
marriage.
So how should we think about our structure
(01:50):
in our portfolios or in our estate planning
more specifically?
Russ, I was thinking that's maybe where we'll
start.
The first thing that comes to my mind
is when you have blended families.
We've seen numerous occasions when someone who had
(02:12):
a family or has a family has a
second marriage, and they might want, ultimately, their
new spouse to be cared for with the
resources of their wealth, while at the same
time, ultimately, wanting some of their wealth to
be assured to go to their children.
(02:38):
Now, sometimes it's blended children, all the children.
But how that is done, that can be
largely handled through an estate plan.
Yeah.
And these situations, I think it's fair to
say that they can become challenging when there's
relationships, money, it's kind of oil and water
(03:02):
sometimes.
But in my experience, so I'm part of
a family dynamic like that.
So my dad had had kids and then
he remarried and my brother and I are
a product of that second marriage.
And I think it's natural that there are
going to be things that come up.
(03:22):
And estate planning is a good way to
confront some of those topics that might be
challenging to discuss with family.
Confront sounds maybe, how about navigate?
Yes.
But absolutely.
Right.
So let's go through some like circumstances.
What I'm picturing is, okay, I have kids
(03:45):
from, I don't, but if one did like,
oh, I have kids from a prior marriage.
I want to make sure that they get
some of my resources after I'm gone.
Yeah.
Right.
So how do you do that?
Now, sometimes this can be challenging when someone
marries their spouse who happens to be notably
(04:08):
younger, then it could be challenging for when
will those kids ever see their inheritance, right?
If they're closer in age to the new
spouse, in this case, it could be male,
female, whatever it is, but how that works
out, it could be challenging.
(04:29):
So in those instances, maybe there's different types
of estate planning considerations.
Maybe you create some life insurance if you're
eligible and available to create some wealth with
that in mind to say, well, you may
not see it for a while, but I
want there to be something that's given.
But a certain type of trust document, a
(04:52):
qualified terminal interest, Q-tip trust can produce
the arrangements that we might typically want to
see.
Something where you say, I want my spouse
to be able to receive the benefits of
my wealth while they remain alive, but after
(05:15):
their passing, this part of the trust goes
to, and you can direct where that goes.
Maybe it's kids from a first marriage in
that scenario.
You mentioned a situation where in your family
situation, you're the product of the second marriage.
Do you have siblings from step-siblings or
(05:36):
whatever?
Yeah, I have siblings.
Have siblings.
So you could envision that circumstance where, okay,
well, what happens to the assets after the
fact?
Now, what if, as an example, the second
spouse says, well, I want to go to
(05:57):
my kids.
If everything just goes by joint property, it's
possible that things could be excluded.
People can be excluded.
So having the right kind of estate planning
in place could allow for things to be
done the way you want it to be
done.
And this requires a lot of navigating among
(06:21):
the family discussion.
What do we want?
And what's fair to, in the way you
want this to be arranged?
Certainly there can be complexities in thinking that
through and how to navigate that.
And I think that's probably why I said
confront because a lot of the time it
(06:41):
is very complicated.
And it could be confrontational.
It's probably confrontational.
There are a lot of dynamics at play.
So we see a lot of times when
there's no estate plan with all these factors
in mind because it's so challenging to untangle.
Yes.
And how are you going to have this
conversation among the family might be uncomfortable.
(07:03):
So you just avoid it.
Right.
And so then there's no real plan in
place.
And then it leads to more confrontation later
on among other family members.
Another thing that comes to my mind when
we talk about this topic is the idea
of when there is this second marriage, are
(07:25):
assets mingled or are they separate?
We came across an example recently where there's
a second family and a second marriage kind
of situation.
And this becomes one of those things.
(07:45):
Is it what's yours is mine and what's
mine is mine?
Or is it what's ours?
How do we navigate these circumstances?
Do we put everything into joint name of
(08:05):
some type or whether it's trust or whether
it's through joint ownership or are we keeping
segregated wealth?
This is mine.
I came into the marriage with this.
You came into the marriage with that.
These are decisions that have to be approached
and discussed and clarified, particularly when there's a
(08:27):
second marriage involved.
Brings us kind of to the topic of
prenuptial agreements.
I can see at times, I think it
would be difficult.
My wife and I did not have a
prenuptial agreement.
We both came into the marriage with virtually
nothing.
So it really didn't matter.
(08:47):
But what if you had differences in wealth
when you come into a marriage?
I've always kind of had the personal kind
of view that it seems kind of awkward
to say, hey, honey, I love you.
Let's talk about what happens if our marriage
fails.
(09:08):
It just seems kind of like it's almost
predicting failure, which we don't want to do.
But what are your thoughts about prenuptial agreements?
Well, certainly not romantic to be going to
a lawyer's office to sign a prenup or
(09:30):
whatever.
But my mom is a lawyer and she's
always thinking in these terms.
So definitely has drilled that into my brother
and my minds growing up.
I think one perspective is 50% of
(09:50):
marriages end up not working out.
I don't know if that's still the statistic.
I think that's the statistic for first time
marriages.
I think it's even higher for second marriages
that don't work out.
That don't work out.
Okay, interesting.
Well, I think it's just a confrontation of
(10:11):
the reality that different things can happen.
And it's not always one person's the enemy,
one person's a good guy, one person's a
bad guy.
But sometimes marriages don't work out.
And what better time to plan for what
would happen if other than when you're...
When you're both caring.
When you both like each other.
(10:33):
Rather than confrontational.
Exactly, exactly.
We were recently at a seminar from Boyd
and Boyd.
And someone asked, what's the best way to
prevent my assets from going to my daughter
(10:55):
-in-law, for example, in the case of
a divorce?
Oh, yeah.
And Keats, through trust, there are things you
can do to try to prevent that from
happening.
But Keats did say, the best thing you
could do is a prenup or a postnup.
And just legally, that's the most ironclad way.
And it's probably not the right way to
(11:17):
say it.
It's probably not ironclad.
Yeah, but I follow your point.
It's probably a sound way to approach it.
And in the case of estate planning for
someone worried about their child, their adult child,
not having to lose the wealth that they
are intending to have their child inherit to
(11:39):
a divorce.
As you mentioned, there are creditor protection features
within trust that can be utilized that Keats,
Boyd and Boyd often makes use of in
their estate planning conversation.
So that is a good point.
There are a variety of ways you can
approach this.
(12:00):
IRAs tend to be an asset that don't
go through the estate plan ordinarily.
But you can have some specialized trusts that
can help to pursue certain objectives without sacrificing
the tax deferred status of the IRA features.
(12:23):
So, okay, gotcha.
I think that there's some virtue to this
conversation to do a little planning in advance
while you care.
And they perhaps might have an easier time
finding consensus as to how you want to
handle things prior to the dissolution of a
(12:43):
marriage.
Yeah.
And like a worst case scenario, how would
we approach that kind of thing?
I think sometimes the challenge people run into
is, as you said earlier, it can be
a really difficult thing to talk about.
And like with most things with planning, the
(13:07):
more that's done in advance, the more deliberate
we are, the better outcomes we're likely to
have.
So whether it's thinking about your financial planning
in terms of this kind of an issue
for estate planning, but in the complexities of
a second marriage, sometimes these can be a
(13:30):
really important part of your planning.
Let's talk not about the estate planning component,
but about the cash flow.
And we run into this not just with
really with any kind of marriage or combined
effort, maybe people living together or whatever it
might be, but the notion that what do
(13:52):
I do when I'm bringing more to the
marriage, right?
Maybe it's capital, maybe it's wealth rather, maybe
it's income.
There's disparities that we run into in how
things could happen.
And how does that factor into how we're
thinking about our cash flow?
(14:14):
Who pays what?
Many times we run into families where they
opt for one bank account.
Everything goes in and money gets paid out.
I've talked about this in the past where
my wife and I, when our kids were
young, we ended up both writing checks on
(14:38):
the bank accounts.
I'm trying to pay a bill.
She's trying to pay for groceries.
There can be some challenges of operating out
of one account with multiple people.
So sometimes people opt for multiple accounts, two
accounts.
But what happens where?
Which bills get paid from what kind of
priority?
(14:58):
Whose money goes into what objective?
Sometimes people will do three accounts, his, hers,
and ours.
So this is a little bit of money
for your flexible spending, whatever it is, the
things you want.
Here's some money for the things I'm going
to prioritize, but here's our combined efforts.
(15:20):
So there's all kinds of approaches that we
see and all of which have practical considerations
about virtues and drawbacks.
Any comments about that topic?
Yeah.
Well, I've read a lot about the psychology
around these different considerations and one account, individual
(15:44):
accounts, the three account solution, his, hers, ours,
or whatever it is.
And basically the conclusion I've come to is
that there is some benefit of having possibly
three accounts or at least having your own
individual accounts for something to have some level
of, this is mine, this is my money
(16:07):
for doing whatever I want, or just the
feeling of independence over the course of a
relationship.
Because as I said earlier, relationships and money
are not often seamless, to put it lightly.
So I definitely would subscribe to the, you
(16:28):
each have your individual accounts that you came
into the relationship with, but I do think
that there is some benefit to having, whether
it be a credit card that you're both
using for essentials or a joint account that
you automatically route some money into where it's
like, this is a shared expense.
There's many ways to do it, but that's
kind of my take.
(16:48):
I think there is some validity to the
fact that there is some psychological aspect of
having some individual account that feels like, all
right, this is.
Yeah.
I think that one of the things I
would be inclined to do if you do
the three account approach, which I kind of
agree there can be merit to that, but
I would make sure that all of the
accounts are, or at least I would be
(17:10):
inclined to suggest have all three of the
accounts be joint accounts.
Yes.
Yes.
So that if anything were to happen to
one of you, there's no difficulty in accessing
the money.
I also think that you, you know, there's
transparency in all of this.
And even though you may say, well, I
wanted to buy this or that, this is
(17:30):
for my, you know, I'm using my money,
so to speak.
There has to be clarity about that in
some consensus that we agree that there are
some things you're going to use your money
for, and you're going to use money for
your things.
And that we've got consensus around the idea
of that.
(17:51):
But I think those are maybe good practices.
When it comes to the whole topic of
financial planning and whether it's in a married
situation or not, you know, I think we
want to come back to the idea that
financial planning in many respects is simply a
(18:11):
matter of decision-making.
It's prioritization.
It's about having clarity of objectives, having maybe
in some cases, having shared priorities and goals
in the process.
And so there can be challenges that we
face.
(18:32):
And we've run into people on the one
hand, they have plenty of wealth, but they're
facing retirement and they're in the decision of,
am I going to work longer or am
I going to start to spend less?
Because even though despite having wealth, the forecast
(18:54):
of things doesn't work the way they'd want
based on the level of spending they have.
So, you know, okay, what do we prefer?
What do we prioritize?
Do we want to spend less?
Do we want to work more?
Do we want to restructure the way our
wealth is designed?
There's room for any of the above, right?
(19:15):
Or some combination.
Other times we have people who, you know,
they have an abundance of wealth.
And so the question becomes, how much is
enough?
What's the right number?
What do we value with the time we
have?
How long?
None of us knows how long we have.
(19:36):
So we want to be finding that sweet
spot of how do we have the kind
of lifestyle that works for us, whether that
includes work or does not, you know, whether
work becomes optional or is still valuable.
People, you know, let's face it, people still
enjoy their involvement in, you know, the cognitive
(20:02):
stimulation, the social engagement, the paycheck coming in,
right?
All of the above, right?
So circumstances can be, I still want that
or no, I don't.
I'm done.
I'd like to get out.
But, you know, so when do you draw
that line?
What's the priority?
We've often talked about, you know, what comes
next?
You know, what do you focus on?
(20:22):
But sometimes the challenge is saying, hey, you've
got a plan that works.
You have permission.
And or, hey, you have to make some
choices.
And these are your choices.
We can give you counsel.
But and we can help you see how
(20:42):
much impact does that make?
If I, what if I do this?
What if I do that?
But ultimately, it's a matter of just having
an opportunity to have shared communication of what
do we prioritize?
Yeah.
I mean, it's definitely more gratifying to be
able to share, you know, a plan that
looks beautiful and fabulous.
(21:04):
Yeah, yeah.
Fabulous outcomes.
But, you know, part of this world, part
of this job is to, you know, have
this whole plan in place to show people,
all right, like this is working, this is
not working so much.
And to play around with these variables and
to see, you know, maybe we don't have
to go to one extreme or the other,
maybe we could find some sort of middle
(21:24):
ground that would work.
And, you know, it's they're difficult choices that
need to be made, difficult conversations that probably
have to be had.
But having the perspective of a big picture
plan really is beneficial because sometimes when the
money's coming in and going out and you
think, well, retirement, it's probably going to work
out like do a little math.
(21:46):
Yeah, it sounds about right.
I got a spreadsheet.
Yeah.
Yeah.
Oftentimes we've talked about this many times before
is people won't think about all the variables
that can come into play, all the factors,
all the expenses.
If you're not tracking your expenses meticulously, it's
a very hard thing to get a grasp
of.
You might paint a little too rosy a
(22:06):
picture sometimes because you go, well, let's see,
we've got the utilities, we've got the mortgage,
that'll be gone soon.
We got, you know, if you rattle off
a few, oh, we spend this much on
groceries.
OK.
But there's probably things you've overlooked, you know.
Oh, well, we probably do need to spend
(22:26):
some money on home repairs from time to
time.
Oh, we're going to need to buy a
car from time to time.
Oh, we're going to fill in the blank.
Right.
There's a very rare and sometimes people just
paint that picture as being too rosy.
Yeah.
And especially when we're thinking about retirement, because
that's you're entering a different stage of your
life where there are a lot of, you
(22:49):
know, it's not the same structure as you
had before.
It's not just, all right, I'm going to
go to work, work, come home, get some
dinner.
It's you have to create your world around
you the way that you envision it.
And so that could mean different expenses.
Opportunity.
Yeah.
Opportunity.
But, you know, it creates different expectations.
Maybe you want to take more vacations.
Maybe you want to spend half the year
(23:09):
somewhere else, whatever it may be.
Those are it's not it's not going to
be a fluid transition right from from working
life into retirement where your day to day
is exactly the same.
We had some people recently talking about the
idea that they wanted to spend more for
a while and then slow down.
Yeah.
That was interesting.
(23:30):
I mean, I think and then another instance
where they similar said we're going to spend
more now and then we're going to slow
down and then we're going to slow down
more.
You know, so there's all kinds of variables
that people envision.
And we I think we're the sounding board
oftentimes to help them navigate.
Is that realistic?
How much are you assuming?
(23:50):
What I think we should also mention here
is the idea of stress test.
So aside from have you thought of some
of the variables that are often overlooked, we
also need to say sometimes, hey, you know,
you've got your numbers, but maybe we should
(24:13):
include a little extra for health care as
an example, especially if you're retiring early.
Right.
Oh, Medicare won't kick in yet.
You're going to have some out of pocket
costs that could be expensive.
OK, now you're retired at 65.
OK.
But health care can grow at a higher
(24:35):
rate of inflation.
Let's separate those costs out and adjust them
at a higher rate of inflation.
What if you have long term care costs
at some point, presumably later in life?
Well, that can be a big drain on
the wealth.
Let's look if that works.
OK, that works great.
(24:55):
What if we have let's go through some
of those stress test variables, bad market conditions,
temporarily disruption?
What if we have consistently less return than
we might have expected?
What if we have consistently higher inflation?
What if we have less Social Security because
they don't solve the Social Security problem?
(25:16):
What if, what if, what if?
Right.
And there's a lot of others.
What if I live longer?
What if I die soon?
Higher taxes.
Higher taxes.
These are all things we can do with
some great software, and it's pretty efficient as
a way to do it.
It's probably a good idea to get a
second opinion when it comes to the financial
(25:37):
planning.
We look at this as the building block.
The financial plan is the building block on
which everything else is supported.
So it informs how we think about cash
flow.
It informs how we structure the portfolio.
It informs the liquidity, we presume.
It informs how we think about tax opportunities
(25:59):
or challenges, right?
How are we going to improve this tax
picture, etc.
So having the, and I think what we
try to do at Wealth Enhancement, which may
not be identical to other firms, is we
try to take an integrated approach to these
(26:20):
things.
We look for, the latest thing I think
people seem to latch onto is tax strategy.
People are so, I think, hungry for greater
integration into their planning for tax strategy and
opportunities, particularly as they get to retirement, thinking,
(26:42):
how are we going to make this more
tax efficient?
And really, it's something you can do at
any stage to try to improve on that.
But it's not just that.
So it's the estate plan.
It's the tax planning.
It's the, do we have risk that we
haven't accounted for?
How do we mitigate that risk?
Do we want to try to mitigate that
(27:04):
risk?
And so on, right?
Anyway, I'm rambling.
Yeah.
Well, and it's not just about retirement either.
It's the different milestones you reach in life.
It's your legacy planning.
It's how much do I want to save
for my child or grandchild's college education?
And how do I go about buying a
(27:24):
new house or selling a house?
These are all things that not everyone remembers
to talk to their advisor about from a
planning perspective, but that's all part of what
we do in this part of this integrated
planning approach.
We often talk about the idea of a
family can be an unexpected expense.
And when we do that, we talk about
(27:46):
kids usually for the retiree thinking about, oh,
what if my kids have a divorce or
the failure to launch or whatever it might
be?
But it can work the other way too.
We've seen in some conversations with clients where
they're having to figure out how are they
going to help their parents who have insufficient
(28:08):
resources navigate their needs for assistance.
So these are the kind of things that
we want to put into a plan, make
sure we can structure it in a way
that works for you to get an outcome
that fits your preferences and desires.
So in any case, Russ, what do you
think?
(28:29):
Lots of cover, right?
Let's just encourage you to think about your
financial planning and whatever kind of circumstance.
We started talking about remarriages, but any kind
of circumstance, these are the kind of variables
that we want to put together and give
some thought to.
And if you need help in that process,
(28:51):
that's why we're here.
You can come in for a complimentary consultation
and we're happy to be a resource to
you.
Don't hesitate to reach out to us either
by phone or by email and let us
be a resource to you.
Until next time, everybody keeps striving for something
more.
Thank you for listening to Something More with
(29:13):
Chris Boyd.
Call us for help, whether it's for financial
planning or portfolio management, insurance concerns, or those
quality of life issues that make the money
matters matter.
Whatever's on your mind, visit us at somethingmorewithchrisboyd
.com or call us toll free at 866
-771-8901.
(29:34):
Or send us your questions to amr-info
at wealthenhancement.com.
You're listening to Something More with Chris Boyd
Financial Talk Show, Wealth Enhancement Advisory Services and
Jay Christopher Boyd provide investment advice on an
individual basis to clients only.
Proper advice depends on a complete analysis of
all facts and circumstances.
The information given on this program is general
financial comments and cannot be relied upon as
(29:55):
pertaining to your specific situation.
Wealth Enhancement Group cannot guarantee that using the
information from this show will generate profits or
ensure freedom from loss.
Listeners should consult their own financial advisors or
conduct their own due diligence before making any
financial decisions.
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