Navigating Finances in Blended Families with Ron Deal and Greg Pettys

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That's 800-525-7000. This is Faith and Finance, biblical wisdom for your financial journey. Well, our guests are Ron Deal and Greg Pettis, authors of The Smart Step Family Guide to Financial Planning. Ron, Greg, great to have you back with us today. Oh, man, it's so exciting to be here. Thanks for having us.

Good to be on. Well, guys, your book, The Smart Step Family, is loaded with practical financial advice for blended families. I reference it on this broadcast often, but in particular, I want to focus on one area where you've come up with a way for couples in that situation as a blended family to promote peace and unity in their marriage. It's called the togetherness agreement, and I'd love for you to start there.

What is it and why is it so important? Well, let's just start with the context for what we're talking about. Couples who form a relationship when they've had a previous life, if you will. Maybe one of them has brought children to the relationship.

They are often in middle age or later in life. They have a history, a financial history. They have debt. They have expense.

They have all kinds of investments that perhaps they've been working on for years. And now we're merging. But we're not just merging money. We're merging relationship. We're merging children. We're merging parenting styles.

We're merging some sort of lost death or divorce has preceded this new marriage relationship. All of that rolls into any conversation about money. I just don't think people realize how complicated that is. It's one thing to say, oh, you know, so you've got what, three bank accounts and I've got two bank accounts. We've got all these investments. Let's just put all the money together.

Well, no, no, no, no. Immediately it starts to be about, oh, trust. And it's about, well, I couldn't trust the former spouse because they took me for every dime I had. So how am I going to make sure that doesn't happen again? It's about provision for me and for my children. I've got an aging parent.

How do I care for them? It is about all of those dynamics rolled up into a conversation about how many bank accounts you have. And so when we sat down, Greg and I and our other co-author David sat down and said, we want to write a book about financial planning in lended family situations. We have to take into consideration all of these dynamics. So we haven't just created something in the togetherness agreement.

Greg will tell you a little about that in just a second. It's not just about money. It is about providing and loving well and caring and creating trust in your relationship that goes the distance.

Exactly. It's about clarity on so many of these, like you said, emotionally charged issues. When we said, I do his kids, her kids, their kids. What did we mean? What were the details around our vision for an optimistic future together? And so we find that the togetherness agreement provides clarity to these emotionally charged issues. And in essence, as one couple said, we're writing the rules for our marriage with love and respect for both parties. And that's what's so key here is that we want to let love and respect lead. And yet there are very real practical issues that we have to navigate. And Ron, to your point, money issues are heart issues, right? So money is symptomatic of a deeper underlying spiritual values based conversation that does surface some really tough and yet exciting conversations if we'll lean into them.

The question is, we need a roadmap or how do we get a roadmap to navigate that? You know, a lot of things about blended families, including marriage and navigating money, have to do with the pain of the past. And pain creates fear, right?

My last spouse really hurt me. I don't want to have that happen again. So I'm going to be guarded with you. Well, you know, fear is not a good way to make decisions about anything. Spiritually, that doesn't work. You know, we don't want to approach God that way.

We don't approach the people we love that way. And so we try to help people create this togetherness agreement so it eliminates fear so that it is no longer a barrier to our oneness. Well, I'm looking forward to continuing to unpack this. What does it actually look like? Is it a binding legal agreement?

What goes into it? What about some of those touchy situations that will come up? What about a business? We'll deal with this and much more. Ron Deal and Greg Pettis with us today, authors of the Smart Step Family Guide to Financial Planning. Just around the corner, 800-525-7000.

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This institution is not federally insured. Thanks for joining us today on Faith and Finance. I'm Rob West, your host. This is where we apply God's wisdom to your financial decisions and choices. Joining me today are good friends Ron Deal and Greg Pettis, authors of The Smart Step Family Guide to Financial Planning. How do you navigate financial decisions with a blended family? And how do you even memorialize those decisions once you have those conversations?

And how do you do it in a way that's respectful and loving? Well, today we're talking about a great tool that Ron and Greg refer to in their book called a togetherness agreement, where it provides a roadmap for having these conversations and then memorializing them. And Greg, you actually advise folks to make this agreement, the togetherness agreement, a binding legal contract.

How will that help? And well, the marriage itself is a binding legal contract. Yes, that's a great question and we get it a lot. First of all, it provides specifics that are not clearly outlined in that general marriage binding contract. For example, I mean, the simple is how many accounts should we have?

Should we combine everything together all at once or have two or three accounts? Who gets the business? What does fair mean?

Is fair always equal? What are we going to do for our special needs child? What about the rights and roles of, well, grandchildren, step grandchildren, grandparents, step grandparents? Any party who has a loving interest in our future can be a part of the togetherness agreement. It'll also help the team, your whole financial team, the financial adviser, the attorney, the CPA, all your agents. They need to have an overarching document that explains why did we decide to do this? Why?

What were we thinking when we did that and so forth? You know, as Greg was talking, I was thinking, yes, marriage is a legal binding relationship. And yet, do you want to leave the future to the legal system of your assets and your money? You know, we've talked before about if you are married to somebody and spend 25 years together and your spouse dies and leave you all the assets and then you marry again in midlife. But don't make specific documents dictating where you want your money to go after you pass away. If you pass away and your second spouse marries somebody else and then they die, all of a sudden, all your money goes to that person's kids. Somebody you've never met, them and their children instead of your children, unless, you know, that's called inheritance drift, right?

It just sort of moves away from you. And nobody intended that. It just sort of happened unless you've made provision for where you want your money to go after your death. And in this case, and in that case, I should say, your children are provided for, you're provided for, your aging brother, sister, parent, whatever, whatever you're invested in goes where you want it to go. You don't want to just leave it to the legal system. You want to tell that system what to do with the things that you cherish.

That's so important and probably something that most folks haven't considered. Well, perhaps, guys, a story, an example would help to illustrate the power of this tool, the togetherness agreement. In the book, you include a story about a couple, Anthony and Jenny.

What was their situation and how did this tool help them? Greg's going to tell you in a minute a little bit about some of the specifics of what they came up with. But let me just set the stage. This goes back to how we started our conversation, the complexity that blended families often face. So Anthony has children. He also owns a company that he's been invested in most of his life that he's been building.

And he meets Jenny and she's a CPA. She's pretty successful. She's 36 years of age.

She has children of her own and she has an aging mother. OK, so on the surface, when couples say things like, you know, I love you, you love me, we're going to be a happy family. And I assume that means you'll just care for my kids if something terrible happens to me and I'll take care of your mother if something terrible happens to you. And the best of intentions don't necessarily work out that way just because you love one another. You really need to put it in writing. You really need to think it through.

You really need to talk it through. Because it could be that in the course of doing their togetherness agreement, Anthony, he's got an assumption that his oldest son gets his company. He's shown an interest in it. He's been invested in it.

He's interned there. He went to college with the intent of learning how to run a business and he's going to come back and work with dad. And then if dad ever retires, that's been in the works for years before Jenny ever showed up.

Yes. But if he doesn't express that clearly and openly, Jenny may have some assumptions of her own about what happens if he were to pass away. What happens to the company? Maybe she's got kids that are interested in that business.

Well, OK, so who's going to be in charge with that next generation of leadership? See, that's the kind of that's the sticky business getting down into the weeds. A togetherness agreement helps you get proactive so that you have a dialog and make those decisions before you ever have to deal with it. Greg, remind us what Anthony and Jenny, some of the things that they worked out.

Yes. So Anthony was 44 year old, very successful construction company owner. And as you said, Ron, he had two boys that he had promised we're going to get the company one day. Unbeknownst to Jenny, however, during their courtship and dating, he didn't disclose he had a gambling problem with some debt, had a low credit score, had a very controlling ex-wife, et cetera. Now, on the other side, Anthony didn't know that Jenny had really spent a lot of her hard earned money taking care of her mother, who was aging, as you mentioned. And she had promised her that, hey, mom, one day you can come live with me.

You know, I'll do whatever I can do to help you get through this. And so, you know, during the courtship, these things just don't come out so often is the case. And so the first thing that the togetherness agreement did is it created an arena for disclosure, an atmosphere for full transparency, which then created a mutual respect. Jenny found out about, you know, Anthony's gambling problem, felt compassion and they were entering him into a counseling session to get his credit score up. Meanwhile, they were going to say they agreed to have one joint budget account, but to keep two individual accounts until Anthony could raise his scores and get over this gambling problem. They also agreed that though Jenny and her daughter would not receive the company working with an attorney, they would create a trust and place some life insurance in the trust for Jenny and her daughter. They also worked with their agent to create long-term care solutions for the mother and to provide clarity about their future, which really relieved both of them of a lot of stress and reaffirmed their commitments to each other in a way that they really couldn't go that deep without a togetherness agreement. Now theirs was a legal document drafted by their attorney, but I wanted to make this point clear. Just having the discussion, just sitting down and even just jotting some things on a legal pad or the back of a napkin will create that first step of transparency in disclosure that will then help navigate these emotional issues.

That's so helpful. Boy, we are about out of time, guys. We're going to have to have you back because there's so much more I want to talk about here. Ron, quickly, when should this be done?

You know, ideally today. So if you're dating somebody, now's the time to start having that conversation. And if you're already married and you go, man, we've never really talked about this. I have a lot of assumptions.

We've never checked in with one another. Okay, then start today. And the book's designed to help you get a plan and start moving that direction. I love it. It's an absolutely essential tool for a blended family. Gentlemen, thanks for stopping by.

Thanks for having us. Thank you. Pick up a copy of the Smart Step Family Guide to Financial Planning wherever you buy books. All right, your calls are next. The number 800-525-7000. I'm Rob West and this is Faith and Finance.

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Find more information at kingdom advisers dot com slash get certified. Great to have you with us today on faith and finance. Delighted you're along with us today.

Here's our goal. We want to help you find God's heart as it relates to your role as a steward of his resources. We do that as we gather together each day on this broadcast and tackle your specific money questions, but all with the backdrop of a biblical worldview.

When you call 800-525-7000, you can get in the queue today. We'd love to tackle your very specific question, whether you're wrestling with maybe it's your spending plan, just trying to stay on budget. We realize that's harder than ever now. Perhaps you're thinking about wealth transfer and how to invest for the future, but also how to select that next steward and prepare the next steward.

That's a big idea. Maybe it's something simple. It doesn't seem simple, and often it's not. But getting that credit score up, you know, that can be really challenging, especially if you've had some financial challenges in your past. Maybe it's paying down debt.

Whatever it is in your financial life today, we'd love to tackle those questions. Our team is standing by. We're ready to take your calls. The number to call today, 800-525-7000. Again, that's 800-525-7000. You can call right now. In the news today, an interesting item about a town that's not giving up.

Listen to this. Back in the 1800s, immigrants were offered free land in the Midwest as an incentive to move to America. Something reminiscent of that is happening in the tiny town of, OK, you ready for this? Nahodisha, Kansas, population 2100.

A former oil town, Nahodisha, has struggled with a decline in drilling in the region, a dwindling population and rundown in housing. But now the town is offering some very attractive incentives for folks to move there in the hope of jumpstarting the town's economy. The town is offering to waive state income tax for two years, the system student loan repayment and provide free college tuition to folks who move there. Turns out that the city is not alone. Other communities across the country are providing cash incentives and voucher programs for people willing to relocate with the increase of work from home opportunities in the private sector. Moving to a new town, even one out on the prairie, is easier to do these days.

So if you don't like where you're currently living, well, this Nahodisha may be the place for you to check out. Again, it's out in Kansas. Just an interesting tidbit we found in the news today. Thought you might enjoy that anecdote. To Iowa. Hi, Perry.

Go ahead. It's a two-part question. The first part is, what's the best way to protect yourself from identity theft? And the second part is, our home is paid for and what's the best way to protect ourselves so somebody can't come in and put a mortgage on it or a lien on it without us knowing about it?

Yeah, great question. So let's start with the identity theft piece. The best way, hands down, to protect yourself against identity theft is to freeze your credit at all three credit bureaus. This is free. It'll put a four-digit PIN number on your credit file.

You'll want to do it for you and your wife. And that would prevent someone from coming in in an unauthorized way, opening an account in your name, fraudulently. Because when they attempt to do so and they try to pull the credit, which they always do, they would not be able to because they don't have the PIN number.

So that's number one. I think the second is to use strong, unique passwords. So unique, meaning it's not the same one across all your accounts. And strong, meaning you've got a long string of characters and I would probably use a password manager to generate those passwords and then store them securely. Third would be what's called two-factor authentication.

Most people do it through SMS messaging, text messaging, where the two-factor is sent to you. That's not as secure as what's called an authenticator app. And so all of these banking and other companies that offer two-factor authentication will allow you to use an authenticator app. And that would be the most secure way. Google has one.

There's a number of others. You also want to make sure that you're not using public Wi-Fi to log into your secure accounts. You want to make sure that you're checking your credit reports regularly. I know I'm giving you a lot here, but I'll just kind of finish up with be aware of phishing scams as well.

Don't click on links in emails or give out your information over the phone, no matter who somebody says they represent, unless you've initiated the call or you've gone directly to their website to get their phone number or information. Does that all make sense? Oh, yes, it does. Okay, good.

So those would be kind of some best practices. With regard to your house, you know, we don't think it's worth the money to get what's called title lock insurance because it doesn't lock anything. It only notifies you if someone attempts to falsify your deed, which you can do on your own. And if somebody tried to foreclose on you because somebody fraudulently transferred your deed, took out a mortgage that was not paid, well, they wouldn't be able to because that would be fraudulent and you can't foreclose on someone that would be, you know, fraudulent conveyance. And so it would be thrown out in court because of the fraud. So what do you do?

Well, I would contact your county records office and see if many of them now offer this, they can place an alert on your particular record, such that if there was ever any changes, you would be alerted to it. And that's free. And that would probably be a great defense. And it doesn't require you to spend any money, which again, I think is unnecessary. It's a very low risk. And they they're not doing anything you can't do yourself. Okay, very good. Thank you. All right, Perry, thanks for calling today. Let's finish up today in Chicagoland. Hi, May.

How can I help? I'm calling regarding my estate planning. And I remember somewhere in the Bible, it says we are required or we should leave something for our children and our grandchildren.

How much for our grandchildren? Hmm. Yeah, it's interesting what you're referring to.

And we could spend the whole program on this and maybe we should hear sometime soon. But you're talking about Proverbs 13 22, a good man leaves an inheritance to his children's children. Now, keep in mind, anytime we read God's Word, we need to do a little bit more digging to understand what is the general truth this verse is stating. And so we need to look at the verses immediately surrounding the verse in question.

And verses in Proverbs are regularly coupled together with other verses to express a broader truth. And I think the idea here is the good man in quotes, spoken of is good because he's righteous. And as such, we can then ask what kind of inheritance a righteous person in Israel during this time would be able to leave to his family. Because remember, this verse was written to mostly poor farmers living in a land based society. And I think the one thing that every righteous person could pass along to his family is wisdom. And I think we need to focus on this by teaching his family how to worship the giver of the land Yahweh and how to honor him by not squandering the land through laziness or unrighteousness. So I think we need to focus on that as being the primary idea here. Now, does that mean we shouldn't leave an inheritance?

No, I think we absolutely can. Because part of your role is to say as the steward of these resources, who is the next steward and are they prepared? Hopefully that gives you a few things to think about. And I want to send you a book called Splitting Errors by Ron Blue that I think will help you navigate this May. It'll be our gift to you. So stay on the line. We'll get that right out to you. It was a great question. I wish we had more time for it, but hopefully that helps. Big thanks to my team today. Amy, Jim, Dan, Tiara. We'll see you next time. God bless you. faith and finance is provided by faith by and listeners like you.