Planning Ideas for Blended Families using Life Insurance
Blended families are not unique in New Zealand. In fact over the last 70 years, there has been a significant shift in family structures.
Statistics New Zealand have put a huge focus on the change of the traditional family structure since the census undertaken in 2013.
The Ministry of Social Development has also placed a lot of resource to understand the change in our social make-up, based on the Families Commission publication The Kiwi Nest: 70 years of Change in New Zealand Families (2008), which will discuss how family forms and roles within families have changed over the past 70 years, and will consider the future implications for those interested in families. For the full article on this click here.
Four core functions of families can be identified. They are:
the nurturing, rearing, socialisation and protection of children
maintaining and improving the wellbeing of family members by providing them with emotional and material support
the psychological "anchorage" of adults and children by way of affection, companionship and a sense of belonging and identity
passing on culture, knowledge, values, attitudes, obligations and property from one generation to the next (Families Commission 2005).
How these functions are performed has changed over time and is likely to continue to change. Families today are different in many respects from families of yesteryear. An accurate appreciation of these differences and the current forms families take is a prerequisite to designing effective insurance policies and estate planning needs to support them in the future.
By far the most important document when looking at protecting all members of a blended family, whether it be children from different past relationships and future relationships or that of passing on estate assets based on blended families is the Will. Whether you write your own Will on-line, in a Will Kit, or use the more formal method of the Public/Guardian Trust or a Solicitor (bearing in mind you would best engage with a professional service such as a Solicitor or Lawyer), your intended intentions need to be considered when you are unable to speak for yourself.
As members of a blended family, the parents and guardians need to provide the basics to ensure:
Appropriate Guardians are identified to look after dependent family members (children, older parents, special needs individuals)
Estate assets are passed on appropriately
That all family members are considered when writing up a Will.
That appropriate insurance protection is considered to ensure a fair distribution of benefits across those that need it the most
That family homes are protected and secured for those members relying on having a roof over their heads.
As insurance and risk management advisors, we look at protecting the legacies that families acquire through hard work and ensure that these legacies are protected to the desire of individual clients. Taking in to consideration the family make-up and ensuring the fair treatment of all members of the family unit will go a long way to protecting the legacy that many families work hard to attain in their life-time.
Our perception of “family” may change over time and our experiences are affected by our age and culture. The story of how different generations have experienced family life, is a story of change and growing diversity in the family form and the roles within families.
What may have traditionally been a good option to insure families, protecting their financial position and estate planning needs are no longer acceptable solutions in today’s society. All aspects of the family make-up would need to be considered and changed as the family dynamic changes to ensure there is that peace of mind for all family stakeholders to protect them and continue to protect them well in to the 21st century.
Through all these changes the core functions of families remain constant. Families bear, raise and nurture children. They provide emotional and material support needed for children to become fully functioning and participating members of society, and protect vulnerable family members, including children and elders. Families pass on culture, knowledge, values, attitudes and property.
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Glen Hatcher
Financial Adviser
New Vision Financial Services
Plan your future and let us help you have peace of mind along the way.