How Life Insurance Can Help with a Blended Family
Episode 268 – The recent death of Senator Dianne Feinstein has brought attention to the dilemma faced by blended families. Life insurance can be a great tool to help smooth over some rough patches.
Transcript of Podcast Episode 268
Research indicates that one in three children in the United States lives in a blended family.[1] And yet, many people seem unprepared for the complications that arise when one of the parents dies.
Such is the case with the family of Senator Dianne Feinstein. When she died late last year, people were surprised to learn how much money she had. According to her financial disclosure forms, her net worth was nearly $70 million.[2] Feinstein’s first husband died in 1978, and some of her wealth came from her third marriage to private equity billionaire, Richard Blum.[3] At the time they were married, Feinstein already had one daughter and Blum had three.
Large estates can become contentious, and adding a blended family to the mix can sometimes make things worse. This is certainly true in Senator Feinstein’s case. In fact, problems came to the surface while she was still alive.
After Blum died in February 2022, Feinstein’s daughter Katherine, acting as power of attorney for her mother, argued that Senator Feinstein was owed millions of dollars from Blum’s estate, money needed to cover her medical bills. Part of the resulting lawsuit also involved a vacation property in Stinson Beach, CA. The Feinstein side wanted it sold while the Blum side did not. [4]
It is impossible to predict how the two sides will get along as Feinstein’s estate is probated.
Blended families offer unique estate planning challenges, and the issues need to be examined before it’s too late. For example, some attorneys recommend keeping assets and inheritances separate to the fullest extent possible.[5]
Life insurance can be an excellent tool to deal with the complications brought on by blended families. A life insurance policy can create an additional pool of wealth for one, or both sides, of a blended family. And carefully structuring a life insurance trust can be a great way to ensure that parents’ wishes are carried out.
A life insurance trust has other advantages as well. It can provide clarity as to what the parents’ intentions are for one part of the blended family or the other. It can also provide protection against creditor claims and direct how, and when, the children are able to use the money.
If you’re part of a blended family, it always pays to remember that every situation is different, and that you may need help to get through the long list of alternatives you may have. Your Security Mutual Life insurance advisor can help you sort through your options and help get the process started. Your advisor will assemble your team and coordinate with your attorney and tax professional to review your situation to determine the plan and strategies that are appropriate for you and your family.
[1] Global Presence Reach.. “The Modern Family Way: Navigating Blended Family Life.” LinkedIn. https://www.linkedin.com/pulse/modern-family-way-navigating-blended-life-global-presence-reach (accessed January 8, 2024).
[2] Picchi, Aimee. “How much was Dianne Feinstein worth when she died?” CBS News. https://www.cbsnews.com/news/dianne-feinstein-net-worth-richard-blum-children/ (accessed January 8, 2024).
[3] Stern, Anna Sulkin. “Will Dianne Feinstein’s Legal Drama Continue Following Her Death?” Wealth Management. https://www.wealthmanagement.com/estate-planning/will-dianne-feinstein-s-legal-drama-continue-following-her-death?NL=WM-27&Issue=WM-27_20231227_WM-27_417&sfvc4enews=42&cl=article_1_b&utm_rid=CPG09000063297315&utm_campaign=46422&utm_medium=email&elq2=6356f132053747469573263dd787e6b1&oly_enc_id=&sp_eh=adb338aedc42cd77b819e4cce03f7ea0909ab5686985ba7f4ae6befb5ffafb32 (accessed January 8, 2024).
[4] Rector, Kevin. “Dispute over Dianne Feinstein’s family fortune aired further as attorneys spar in court.”L.A. Times. https://www.latimes.com/california/story/2023-09-11/attorneys-spar-for-first-time-in-open-court-over-sen-feinsteins-family-fortune (accessed January 8, 2024).
[5] Stern, Anna Sulkin. “Will Dianne Feinstein’s Legal Drama Continue Following Her Death?” Wealth Management. https://www.wealthmanagement.com/estate-planning/will-dianne-feinstein-s-legal-drama-continue-following-her-death?NL=WM-27&Issue=WM-27_20231227_WM-27_417&sfvc4enews=42&cl=article_1_b&utm_rid=CPG09000063297315&utm_campaign=46422&utm_medium=email&elq2=6356f132053747469573263dd787e6b1&oly_enc_id=&sp_eh=adb338aedc42cd77b819e4cce03f7ea0909ab5686985ba7f4ae6befb5ffafb32 (accessed January 8, 2024).
This podcast is brought to you by Security Mutual Life Insurance Company of New York, The Company That Cares®. The content provided is intended for educational and informational purposes only. Information is provided in good faith. However, the company makes no representation or warranty of any kind regarding the accuracy, reliability, or completeness of the information.
The information presented is designed to provide general information regarding the subject matter covered. It is not to serve at legal, tax or other financial advice related to individual situations, because each person’s legal, tax and financial situation is different. Specific advice needs to be tailored to your situation. Therefore, please consult with your own attorney, tax professional and/or other advisors regarding your specific situation
To help reach your goals, you need a skilled professional by your side. Contact your local Security Mutual life insurance advisor today. As part of the planning process, he or she will coordinate with your other advisors as needed to help you achieve your financial goals and objectives. For more information, visit us at SMLNY.com/SMLPodcast. If you’ve enjoyed this podcast, tell your friends about it. And be sure to give us a five-star review. And check us out on LinkedIn, YouTube and Twitter. Thanks for listening, and we’ll talk to you next time.
The applicability of any strategy discussed is dependent upon the particular facts and circumstances. Results may vary, and products and services discussed may not appropriate for all situations. Each person’s needs, objectives and financial circumstances are different, and must be reviewed and analyzed independently. We encourage individuals to seek personalized advice from a qualified Security Mutual life insurance advisor regarding their personal needs, objectives, and financial circumstances. Insurance products are issued by Security Mutual Life Insurance Company of New York, Binghamton, New York. Product availability and features may vary by state.