Blending More Than Finances: Behavioral Risks and Relationship Repair in Modern Finances

By Sara V. Solano, BFA™

LodeStar Advisory Group LLC

Blended families face a complex financial and emotional landscape—one that standard financial planning alone often fails to address. As Mikel Van Cleve, PhD candidate in financial planning, explains in his work on The Psychology of Estate Planning with Blended Families, these households navigate overlapping systems of trust, loss, and obligation. Their financial decisions are deeply shaped by emotional history, competing loyalties, and sometimes, an eroded sense of “foreverness”. By bridging behavioral finance with family systems theory, we can better understand—and guide—these families toward more resilient, transparent planning.

Blended Families: The Emotional Undercurrent of Financial Decisions 

Blended families are formed in the wake of significant emotional transitions—divorce, death, or separation. These transitions don’t just reshape family structures, they also influence the emotional context in which financial decisions are made. According to Van Cleve, emotional histories in blended families often include grief, unresolved conflict, and shifting roles, all which can undermine trust and long-term planning.

Using Bowen’s Family Systems Theory, Van Cleve highlights the concept of emotional fusion—when the emotional responses of one family member directly influence another’s behavior. In highly fused systems, the anxiety of a child or step-parent can cascade, affecting the decisions of the entire household. This becomes especially relevant in financial discussions, where the perception of fairness or favoritism can trigger intense emotional responses. 

In other words, money isn’t just math in blended families—it’s meaning. It’s a stand-in for trust, love, fairness, and permanence. And when those meanings differ across relationships and generations, it can lead to conflict, avoidance, or secrecy.

Kinship, Fairness, and Financial Infidelity

At the heart of many financial struggles in blended families is the tension between biological loyalty and blended responsibility. Hamilton’s Kin Selection Theory (1964) explains that altruism is more common among biologically related individuals. Simply put, we are evolutionarily inclined to support those with whom we share genetic ties. In blended families, where step children, ex-spouses, and new partners are part of the equation, this innate bias can complicate even the most well-intentioned financial plans.

For example, a parent may prioritize saving for their biological child’s college fund while contributing less toward the blended household’s shared goals. Or a stepparent might hesitate to include stepchildren in an estate plan. These decisions may not be consciously unfair—but they often feel that way to others in the family. When emotional fairness is questioned, trust erodes. 

This erosion of trust often leads to financial infidelity—when one partner hides spending, assets, or debts, to avoid conflict or preserve control. Van Cleve’s research identifies blended families as particularly vulnerable to this behavior. Financial secrecy can emerge as a misguided coping mechanism in the face of competing priorities, unspoken resentment, or a desire to protect children from previous relationships. 

The consequences, however, are rarely contained. Financial infidelity can damage both the relationship and the family’s long-term financial health, leading to poor communication, duplicated efforts, or even legal battles down the road.

How Financial Therapy Can Help

Blended families often face a unique emotional and logistical challenge: how do you merge not only finances, but values, priorities, and histories? This is where financial therapy becomes an essential tool. 

Financial therapy helps families identify emotional triggers, establish clear boundaries, and engage in difficult but necessary conversations. It’s not just about creating a budget or assigning beneficiaries—it’s about acknowledging the emotional weight those decisions carry.

Effective financial therapy for blended families often focuses on: 

• Reflective listening – ensuring each family member feels heard and validated

• Role-switching exercises – to foster empathy between spouses, children, and stepparents

• Collaborative financial planning – to promote transparency and shared goals

It also addresses what Van Cleve refers to as the “three-bucket subsystem” —balancing prior obligations (like child support or alimony), current financial needs, and future goals. This framework helps families talk through competing responsibilities without resentment or ambiguity.

Most importantly, therapy encourages families to define what fairness looks like for them. Inheritance, legacy planning, and day-to-day money management often carry deeper emotional meaning. Fair doesn’t always mean equal, but it should always be discussed openly.

Bridging Financial Psychology and Planning

Blended families don’t just require a financial plan—they need a psychologically-informed one. Traditional financial advice may not account for the emotional dynamics, loyalty, binds, or unspoken fears that often influence behavior in these households.

Financial psychology offers tools to help navigate this complexity by blending behavioral science with financial planning. Mikel Van Cleve’s research shows that decisions around inheritance, wealth transfer, and money management in blended families are often shaped by deep emotional currents—grief, guilt, loyalty, and fear of conflict.

Planners working with blended families must:

• Recognize emotional fusion: Understand that heightened emotional reactivity between family members can derail logical financial conversations.

• Account for kin selection bias: Acknowledge that individuals may favor their biological children over stepchildren, even when intentions are good.

• Navigate legacy planning with care: Discuss who “should” receive what, when, and how, while honoring different definitions of family and fairness.

By integrating psychology and planning, advisors can help families  move beyond surface-level strategies to address the real issues underneath: trust, security, and long-term harmony. Bridging theory and practice allows families to make informed decisions not just with their wallets, but with their hearts and minds.

Conclusion: Planning for the Heart of the Family

Blended families are beautifully complex. They are born of new beginnings, but often carry the weight of past losses and layered relationships. Financial planning in these families isn’t just about numbers—it’s about navigating the emotional terrain with care, clarity, and compassion.

By combining traditional planning tools with insights from family systems theory, kin selection theory, and financial psychology, we can create strategies that not only preserve wealth, but strengthen relationships. Financial therapy, reflective exercises, and open communication are essential in helping these families move from confusion to confidence.

At LodeStar Advisory Group, we understand that every family has a unique story—and a unique set of challenges. Whether you’re navigating a second marriage, planning your estate, or working through issues of fairness and trust, we’re here to guide you toward a future that honors both your finances and your family. 

Sources

• Bowen, M. (1978). Family Therapy in Clinical Practice. Jason Aronson.

• Hamilton, W.D. (1964). The Genetical Evolution of Social Behaviour. Journal of Theoretical Biology, 7(1), 1-52.

• Van Cleve, M. (2025). Using Theory and Therapy to Improve Financial Well-Being in Blended Families [Webinar]. Hosted by the Financial Therapy Association.

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Sara V. Solano, BFA™ is a Wealth Advisor who specializes in providing behavioral financial advice.

Disclosure: LodeStar Advisory Group LLC is an independent Registered Investment Adviser (RIA) headquartered in Naples, Florida. The above commentary does not constitute individual investment advice. The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. This material represents an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the funds or any security in particular.