Prenuptial agreements are a tough topic but can lead to open discussions about money ay high net worth investors
Wealthy investors are big proponents of signing a prenuptial agreement and see several practical advantages to doing so, according to a new survey conducted by Millionaire Corner.
Finances are already a daunting topic for many couples. Money problems are the biggest source of friction, stress and arguments for couples, according to a 2012 survey conducted for the American Institute of CPAs. The survey found the disagreements over money were the source of more conflicts than children, household chores, work, or friends.
But a “prenup,” contracts completed prior to a marriage or civil union that commonly specifies how property and assets will be divided in the event of divorce, can be an especially thorny topic for a couple about to pledge ‘til death do us part.
“Seinfeld” fans no doubt recall the episode, “The Invitations,” in which George, who had developed cold feet, plots the perfect exit from his impending marriage: He will ask his fiancé for a prenuptial agreement in the hopes that she, offended and outraged, will call off their engagement. This being “Seinfeld,” the best laid plans go bust. Pointing out that she makes more money than George, she laughs off the suggestion, “Sure, gimme the papers, I’ll sign ‘em.”
More than two-thirds of Ultra High Net Worth investors who have a net worth of at least $5 million would recommend a prenuptial agreement to a couple getting married. In comparison, 57 percent of Affluent investors overall said they would recommend such an agreement.
Seventy-one percent of the wealthiest investors said that the biggest advantage of a prenuptial agreement is that it protects assets accumulated prior to a marriage, which, of course, is what the agreement was designed to do. But almost two-thirds (61 percent) believe a prenuptial agreement will foster frank and open discussions about money.
Related story: How couples can avoid money battles (or at least minimize the damage). Click here to read more.
Almost half (47 percent) of Ultra High Net Worth respondents said that they consider an advantage of a prenuptial agreement to be that it can help protect children from a previous marriage, meaning that in the cases of a blended family, a prenuptial agreement could prevent a spouse from taking assets or property for themelves or their own children instead of yours.
Almost the same percentage said it can make divorce proceedings go more smoothly (best they keep that one to themselves).
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.