Most high net worth investors would recommend a pre nup to a couple getting married today, but they also see one key drawback to the contracts. Learn more.
More than two-thirds of high net worth individuals would recommend a prenuptial agreement for a couple getting married today, but the savvy investors identify one key disadvantage to the contracts: They’re not very romantic.
High net worth investors acknowledge significant advantages to a pre nup, primarily protecting assets accumulated prior to a marriage and fostering a frank and open discussing about money prior to a marriage, according to an April survey from Spectrem’s Millionaire Corner. At the same time, more than half (54 percent) see a downside to the agreements, which they believe introduce a “negative feeling toward marriage.” Close to one-third (32 percent) of high net worth investors – who have investable assets of $5 million up to $25 million - indicate the pre nup wrongly places an emphasis on money, not love.
Learn more about high net worth investors’ perceptions of the advantages of pre nups by clicking here.
People typically enter into a prenuptial agreement when they own real estate, significant financial assets, have children from a prior marriage or face significant family demands, such as supporting children through college, according to the website LegalMatch. A pre nup can help individuals protect their property, avoid future litigation and determine liability for debts.
Experts say a pre nup can also create trust issues. “Many feel that even bringing up the idea of a prenuptial agreement indicates a lack of trust,” according to LegalMatch. “While prenuptial agreements cannot encourage divorce, some feel that the use of a prenuptial agreement leaves the couple open to the possibility of separation or divorce.”
A prenuptial agreement poses additional disadvantages, according to the experts. For one, laws in many states address the issues typically covered in a pre nup and may make the agreements unnecessary. What’s more, most states prohibit issues such as child support to be determined by a prenuptial contract, LegalMatch reports.
A prenuptial agreement may also need to be updated as a couple’s circumstances change, and the contracts are subject to judicial review, according to www.prenuptialagreements.org. “If you take the agreement to court, it’s up to a judge to decide the validity and reasonableness of every clause,” according to the website. “If he thinks part of all of the agreement is ridiculous, he can throw it out.”
Though a large majority of high net worth investors would recommend a pre nup for someone else, few have entered into such a contract with their own spouses, according to research conducted last May by Spectrem’s Millionaire Corner. Click here to learn more.