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6 Things Wealthy People Do To Protect Their Money When They Get Married

Jul 08, 2019

How to protect your money before marriage...

First, you want to protect individual assets and income, especially if there are multiple streams of income.  This may include income as a result of a family trust, gifts and/or inheritances or separate incomes from different business ventures.  This principle also applies to your non-high net worth individuals that may have multiple sources of income, whether it be from more than one business or a passive stream of income or individual separate property.

Meeting with a Financial Planner is also highly recommended so that you have an understanding of what you want to accomplish with respect to your Estate Planning.  It will also give a perspective with respect to tax consequences based upon your decisions.  After you have sorted out most of these issues, the most important next step is to consider doing a Prenuptial Agreement or a "Prenup".  This legal contract between the parties before they marry sets forth how they intend to hold and divide property that becomes marital and what properties they intend to keep separate and for which their soon to be spouse will have no future claim.  Because this is a contract between two parties, each party should be represented by independent counsel, so that each party's best interests are represented.  In addition to securing and identifying income and assets and how they will be effective by a possible future divorce, it is also important to consider if one of the parties is giving up a career in order to raise a family.  If that is the case, then the Agreement should also take into consideration whether that person is entitled to and should have financial support in the form of maintenance, which is equivalent to spousal support - and for what period of time that support should exist in the event of a divorce.

Another point most couples do not consider in planning for the future and protecting against a possible divorce is what happens to the debt that is acquired during the course of the marriage, or if a party is coming into a marriage with substantial debt...that is something that also should be addressed in a Prenup.

As for celebrities or persons of notoriety who live in the public eye, there are other considerations to ensure with respect to that person's public reputation and the effects that a scandal of a divorce could have.

Selected excerpt(s), photo and linked article courtesy of Sarah Wells, Business Insider, and pitbull2013 via Compfight cc.