Inherited wealth and Prenups — For Love and/or Money

This blogpost is an excerpt from For Love and/Or Money: The Impact of Inherited Wealth on Relationships by Barbara Blouin, The Inheritance Project

Heirs may have valid reasons for fearing what can go wrong if they marry someone with much less money. They may have witnessed in their own parents’ lives the battles for control that financial inequality often trigger. Or they may already have been burned. To protect themselves, some heirs choose to postpone marriage — sometimes indefinitely. Others require their fiancé(e)s to sign prenuptial agreements. Martin Newman asked his future wife to sign a “prenup”, as it is often called, out of fear that he might repeat his mother’s experience. “Watching what happened to my mother has made me cautious,” he says. “Both men in her life were there for the money. My father wanted to be accepted into the social arms of St. Louis with an attractive woman at his side and a few million dollars in the bank. My stepfather went through his own fortune, and then he married Mother.” Not surprisingly, both marriages failed miserably. “I was so cautious that I didn’t even get married until I was forty. One reason I married Eileen is that she has simple tastes. You could take her whole wardrobe and put it in a weekend bag. When I first mentioned a prenuptial agreement to her, she looked at me and said, ‘I don’t want your money. I know that I can support myself, and I love you for who you are, not for what you have.’’’

Even so, Martin’s fears did not entirely subside, so Eileen agreed to sign both a prenuptial agreement and a separation agreement. The prenup protects Martin’s assets in case of divorce, and the separation agreement protects Eileen. Including these agreements in their premarital planning is Martin’s way of equalizing financial protection, although he acknowledges that it’s hard for him to relinquish total control of the money intended to benefit his wife. “In the separation agreement,” he says, “I’ve given her a lump sum. I have also started giving her ten thousand dollars a year, but I’ve asked her not to touch it for the first five years — which she is doing. It’s somewhat a control issue on my part, but I told her, ‘If we ever separate, this money is yours.’”  (Names are pseudonyms.)