Marriage And Wealth: How a Financial Life Planner Can Help

Let’s be realistic: Not everyone marries for love. But whether they do or not, the topic of money and finances comes up in just about every marriage. It’s an important aspect in marital relationships and a common cause of stress and conflict. While love alone is often not enough to make up for the challenges created by money; trust, transparency, and a little guidance can go a long way in empowering couples to navigate the potential pitfalls caused by money.

How Money Gets In The Way

Stress over money in a marriage comes down to a series of common conflicts:

  • Differences between the two parties in financial assets entering the marriage.
  • Differences in the perceived role each spouse should have on finances
  • Differences over how to spend money, or what to prioritize
  • Uncertainty/fear over estate planning
  • Complications due to family members
  • Avoidance or awkwardness around having financial conversations.

I have worked with many couples in these situations. In this article, I’ll focus on situations where one person enters the marriage with much greater financial resources. They might have acquired family wealth, or were fortunate enough to have career success prior to marriage. Meanwhile, the other spouse might have come from a more modest financial background and  risks financial hardship if the marriage fails.

I don’t have any easy solutions, as every situation is different. But here are some examples of what I’ve experienced with my clients, along with my thoughts on each situation. Perhaps some of these scenarios might sound familiar to you?

When One Spouse Marries Into Wealth

While some spouses might enter the marriage with significantly less financial resources, I’ve found that for my clients, they all generally want to contribute their fair share financially to the marriage. They want to do their part towards the couple’s future financial success and don’t want to be a “trophy” or “gold digger”. They want to be empowered to do things, rather than just spend their husband’s (or wife’s) money.

Ideally, this dynamic is sorted out before marriage. It’s of course totally feasible that the spouse with wealth is perfectly happy to provide for a spouse who doesn’t work. But if both spouses don’t have a tacit understanding and agreement of their financial role in the marriage, then there’s definite potential for conflict down the line. While a financial life planner is not a marriage counselor, we can at least highlight the issue as one that needs to be addressed and present an objective assessment of the couple’s financial health along with possible solutions.

Fearing The Worst Case Scenarios

A common worry from the spouse marrying into wealth is what happens if the worst happens, whether it be divorce or the passing of their partner? Will they be taken care of?

With divorce, the typical method of protection is a prenuptial agreement. The agreement can have many forms, depending on what the couple works out. One typical arrangement can be  where the spouse with less wealth will be entitled to a greater portion of the couple’s wealth the longer the marriage lasts.

While a prenuptial agreement can feel transactional, if done in the right way it can also be communicated as an expression of love between the two sides. The process can actually be a way for the couple to strengthen their rapport. After all, if they can be fully open and transparent with each other to work out in advance what happens if the marriage goes sour, it shows they can resolve even the most difficult and awkward topics as a couple. With financial terms agreed on in advance, the couple can dive into their relationship with one less worry. A financial life planner can get such a conversation started with the right tone and minimal awkwardness.

Marriage and Estate Planning

In the event of an unexpected tragedy, the person with money will frequently already have some form of protection—typically a trust or will— that will transfer wealth to other family members if anything should happen to them. If the source of their money is a trust fund from the parents, the trust typically reverts to the parents or other siblings if the wealthier person passes away.

If they now change the arrangement to include the new spouse, they risk conflict with their children or parents. This might be a battle the spouse with money is reluctant to fight. They may feel conflicted between their family and their new spouse, or they might feel that the time is not yet right to talk to their family about adding the spouse to the trust/estate. The effect is that the new spouse might not get anything.

One alternative to amending the will/trust would be to purchase a life insurance policy. This would not impact the family trust, but would provide financial security to the new spouse. A financial life planner can help you select the right type of policy, or perhaps come up with other arrangements which won’t directly impact the family trust. Regardless of the course of action, it’s something that should definitely be worked out in advance, so that both spouses have peace of mind.

Taking Care of Family

Another situation I see is one spouse coming from a prior marriage. As a result, part of their financial resources are used to support the family members from that marriage. The wealthier person might also already have a trust or will that will pass their wealth to the children.

Alternatively, the spouse coming from less money feels obligated to provide financial support for their own family, who might still be struggling financially. One complication of this scenario could also include the family members pressuring the spouse to continue in the marriage even if it’s not working out, solely in order to continue receiving financial support.

In either scenario, the financial load caused by family obligations can be a strain on the couple’s financial resources. The spouse with more wealth might resent that they are being forced to support the in-laws, while the spouse with less money might feel trapped.

One possible idea in situations like this might be for the spouse with more money to invest in the other spouse to help boost their long term earning potential. They can then use this new earning power to help their extended family.

The Keys: Trust, Transparency, and Communication

The key to any successful relationship is continuous transparency and communication from both partners in all aspects, and finances are no exception. It is the ultimate expression of love and commitment to be willing to be open and transparent with your spouse and partner.

At the end of the day, even if one spouse needs to make the difficult decision to choose their family over their spouse, with open and transparent communication it will be much easier to come up with an alternative solution. A financial life planner can help facilitate the conversation and come up with tactics that will be a good fit for the couple’s values and priorities.