6 things wealthy people do to protect their money when they get married
Sarah Wells Jun. 21, 2019, 9:09 AM
Theranos founder Elizabeth Holmes married hotel heir Billy Evans,
according to recent reports. Kimberly White/Getty Images for
Their wedding fueled speculation about what will happen to the couple's finances.
We asked experts how wealthy people can protect their finances after
they get married.
Visit Business Insider's homepage for more stories.
Elizabeth Holmes, the disgraced founder of the biotech startup Theranos, married her fiancé Billy Evans in secret, according to a report earlier
Holmes was once worth billions of dollars before reports revealed she
had defrauded investors and based her company's blood-testing technology
on faulty science. She now faces federal trial for several counts of
Following the news of her marriage, speculation has emerged over Holmes' motives, from contriving a pregnancy to garner sympathy in court to
possibly using her husband's hotel fortune to pay off legal debts.
Of course, Holmes and Evans are far from the first couple whose
financial arrangements are called into question following their marriage.
We asked experts the different ways wealthy people can protect their
finances and assets after they get married.
Here's what they had to say.
Separate your forms of income
Separate your forms of income
Flickr / David Goehring
For high-net-worth couples, an important first step to take when
protecting individual assets in a marriage is to separate the different
streams of cash flow they might have, New York divorce lawyer Jacqueline
"It's a question of defining what income is," Newman told Business
Insider. "Especially when you have someone who owns their own business,
that really can get very, very tricky. A lot of times when you have
family money … you may be in a situation where you really want to
protect the money that comes in from the family. Trust income, any kind
of inheritance, gifts … you just want to make sure that money that is
from someone's family is able to come out."
For Evans, as an heir to the California chain Evans Hotels, separating
his inheritance from any other forms of income could be a good way to
insure that his family's money isn't on the line when legal dues come
Start estate planning
pitbull2013 via Compfight cc
Another crucial step to take when coming into a high-net-worth marriage
is to start estate planning, president and CEO of Francis Financial,
Stacy Francis, told Business Insider in an email.
"High-net-worth couples should meet with a financial planner and make an
estate plan immediately to organize their assets and designate where
they should go in the case of death" Francis told Business Insider.
Bringing in an estate manager can also be an effective way to wash your
hands of financial dealings and protect separate money in the case of a divorce, says Newman. If money is separated and never used during the
marriage by the moneyed partner, it won't be considered joint income.
Sign a prenup
An obvious choice when entering a marriage — whether it be financially high-risk or not — is to sign a prenuptial agreement, or prenup. This is
a legal agreement where both partners agree ahead of time to what
division of assets they would accept in the case of a divorce.
While prenups are typically drawn up to protect the moneyed spouse,
there are instances where the other spouse benefits as well.
"When drafting a prenup, each party should hire independent attorneys to
draft and review the document before it is signed to make each party's
best interests are represented," Francis told Business Insider. "Though
prenups are typically designed to protect the moneyed spouse,
stay-at-home parents can also greatly benefit from prenuptial agreements."
Prepare for spousal support in the case of divorce
Another topic to consider when entering into a high-net-worth marriage,
Francis and Newman told Business Insider, is the potential for spousal
support in the case of an eventual divorce. Unless otherwise specified
within a prenuptial agreement, the moneyed spouse may be required to
make payments to their ex-spouse after divorce.
"If one partner is sacrificing their career, peak earning years, and all associated benefits such as healthcare and retirement plans to raise
children and run the household, they need to ensure that they will
receive spousal support for an extended period of time in the case of a divorce," Francis told Business Insider.
In the case of a severe wealth disparity between the two partners, the
moneyed partner may also be required to provide spousal support to
maintain a certain standard of living for their ex — for example, if the
ex had relied solely on the other's income and would have no means to
provide for themselves directly after divorce.
"Without a prenuptial agreement, (a partner) may live a certain
lifestyle, and there may be spousal support that the non-moneyed spouse
may receive," Newman said. "But that person probably wouldn't receive
much in the way of assets because the assets would in fact all be
Decide the fate of your debt
Flickr / deveion acker
Another thing for engaged couples to consider is how debt will be dealt
with during, and potentially at the end of, a marriage.
"If debt was acquired during the marriage in a joint account, you must acknowledge who pays for the debt within the divorce settlement,"
Francis said. "However, the lender goes by the contract, and if the
assigned spouse does not pay and your name is still on the loan, your
credit could be impacted."
Ideally, Francis said, the couple would close all joint accounts and
refinance remaining loans separately.
And control the narrative in the public eye
In the case of high-net-worth marriages — especially when either person
is in the public eye — outside factors can have an impact on the
financial dealings of the marriage. In the case of a divorce, moneyed
partners can face pressure from scandal that affects support for their
public persona or company.
"Controlling the story is going to be a very important thing," Newman
told Business Insider. "Otherwise you could be in a situation that
affects the stock prices."
"And unfortunately there's an element of leverage that exists for, let's
say, the non-celebrity spouse that says, 'Listen, if you don't do this,
I'm going to leak XYZ.'"
An example Newman gives of a high-net-worth marriage ending "well" is
the recent divorce between Amazon CEO Jeff Bezos and MacKenzie Bezos.
"(Amazon) didn't take a big hit," Newman said. "There was a lot of
things at risk there and they really, I think, orchestrated the
announcement to press and their whole divorce in a very positive way."