Millionaires and Marriage – Guest Post

We all try to emulate millionaires – we track their investments, listen to their financial advice and read their books. So why do we know so little about how they feel about the biggest investment they make in their lives? Choosing a spouse. In fact, a business person’s biggest deal is choosing who to marry. After all, that deal alone can cost them half of their net worth!

I decided to do a little research into what millionaires think about marriage, and find out how many were divorced vs. married. The findings are quite fascinating.

Are most millionaires divorced or single?

Sheryl Sandberg, who is has surpassed the millionaire status, has said “[t]he most important career choice you’ll make is who you marry.” [1]

With the divorce rate in the US close to 50%, and all the news around famous people divorcing each other, you probably assume that the rich get divorced even more frequently than everyone else. The findings are actually counterintuitive to what you would think. There seems to be a direct correlation between being married and acquiring wealth. [2]. According to recent surveys “91% of millionaires were married to the same spouse for 36 years.”[3] What was also surprising about the survey was that two thirds of the millionaires surveyed had never been divorced.[4]

While shocking, this statistic actually makes sense for various reasons:

1) Love and support. By having someone by your side while you focus on your career and build your wealth, helps a lot. You have the constant support and love from someone, even on the hardest days. You have someone to motivate you and help propose solutions to the problems you find difficult to circumvent. This is why ”95% of millionaire husbands believe their wives played an important role in their economic success.”[5]

2) Dual Income. Dual income is always better than a one income household. When both parties make good salaries, combined, they are able to make more investments than someone that is single. According to a well cited study on the economics of divorce, “married respondents experience per person net worth increases of 77% over single respondents.” [6]

3) Shared household duties. When you are married, you can each take on certain responsibilities, instead of one person being responsible for everything.

4) Economies of scale. Married couples share the expenses of essentials (insurance, car, household items), which proves to be cost effective.

What are the average divorce costs for millionaires?

Kevin O’Leary, the infamous Mr. Wonderful from the popular Shark Tank, is quoted saying “Demand a prenuptial agreement…[i]t forces you [and your betrothed] to tell the truth about your financial past…It’ll save you hundreds of thousands of depression and grief and it may save your marriage to find out.” [2]

An average divorce costs around $15,500 in legal fees and takes around 10 months. [7] However, legal fees are only a small portion of all the fees divorced couples incur. There are therapy sessions for the couple and their kids. There are also costs associated with selling the house and finding new places to live. There are additional legal fees with respect to changing your will and other estate planning documents and strategies. [8]

For millionaires, these fees are probably much, much more. The divorce of Michael Jordan, and that of Steven Spielberg are well known, and cost around $100 million. [9] In the same study performed on the economics of divorce, “…divorced respondents experience[d] an average wealth drop of 77%.”[6]

Do millionaires obtain preps?

Prenuptial agreements are signed by future spouses prior to marriage. Prenups are documents that govern how assets are distributed should divorce or separation happen. More and more couples are opting to get a prenup so that their future distribution of assets is more clear. Currently, only 3% of all married couples have a prenuptial agreement. [10] Unfortunately, there are no exact statistics on how many of those 3% are millionaires.

In the news, we only hear about the celebrities that don’t choose to sign a prenup. For example,Reese Witherspoon is known to avoid prenups. She apparently had no prenup with her first husband Ryan Phillippe, since at the time, they were both rising stars. Now that she is worth a whopping $80 million, you would think that she would get a prenup for her second marriage to a talent agent. Nope, no prenup this time around either.

Just like anything, there are pros and cons to getting a prenuptial agreement. Those that have significant wealth usually at least consider getting a prenup in order to protect their assets. However, some couples decide to forgo getting a prenuptial agreement entirely.

If you have any comments about millionaires and the choices they make in their personal lives, with respect to choosing a spouse, comment down below.

[1]http://www.businessinsider.com/sheryl-sandberg-career-advice-to-women-2011-12
[2]http://www.thompsonlaw.ca/assets/millionaire-couples–the-unmistakable-link-between-marriage-and-wealth-creation.pdf
[3]http://www.thomasjstanley.com/2012/05/dont-criticize-the-1-emulate-them/
[4]https://www.ft.com/content/13cf5fc2-e9cb-11e4-ae1c-00144feab7de
[5]http://www.thompsonlaw.ca/assets/millionaire-couples–the-unmistakable-link-between-marriage-and-wealth-creation.pdf
[6] https://fee.org/articles/the-economics-of-marriage-and-divorce/
[7] http://www.nolo.com/legal-encyclopedia/ctp/cost-of-divorce.html
[8]https://www.wevorce.com/blog/divorce-100000/
[9] http://time.com/money/4533415/most-expensive-divorces-celebrities-steve-wynn-donald-trump-rupert-murdorch/
[10] http://usatoday30.usatoday.com/money/perfi/basics/2010-03-08-prenups08_CV_N.htm

Eva Hibnick www.prenups.co is a graduate of Harvard Law School. She is a serial entrepreneur who started a digital agency and because of her own experience researching prenuptial agreements, now runs Endure, a service that provides affordable online prenuptial agreements. Prior to joining the tech world, she was an attorney in New York City.

Disclaimer: The information in this blog post is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from Endure Documents Inc. or the individual author, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.

One comment

  1. I love prenups and couldn’t agree with Mr. Wonderful more! A prenup forces you to have a conversation with your significant other that you should be having anyway, and it forces both parties to open up about financial goals, priorities, and general feelings about life, money, and time in an extremely intimate (if oddly academic/legal) way. I can’t imagine that being a bad thing for the success of a marriage! And as far as cost: I’ve drafted several prenups and represented even more parties in divorces. Based on personal experience, the statistical likelihood of divorce, and the costs associated with each, it’s not hard to say that the expected cost of a prenup is greatly outweighed by the expected cost of a divorce, in nearly every scenario!

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