For high-net-worth and ultra-high-net-worth households in particular, differences in spending habits, inherited wealth, investment philosophy and family expectations can quickly become sources of conflict if left unaddressed. Advisors who engage early can help clients avoid disputes that might otherwise surface only after finances are legally intertwined.
In an interview with InvestmentNews, Gina Nelson, senior vice president and head of fiduciary services at Chilton Trust, said many post-marriage financial problems are predictable — and preventable.
“It is not at all uncommon for a couple to be comprised of a spender and a saver,” Nelson said. “Before a marriage, each individual typically has his or her own money and an idea of what they consider a comfortable amount of savings.”
Without clear conversations beforehand, those differences can become flashpoints.
“After marriage, when there hasn’t been clear communication between the parties as to how to manage those different approaches and expectations, roles and responsibilities, etc., financial issues can easily arise,” she said.
Advisors can reduce that risk by encouraging transparency about finances before the wedding.
“These misalignments are often avoided by being very clear about each party’s income and expenses and how joint household expenses will be paid,” Nelson said. “Will the couple pool all of their finances in a joint account to cover all expenses, both joint and individual? Will each keep their own income separate but contribute to a joint account for the household, and if so, in what proportions?”
Debt disclosure can be equally critical.
“Does one of the parties have substantial debt, or credit issues that will impact the couple’s ability to obtain a mortgage or other financing if needed?” she said. “The more both parties work before the marriage to recognize and agree as to how their finances will work post-marriage, the less opportunity there is for friction down the line.”
Pre-marital planning becomes significantly more nuanced when one partner brings inherited or generational wealth into a relationship.
“This situation can be very tricky, and while there is never a one-size-fits-all answer in planning, this situation doesn’t even have a one-size-fits-most solution,” Nelson said.
Advisors must weigh a wide range of variables, she added.
“The approach will vary significantly depending on the extent of the imbalance, the length and stability of the marriage, whether the inheritance stays in trust or distributes outright, family dynamics and financial sophistication, just to name a few.”
Prenuptial agreements frequently trigger disclosure conversations around trusts and legacy assets.
“In situations where there is a prenuptial agreement in place, many of these discussions are likely to arise around the disclosure of any trusts and inherited assets,” Nelson said. “In other situations, disclosure to the non-wealthy spouse may not make sense at all.”
Rather than applying standardized solutions, advisors should focus on client-specific outcomes.
“As advisors, our job is to help clients think through these scenarios and help come up with a plan that works best given that particular client’s circumstances,” she said.
Differing risk tolerances or investment philosophies can also strain relationships, particularly when couples merge finances too quickly.
“This is where having separate individual accounts in addition to a shared, joint account can work well,” Nelson said.
That structure allows couples to balance independence with shared responsibility.
“Each spouse can contribute a certain percentage or dollar amount of their income to a joint account to cover household expenses, then the remaining assets can be invested, held or spent separately as that spouse sees fit,” she said.
Clear expectations remain the strongest safeguard.
“Setting these expectations and being clear about how finances will work before getting married helps ensure both spouses are on the same page before issues arise,” Nelson added.
Family governance norms and parental expectations often complicate planning discussions for wealthy clients.
“Family pressures and expectations can certainly make pre-marital planning more difficult and awkward,” Nelson said.
In those situations, advisors must remain focused on the individual client’s interests.
“As advisors, our role is to help the client make the best possible decisions for her/himself, whether those align with the wishes of the family or not.”
That role frequently involves coaching clients through emotionally charged conversations.
“This may involve helping a client work through having difficult conversations with their spouse-to-be or with their family members or friends,” she said. “Oftentimes, listening, empathizing and offering to be a sounding board can be a big relief to clients navigating challenging dynamics.”
Balancing integrated finances with individual autonomy can be especially sensitive when businesses or concentrated assets are involved.
“For a lot of people this is an area that can be difficult to talk about,” Nelson said. “But often the most important thing is for partners to be transparent with each other.”
Advisors can ease those conversations by creating a neutral space.
“Giving them a space where they feel free to discuss their concerns can help ease anxiety over having these types of discussions,” she said.
Prenuptial and postnuptial planning also raises ethical considerations for advisors themselves.
“One thing advisors need to be very clear about, especially in cases like this, is who their client actually is,” Nelson said.
Treating couples collectively can create conflicts when negotiations begin.
“As advisors we often think of a couple or a family as a client, but when it comes to prenuptial or postnuptial planning, each party having independent advice is critical,” she said. “Trying to advise both sides can put an advisor in an uncomfortable and sometimes untenable position.”
For advisors seeking deeper relationships, expanding beyond investment management is increasingly essential.
“For advisors to be that ‘first call’ for clients, no matter the subject area, they need to show an ability to understand and help clients with a broad range of issues beyond just investing,” Nelson said.
Understanding estate planning tools and marital planning strategies can significantly elevate an advisor’s role.
“Having a working knowledge of estate planning and pre-marital planning vehicles and techniques is crucial in this space,” she said. “While the advisors won’t be the ones ultimately drafting a pre-nuptial agreement or asset protection trust, their ability to have discussions with clients about the potential benefits and drawbacks, informed by an understanding of the client’s overall financial picture, makes them infinitely more valuable.”
Helping coordinate legal professionals ultimately strengthens client confidence, she added.
“Being able to guide clients through the decision-making process and help them coordinate with attorneys who will ultimately be responsible for the legal decisions and documents builds trust and confidence in an advisor’s ability to help in a variety of scenarios.”
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