Are You Sure You Want Your Child to Get a Pre-nup?


Let me start off by saying this is not an anti-pre-nup post. There are places for the agreements, and I have advised many clients regarding establishing them over the years. But there are implications to pre-nuptial agreements that must be factored in — particularly in first marriage situations. That’s what this post is about.

We all know what a pre-nuptial agreement is — an agreement to establish the rules, particularly regarding property, during a marriage or at its termination by death or divorce. But we can frame their description differently, too, to capture how younger, maturing beneficiaries might interpret them:

  1. You’re telling what you’re willing to share and what you’re not — and I thought we were going to share everything.
  2. Your family is telling me I can only be so much a part of them.
  3. You don’t trust me and need me to sign something so that we can be together.
  4. You don’t think this marriage will last.

Whether or not that’s the intent or perspective (or at least the stated intent or perspective), one participant in the agreement may very well view the process as described above.  For this reason, and again particularly with first marriages between young adults, action on pre-nuptial agreements is often deferred until late in the engagement, emotions run higher, feelings get hurt, and the whole process can just be a mess.  So what can you do?

  1. If your child is mature enough to make their own decisions regarding their own finances, let him or her decide whether to pursue a pre-nuptial agreement.
  2. If your child is not mature enough to make their own decisions, they probably aren’t mature enough to manage their finances.  If their financial resources are a result of gifts or inheritances, that probably means that they received too much, too soon.  The eve of a child’s wedding is not the time to solve those problems — they should be dealt with much earlier than that.
  3. If the bulk of the concern is future gifts and inheritance, utilize appropriate trust planning.  In this way, the child can still get the benefit of the inheritance, but you have taken care of protecting it from a divorce or loss of wealth within the family as a result of death.
  4. Make sure you evaluate the potential harm to the marriage of pursuing a pre-nup against the potential financial harm that could occur upon divorce.
  5. Encourage your child and their intended to do appropriate estate, insurance and financial planning so that they take care of each other in the event of an untimely death of one of the spouses.

There is no one-size-fits-all approach to this subject, but have I been helpful?  Do you have a different take?



About Author

Mark initiated this blog due to his passion in assisting and equipping families to manage their wealth and their families well.

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