Broaching the Subject Of A Pre-Nuptial Agreement

When working with families that have substantial estates, a very common conversation, about keeping affluence within the family, often occurs. That is to say, parent’s who are planning to leave their estates to their children want to ensure that the family’s wealth is not going to be diluted if there is a divorce and children whose parents are getting remarried, want to be sure it is for the right reasons and that their family’s estate is not at stake. And, given the high divorce rates, it is understandable that this is a concern.

As a result, it is often recommended, when a child or parent is getting married, that they have a pre-nuptial arrangement with their new partners. A pre-nuptial agreement is a marital contract that is drawn up prior to marriage and deals with such issues as property division. Pre-nuptial agreements have been around for a very long time because they are a useful tool. That being said, prenuptials tend to have a bad reputation and it is a complicated topic for families to broach.

As a parent, looking to forward your wealth, it can be difficult to speak to your child and their partner about a pre-nuptial. One of the most common arguments, against a marital contract, amongst a party who does not want to sign the pre-nuptial is, essentially, “This is not my agreement, this is an agreement for your parents”.

This is reasonable cause for concern given it is usually the parent who approaches the topic of premarital agreements with their children. The parent group wants the pre-nuptial because they are the party with the money. They are the ones forwarding their wealth to their loved ones. They are the ones who worked very hard and diligently to create their estate and they want to protect you and their bloodline.

The problem is, people don’t often realize that the parent group isn’t doing it for themselves, or because they don’t trust their child’s partner. They are doing it for their future generations because they want to ensure their family is looked after. They want to ensure their hard work is not in jeopardy and that their wealth is protected against risk, one of which is unfortunately the reality of the rising divorce rates.

And, this has been the case for years. Looking at England’s monarch, it is no secret that the castles and fortunes remain in the royal family but, if you are married to a royal, you get to use them.

That being said, there is a solution that will ease all parties involved and that is a prenuptial that only manages the inheritance. That way the assets that the couple grow themselves, as if they were any other matrimonial couple without a large inheritance, do not have to be included. This tends to eliminate some of the discourse associated with pre-nuptials because a lot of people don’t realize that marital contracts aren’t an all or nothing proposition.

A marital contract could be limited to a single asset or a single type of asset, such as the inheritance. In creating an inheritance prenuptial, you can ensure your furture generations are looked after while also maintaining family harmony. And, by better understanding how an inheritance-specific prenuptials work, it can be easier to bring up the conversation with loved ones. 

Still not ready to discuss prenuptial agreements with your children and their soon-to-be spouses? Meet with the Trust and Estate Planning Specialists at MacMillan Estate Planning and find out more information on broaching the subject.