“By failing to prepare, you are preparing to fail.” ―Benjamin Franklin

Being a part of an enterprising family is a privilege and a responsibility. Parents in an enterprising family bear much of the responsibility for preparing and educating the next generation of family stewards. What is self-explanatory or expected as a parent is not always obvious to adult children in the same extended family. Ideally, parents should consider communicating clearly and proactively about potentially emotionally charged issues before they arise. What does this have to do with prenuptial agreements? Everything.

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Purpose of a prenuptial agreement

A prenuptial agreement is one of the ways families maintain their family wealth, legacy, and family business throughout the generations. Although prenuptials are commonplace with families as preventive measures, they may carry a stigma of distrust. Often, when a prenuptial agreement practice seems arbitrary, personal, or punitive, a next-generation family member may resist. Engage your children early on to help them understand the family’s intent and the potential benefits of prenuptial agreements.

Explaining the potential benefits of prenuptial agreements

Consider the following as you talk with your children:

• Explain the family’s history and intention with prenuptial agreements and how they can benefit both your child and the future spouse.
• Bring up prenuptial discussions early, when children begin dating, instead of when they are already serious or engaged.
• Make sure it is clear all children have a prenuptial agreement and it is not about one child in particular.
• Explain the use of the family’s prenuptial agreement globally, not limiting it to the business alone.
• Employ a Family Dynamics Consultant to help normalize prenuptial agreements in enterprising families.
• Have family members with prenuptial agreements share their stories and the value they brought to their marriages. Sharing your own story can be helpful too.
• Allow children to consult with your advisory team, estate attorney, family council, etc., to help enable them to have their questions answered.
• Do not threaten or force a prenuptial agreement. In most cases, a conversation in addition to education or facilitation smooths the adoption of an agreement. Think about the end goal—what are you trying to accomplish?

Taking a proactive approach to communicate the intent of the prenuptial agreement can help address issues before they arise and help families maintain their family wealth and legacy throughout the generations.

Author: Natalie McVeigh, Family Dynamics Consultant

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