Premarital agreements for children of wealth
Aside from the social element of marriage and the creation of a household, the institution is largely financial. As soon as the marriage partnership is final, the partners become subject to standard contract rules that govern the division of property, care for children and other important economic concerns.
This practical side of marriage is the sole concern of premarital agreements. Married couples already enter into this contract by default, and prenups simply define the terms in a way that fits for the couple personally. That is in contrast to marrying with out one, which would apply a standard set of rules determined by lawmakers to be the best default agreement for everybody in California. Almost everyone could benefit from specific terms, but children of wealthy individuals should be among the most interested in this option.
As mentioned on FindLaw, one of the most common uses for premarital agreements is to keep property in the family. Apart from current holdings, one might also include directions on how to handle inheritances.
Wealthy parents may have to instigate most premarital agreement discussions, as mentioned in an article in Forbes. Children may marry before they have a complete grasp of the nature and demands of being a good custodian of multi-generational wealth. Younger people may also not fully realize the effect that marriage has on legal relationships with birth families.
Forbes suggests that parents should start the conversation as early as children are ready to talk about marriage. The article lays out a number of benefits of this approach:
- It often avoids coming across as a personal attack
- It could help form an understanding of the family’s finances
- It might help avoid internal conflict, especially when a family business is involved
There are many ways to approach this conversation. One would typically choose the right tactic based on the age of the children in question and their levels of financial maturity.