As a parent to an adult, you may be well aware that your family’s money or own wealth is at risk if your son or daughter gets married…and then divorced. And with the great wealth transfer on the rise and the average Gen Z and Millennial receiving $320,000, it’s no wonder that parents (you) are concerned about your children’s inheritance! So, what can you do about it? Let’s talk about how prenups can help safeguard your children’s future inheritance and how you can support your child through the prenup process.
What is a prenup, and how can you help?
A prenuptial agreement (or prenup) is an agreement between a future husband and wife that details specific financial arrangements between them, both during the marriage and in the event of death/divorce. What a prenup is NOT is something a parent is involved with, legally speaking. Unfortunately, parents of a child may not legally become involved in a prenup–this agreement is between two people, and those people do not involve either party’s parents. However, what a parent CAN do is support their kid emotionally and potentially financially during the prenup process.
The key takeaway is that parents cannot force their children to get a prenup, nor can they pressure them. Not only is it morally wrong, but legally speaking, it can also cause problems with the enforceability of the agreement. However, you can encourage your child to get a prenup and throughout the process, and even pay for it, if that’s your jam.
How to support your child through the prenup process
Okay, so now that you know you can’t force your kid to get a prenup, how can you provide the best support possible for your child to get a prenup and make it through the prenup process? Here are some tips:
Offer to provide financial support
If money is the barrier to the prenup, then you can offer your financial support to assist in obtaining the agreement. With HelloPrenup, you can get a prenup for $599, and if you want to add on attorneys, it’s an additional $699.
Do your research
Make sure you understand what you’re talking about so you can speak intelligently on the matter. HelloPrenup has tons of resources on our blog. Here are some good prenup-starter articles: What is a prenup? And Prenups 101. You can also find tons of state-specific content in our blog, as well.
Provide emotional support
Recognize that the prenup process may be stressful for your children. Show your support by actively listening to their concerns and offering empathy without overstepping their need for space. A distraction-free outing or a heart-to-heart conversation can provide comfort and reassurance during this time.
What clauses in a prenup can protect a child’s future inheritance
So, if you’re here, you’re probably concerned about making sure your money stays in the family and doesn’t go to a potential ex-spouse, and we totally understand that concern. So, to help you feel equipped with the proper knowledge on this matter, let’s talk about what clauses ensure that your child’s future inheritance stays protected.
Property division upon divorce
First things first: property division (this is the meat of a prenup). Dividing property so that each party’s assets stay separate is a good way to protect any future inheritance. For example, inheritances should be kept as separate property and not divisible in a divorce.
Specifically outlining future inheritances
Make sure you outline that any and all future inheritances are kept separate (and not divisible) specifically. While many states do say that inheritances are automatically kept separate–it’s no guarantee. Having a prenup is a much better safeguard.
Death clause
While it’s not always easy to contemplate, planning for the unexpected is an important part of protecting your family’s legacy. By your child including a “death” clause in their prenup that addresses the distribution of assets in the event of their passing, you can ensure that their inheritance remains within the family, perhaps benefiting grandchildren or other designated beneficiaries. This can be achieved by having both spouses waive their right to an elective share (elective share is a right some spouses have to take a portion of an estate, even if they’re written out of the will!).
Financial disclosure
To ensure the inheritance clause in your prenuptial agreement is fully enforceable, it’s advisable to be transparent about the anticipated inheritance. While not always required, disclosing the estimated amount and type of inheritance your child is expected to receive provides clear notice to your child’s partner about what they are waiving rights to. This transparency strengthens the agreement and can prevent future disputes.
Questions to ask a prenup attorney
If you are really hands-on in this process and want to have a list of questions for either yourself or your child to ask the prenup attorney, here are some things you can ask:
- What state law applies to [my child’s] prenup?
- Would a trust be beneficial for our situation? Or are there any other legal documents that we should be considering?
- What are the enforceability requirements?
- What are some examples of prenups that have been thrown out in [your state]?
- What level of disclosure do I need to provide regarding the inheritance I will pass on to my child?
- How can we address appreciation of my future inheritance to my child? For example, if I die tomorrow, and my inheritance appreciates before they divorce, how can my child protect that appreciation?
- What are the elective share laws in [child’s] state?
Bottom line
While you can’t get involved legally (after all, it’s a contract between a bride and groom, not the parents), you can offer your support to your child in the form of emotional or financial support. You can also arm your child (and yourself) with the correct information to go into the process with eyes wide open and get a document that truly meets your needs. You can also ask an attorney any of the above questions to ensure your family wealth is protected in any scenario.
Nicole Sheehey is the Head of Legal Content at HelloPrenup, and an Illinois licensed attorney. She has a wealth of knowledge and experience when it comes to prenuptial agreements. Nicole has Juris Doctor from John Marshall Law School. She has a deep understanding of the legal and financial implications of prenuptial agreements, and enjoys writing and collaborating with other attorneys on the nuances of the law. Nicole is passionate about helping couples locate the information they need when it comes to prenuptial agreements. You can reach Nicole here: Nicole@Helloprenup.com
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