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Why a prenup may be important in wealthy families

| May 17, 2018 | Ocean Township Legal Issues Blog, Property Division And Asset Preservation |

Children of some wealthy families in New Jersey may face pressure from their parents to create and sign a prenuptial agreement. This is often not because of any issue the parents have with the child’s future spouse but simply an effort to keep the family wealth from going to that spouse in the event of a divorce.

However, children often resist their parents on this. This is one reason it may be a good idea for parents to start talking with their children about the importance of a prenup when the children are in their teens or are young adults.

Raising the issue of a prenup early has several advantages. One is that it may be an opportunity to also talk to the child about the family wealth. Because financial disclosure is one element of creating a prenup, if there is no prior discussion, this may sometimes be the first time children get a sense of the scope of the family wealth. Another advantage is that discussing a prenup before a potential spouse is in the picture takes the focus away from the person and puts it on the protection of assets. Another way parents might persuade children is by discussing the issue in terms of making sure that the legacy is there for future children.

It is important that a prenup has been prepared correctly and that both people have received sufficient legal counsel. Otherwise, the prenup could be challenged. Without a prenup, a couple will have to go through the process of negotiating property division or having a judge make a decision about litigation. A person who owns a business or has family wealth or other substantial assets who is considering a divorce might want to consult an attorney first to talk about how some of this property might be protected during the divorce.