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Prenuptial Agreements and Advising Your Client’s Adult Children

Prenuptial Agreements and Advising Your Client’s Adult Children

Often when business owners look to the future to consider what could be a threat to business success and longevity, forces such as innovation, change in consumer behavior and competition are what keep owner’s up at night. Where those should be thought of and discussed with your leadership team on at least an annual basis, one force many business owner’s overlook is the impact a divorce can have on business finances and productivity.

Successful business’ have a lot riding on them — the employment and lifestyle of their employees, contracts their vendor partners depend upon, and the welfare and lifestyle of the business owner(s) and family. As such, as my partners and I work with business owners across the country, we very much believe in implementing pre- and post- nuptial agreements to ensure business interests are not at risk to divorce proceedings.

[Related: Must-Do’s for Contract Drafting, Negotiating, and Management]

Pre-nuptial agreements get a bad rap. The thought of negotiating the breakup of a marriage before it has even started puts a bad taste in everybody’s mouth, especially when love is in the air. Greed and power are often feelings associated pre-nuptials. However, in my line of work, we like to approach it from discussing it from a different place, with the intent to protect the business and all those who depend upon it.

According to the American Academy of Matrimonial Lawyers, 63% of those solicited in 2016 stated they saw a drastic increase of drafting prenuptial agreements for couples planning on getting married over the past three years. And 51% of the attorneys saw an increase of Millennials going through the prenuptial agreement process. The purpose for sharing those statistics is that over the last few years, I have also seen the same uptick of these discussions and wanted to offer insight if you are finding yourself in a position where a pre-nuptial agreement should be considered.

In my recent experience, these conversations are with adult children of the business owner, sometimes who have no substantial wealth of their own, and often didn’t know the extent of their family’s net-worth. The adult children sometimes are actively involved in the business and are planning to assume ownership one day and other times they are future beneficiaries of the estate, which could involve real estate or other assets that contribute to the business. With these sort of complexities, if a wedding day is on the horizon with your children, grandchildren etc. consider:

1. Plant the Seed

As your children mature and start to date seriously you should begin the conversation early about your desire or condition for them have a prenuptial agreement. Emphasize that this document is to protect them and the family assets, and it is not a judgment on whether you think their relationship will last.

While it may not be romantic, get your child’s buy-in on the process early on. Starting the discussions early sets clear expectations of your desires. Doing this ensures that they know what is expected of them and will help them navigate the conversation with any serious contender and mitigate surprises down the road.

2. Start Early

At the point that your children become engaged, the prenuptial agreement process should start. Attorneys advise this process to start with a minimum of 6 months before the wedding date. It would be ideal and advisable to finalize the prenuptial agreement before planning the wedding.

3. Separate Attorneys

Both parties should secure their own attorney before they start to plan the wedding. No one wants to put hefty deposits down on venues, dresses and honeymoons before both parties agree to move forward with the process.

It is crucial that both partners hire and pay for their own attorneys to get unbiased counsel. If your child and partner do not have separate attorneys, the pre-nup could be deemed unfair if in the unfortunate event divorce proceeds start and ultimately might not be enforced.

4. Investment in Their Collective Future

Whether the couple is young and starting out or are more experienced and have more assets to protect, a prenuptial agreement could avoid any future conflicts if the marriage does dissolve. Done right, a prenuptial agreement is not one-sided in favor of the partner with the most money; instead it protects both parties in the event of a dissolution of marriage.

[Related: Divorce and The Millennial: How to Cope When Your Peers Don't Relate]

A pre-nup is not just about protecting family assets. It can also require contingencies such as 6 month’s commitment of marriage counseling before starting divorce proceedings, or any other agreed upon action from both parties to resolve conflict and make the marriage work. It can establish maintenance or support in the event one partner decides to stop working to raise kids either during marriage or after divorce. A pre-nup can also ask for further financial support of your child’s partner after an untimely death.

There are a lot of conflicting arguments on whether a prenuptial agreement strengthens or weakens the marriage. Ultimately it is your child and your child’s partner’s decision on whether they want to go through the process and sign one. You cannot threaten to disinherit the child if they choose not to; however, there are steps that you can take to further protect your business and family assets. Understanding where your child’s feelings and desires are on the matter will help you set the proper course to ensure his/her future, as well as that of the legacy of your business.


Adriana Puente is an Associate of The Rawls Group, a business succession planning firm. Adriana specializes in dealing with the issues that must be resolved by business owners to implement succession strategies geared towards building business value. For additional information, visit or call 407-578-4455

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