Affluent families in Texas often want to ensure that their fortunes stay within the family for generations. A prenuptial agreement represents a legal strategy that establishes the terms of a divorce prior to marriage. Wealthy parents often strongly encourage their children to execute these documents to limit settlements to potential ex-spouses.
When a child anticipating marriage resists the concept of a prenuptial agreement, parents might win them over by explaining that it preserves assets for future children. Without the agreement, a divorce settlement might assign a large portion of marital assets to an ex-spouse without any guarantees about the assets going to children of the marriage. Financial planners recommend that parents frame this discussion as a matter of preserving a family legacy. The adult child about to get married has an obligation to act as a steward of the family fortune or business and take appropriate steps to preserve the wealth.
If a child still refuses to complete a prenuptial agreement, then parents have an alternative method for protecting assets. They can set up trusts to hold assets and establish rules for distributions. Rules known as prenuptial provisions on trusts require an heir to execute a prenup or have restrictions placed on trust distributions.
When a prenuptial agreement is in place, it could reduce the number of legal problems that arise when a high-net worth individual ends a marriage. A lawyer could inform a client about how the prenup or state law could guide property division and other issues like child custody and support. If necessary, an attorney could manage negotiations with the former partner and strive to create a settlement outside of court.