A recent article in the Los Angeles Times discussed the reasons that more and more young adults are getting prenuptial agreements before they marry. “Zillennials,” who are in their late 20s to early 30s, are more likely to see a prenup as a practical step to protect their current and future assets and to value financial transparency with their partner than previous generations did. Another reason some cite is protecting their own family’s wealth that they will one day inherit.
As parents of a young adult, even if your family’s share of the much-touted “Great Wealth Transfer” of some $84 trillion being handed down from Baby Boomers to their children, grandchildren and beyond feels small, it can be a significant amount of assets that you and those who came before you worked hard for.
That’s why it’s wise to talk to your child about the importance of getting a prenup before there’s a potential spouse in the picture. This way, the focus can be on what they’re protecting and what’s at stake if they don’t protect it. If you wait until they seem to be headed toward marriage, it can feel like an indictment of their chosen partner.
Keeping inheritances separate
Inheritances by individual spouses are initially considered separate rather than marital property in California and therefore not subject to community property rules. However, it’s easy for inheritances to become commingled with marital property – for example, by depositing the money in a joint bank account or using it to buy a house.
You don’t have to share precise inheritance information with your child. You may not even know at this point how much they stand to inherit. The important thing is for them to know that they need to take steps to protect family assets that will one day be theirs.
Pressuring someone to sign a prenup can backfire
If your child is already engaged or headed toward marriage, it’s crucial to avoid putting too much pressure on them. Further, if you pressure your future in-law (or your child does), any prenup that results can be ruled invalid in a divorce.
You also cannot get directly involved in the creation of their prenup. That needs to be done between the two spouses-to-be and their separate legal representatives. This is essential to help ensure that it is fair to both parties.
If you have questions or concerns about the need for your child to get a prenup or would like them to learn more about how they work and what they can do to protect their future inheritance, getting legal guidance can serve as a solid step forward.