Increasingly, young adults are choosing to put prenuptial agreements in place before they marry. This is no doubt, at least in some cases, at the urging of their parents.
Someone who’s less than a decade out of college may think they have no assets worth protecting. However, if they have a share of the family business or are going to be inheriting all or part of it one day (likely along with other family assets), they do have a lot to protect in case their marriage ends in divorce.
Starting this discussion early
If you’re a business owner who’s a parent of a young adult, the best time to start discussing prenups is before they’re thinking about getting married or are even in a serious relationship. If you wait until they’re engaged, they may see it as a sign that you don’t like or trust their partner or have no faith in the upcoming marriage. It’s typically wise to frame a prenup as a legal tool to keep the business and other assets in the family.
Under Minnesota law, any assets acquired by either or both spouses during a marriage are usually considered joint property. That means if your business expands or buys new property, your child’s share also belongs to their spouse unless they have a prenup (or a postnuptial agreement) that says otherwise. Even without business assets acquired after marriage, it’s possible for a spouse to seek a share of the business.
Why parents can’t get too involved
It’s not uncommon for parents to try to be too hands-on in their children’s prenups. You can and should make sure that your child knows what they need to protect, but you can’t dictate the terms or have one drawn up for the couple to sign.
A prenup has to protect both parties. That means your future in-law has just as much say in it – and should have their own legal representation. A one-sided prenup likely would be ruled invalid. The same is true if one party is pressured to sign it or presented with it well into the wedding-planning process.
If your child’s spouse-to-be refuses to sign a prenup, there are other ways to help “divorce-proof” your business and other assets. If you have questions or concerns at any point, it’s wise to seek experienced legal guidance to help you protect your business and your family relationships alike.