MIAMI, Florida. If you plan on passing significant wealth to your children, you likely want to make sure that your children keep the wealth in your family. If your child is getting married, it is important that your child consider how he or she will protect his or her wealth. One way to ensure that the wealth stays in the family is to have your children sign a prenuptial agreement before they get married. However, what can parents do if their children don’t want to sign a prenuptial agreement?
According to Forbes, one of the best ways to broach the subject of prenuptial agreements is long before your child is engaged to be married. Instead of waiting until your child is engaged, it might make more sense to start talking about wealth with your child when he or she is still in his or her teens or college years. By having conversations about the importance of a prenuptial agreement in protecting wealth, the conversation becomes more about responsible planning rather than about the person your child is dating. Helping your child understand that a prenuptial agreement is protective and ensures that his or her children are financially protected can make a difference when the time comes.
But what if your child still refuses to sign a prenuptial agreement? There are still ways you can protect your child’s wealth and inheritance. Some parents may put the child’s inheritance in a trust in the child’s name. Parents can also put provisions in the trust that require the child to have a prenuptial agreement in place in order to receive the inheritance.
There are other situations where parents may have a vested interest in their child signing a prenuptial agreement. If you plan to give your child money to put a down payment on a house, if your child gets divorced, the ex might be able to keep the house and therefore your hard-earned money. A prenuptial agreement can make it clear that this money would ultimately go back to your child should he or she get divorced. Another situation where a parent might want to make sure a child has a prenuptial agreement in place would be a situation where a parent co-signed a child’s home loan. According to U.S. News & World Report, the parent would ultimately be responsible for any financial decisions the child makes while living in the home, so it would be fair to ensure that the child gets a fair settlement during the divorce. You wouldn’t want to find yourself having to pay for a full mortgage if your child ends up stuck with alimony.