Yesterday, as I read some more in Charles W. Collier’s Wealth in Families, I came across a section where he was interviewing Dr. Lee Hausner, a Los Angeles-based clinical psychologist and author of Children of Paradise: Successful Parenting for Prosperous Families. Collier quoted Hausner as saying,
I believe in a prenuptial agreement because healthy relationships should not be based on finances. A prenuptial agreement is a business contract, and
. . .families should protect the business or financial assets of the family. [A prenuptial agreement] protects wealth that was created before the marriage. Signing a prenuptial clearly indicates that money is not the motivation for this marriage. . . .
Families of wealth should talk about prenuptials from the time of their children’s adolescence. They need to explain the importance of the wealth protection philosophy of the family and how this will enable the financial wealth to grow for future generations as well as providing lifetime benefits to the current generation. Family money should have nothing to do with the love between two individuals who wish to marry.
When discussing this idea with future in-laws, it is important to emphasize that, even with a prenuptial, everyone will benefit from this type of financial wealth preservation. There can be trips, vacation homes, educational trusts for children, and retirement security, for example.
. . .
Hausner’s comments reminded me of some issues we faced in our family a few years ago when our daughter was about to be married.
The idea that we might need to think about documents like prenuptials had never crossed our minds. But there I was, a couple of months prior to the wedding, holding our annual corporate meetings, and I happened to mention that our daughter was soon to be married. Our estate planning and structures attorney immediately said, “She and her husband-to-be need to sign a prenuptial agreement.”
I was shocked.
Everything I had ever heard about prenuptials said they were simply and merely, if you will, “plans for divorce,” the ethical equivalent of accessories to a crime.
As we talked about the idea, our attorney explained things in a way that I can understand, and I came away with the conviction that he was right: Our kids, as beneficial shareholders of our family business, really do need to have prenuptial agreements, and the need for prenups is there with or without divorce. Instead, the creation of a prenuptial agreement ought to be viewed as a form of business insurance. And for well-meaning couples who enter marriage with open hearts and good faith, the presence of a prenuptial should bear no more ethical weight than the purchase of property and casualty insurance. Read the rest of this entry »