Accumulating wealth is very often an arduous process, and one that takes a long time to complete. Handing that wealth down to the next generation is something that many families take a great deal of pride in, and hold up as a goal. For wealthy families in Texas and elsewhere, protecting that wealth from loss in a divorce is a top priority. Requiring a prenup as part of an inheritance structure is one way that families help to ensure that wealth remains part of the extended family.

For those who take this approach, provisions are laid out in the estate planning documents so that all parties understand what is expected of them. For the generation that is intended to inherit, the stipulation is put into place that a prenuptial agreement must be signed prior to receiving inherited wealth. In some cases, details about what must be included in the agreement are outlined.

This approach may seem excessively controlling to some readers, but others will recognize the utility that such a requirement provides. If the intended outcome is for children or grandchildren to inherit family wealth and use that inheritance to enhance their lives, then losing a sizable portion of those assets to a divorce is clearly not in line with those expectations. Creating protections against loss is nothing more than savvy financial planning.

It should be noted that Texas families who require a prenuptial agreement in order to inherit are not making a statement about the chances of success that a couple may have, or the risk of divorce. In fact, this requirement is often put into place long before the intended heir even meets his or her future spouse. The hope is that the marriage will thrive, and that the couple will make use of their inheritance to enjoy their lives and provide for their children, thereby keeping the wealth in the family for future generations to enjoy.

Source: wealthmanagement.com, “Seven Tips For Managing Sibling Wealth Disparity“, Doug Baumoel and Blair Trippe, June 29, 2017