While there are many families that struggle with not having as much money as they would like, there are others in California and elsewhere who face a different financial struggle: how to properly manage their current and prospective wealth. Young people who came from a wealthy family, or have ambitions to become wealthy on their own need to learn how to do this. When the prospect of marriage looms on the horizon, considering the benefits of a prenuptial agreement can be essential.
There is a foundation that sponsors a biannual conference to teach money management skills and discuss the ins and outs of such agreements with young adults facing this situation. Such conferences and discussions have mushroomed in recent years, finding a new popularity and acceptance for a frank and direct discussion of the issues involved.
In the next few decades, approximately $40 trillion of accumulated wealth is anticipated to pass to the younger generation, which means that many who stand to inherit their share are badly in need of adequate instruction on how to manage and invest it. In many instances, financial institutions are helping to sponsor educational programs, in part with the hope of retaining the heirs to significant fortunes as clients. In nine out of 10 cases, statistics show, those who inherit wealth change financial advisors.
With many marriages ending in divorce, and, in some instances being relatively short lived, a prenuptial agreement is a way of safeguarding against the prospect that a large family fortune will be greatly diminished by a possibly brief relationship. In instances where there are children from a previous marriage, a prenuptial agreement is a good way of providing for such children and making sure that a new marriage does not lead to the shortchanging of an existing family.
Source: The New York Times, "Courting the Next Generation of the Rich," Charles Paikert, Oct. 16, 2012