No secret

“Can I tell you a crazy story about prenups?”

This came from an American lawyer friend of ours, who shared an unusual—and frankly unsettling—example from California. He told us that some prenuptial agreements (alternatively known as marital contracts) include weight clauses for women (penalizing them if they gain weight) with specific dollar amounts attached to each pound gained. To prepare for the weigh-in before signing on the dotted line, some women have been known to stuff their pockets with heavy items to give themselves some wiggle room.

While the example is extreme—and thankfully, something we’ve never encountered here in Canada—it highlights a deeper issue: the stigma and secrecy that often surround legal agreements like prenups. Many people associate prenups with distrust, selfishness and the assumption of a future divorce. But this perception misses the point. When it comes to wealth preservation, tools like prenups aren’t about division or suspicion. They’re about safeguarding the wealth a family has worked hard to build for generations to come.  

Though they get a bad rap, prenups are often an essential part of the strategy for keeping family wealth within the family. They’re not meant to undermine the partnership or exclude a spouse from financial security. In fact, when properly structured, prenups can be quite generous, ensuring that both spouses are well taken care of, while still preserving the family wealth that existed before the marriage.

Here’s the key: Families need to have real conversations—early. Long before the wedding bells ring, parents should engage their children in ongoing conversations about the family’s mission, vision and values, including the importance of prenuptial agreements. Just as parents may emphasize the value of education and careers, they should also communicate that a prenup is an integral part of the family’s governance and a requirement for any spouse who is joining the family. In other words, normalize prenups—which are best understood as not about the betrothed couple’s mutual love and trust but rather the family’s responsibility to its future generations.

Not all families are proactive or open about their wealth, of course. For example, it’s not uncommon for a successful husband and wife duo to come to us when one of their children is about to get married and say, “Our daughter has no idea of the full extent of our wealth—and neither does her fiancé. We need a prenup.” Similarly, it’s not unusual for brides and grooms from affluent families to insist their marriage truly is ‘till death do us part’—no prenup necessary.

This raises important questions we constantly work through with families: How can we expect the next generation to steward wealth if they don’t even know it exists, or don’t understand the importance of wealth preservation strategies? And how can families ensure that generational wealth is not only passed down, but preserved for decades to come?

One of the best ways to prepare your children for inheriting—and preserving—wealth is to teach them about money long before they receive it. For example, one father we know set up funds for each of his adult children, each with a six-figure amount, putting them in charge of investing and growing it. The goal wasn’t only about making more money—it was about teaching the next generation how to manage it, how to make decisions and how to learn from the results. 

Transparency about the family’s financial picture and long-term plans is just as important as formal education. If the next generation doesn’t understand the family’s wealth or their role in preserving it, they may not grasp the enormous responsibility they’ll inherit. As one client reinforces to her sons, “It’s not just about passing it on to you. You need to pass it on to the next generation, too.”

To make this vision a reality, many families set up financial structures like trusts, which help ensure funds are used responsibly. For example, a trust may specify that funds will be distributed when the beneficiary has reached a certain age or milestone, like graduating from university.

Without these kinds of controls, wealth can become quickly depleted—much like lottery winnings that often vanish within a few years. But with the right guidance on how money should be accessed and spent—and a deep understanding of its true value—preserving wealth becomes easier and more effective.

While the next generation doesn’t need to know every detail or decimal point, they should at least be aware of their position, even from a young age. Don’t take a page from the famous entertainer who supposedly quipped to his kids, “You’re not rich. I’m rich.” This might have been merely a comedy bit, but it still underscores the importance of awareness from an early age. As another couple explains to their young children, “There are families that don’t have enough, families that do and families who are lucky to have more than enough. We’re in the ‘more than enough’ category.”

One of the most impactful ways to ensure wealth is managed wisely is through a family constitution. Serving as a shared “North Star” that aligns everyone around common principles, a family constitution acts as a blueprint for how wealth should be handled, what values should guide decisions and what responsibilities come with being a member of the family.

But a family constitution isn’t just about the end document—there’s real value in the process of creating it. Family members can come together, voice their thoughts and decide on what’s truly important to them. When conflicts arise, or big decisions need to be made, a family constitution reminds everyone of the bigger picture, keeping decisions aligned with the family’s mission, vision and values.

Philanthropy can also play a key role in a family constitution, addressing the importance for the family to give back and leave a legacy in the community, as well as the types of charitable initiatives that align with the family’s values. It can also guide decisions about whether the family’s name should be publicly associated with charitable giving or if they wish to remain anonymous.

The simple truth is every family wants to preserve wealth through generations. The question is: How do you get there? The answer isn’t by keeping everyone in the dark and hoping it all works out when the time comes. It takes planning, transparency and real talk about the strategies and tools that will ensure wealth is managed with intention and preserved for generations.

Are you ready to begin these important conversations today? Let’s talk.