Antenuptial Policies: An Important and Delicate Subject

Antenuptial Policies:
An Important and Delicate Subject

Family Money
by Steve Swartz

The subject of antenuptial agreements is clearly one of the “unspoken issues” related to family wealth.The courtship and commitment stage of a relationship is fueled by feelings of intimacy and optimism, with thoughts about the material realm well in the background.Yet, when there is a family business or family wealth, it is necessary to deal with this important and delicate businesses and interpersonal issue, a prime example of the overlap of love and money.

A surprisingly large percentage of the accumulated wealth in the United States resides in ongoing family businesses, or in family offices managing theproceeds from the sale of such businesses.Although often “invisible” to those on the outside, it is estimated that approximately 95% of all U.S. businesses are family owned, producing about 50% of the Gross Domestic Product.

The founders and the family successors who have perpetuated these enterprises are often from modestbackgrounds.Financial security and personal pride creates an understandable attachment to the idea of keeping the assets “in the family.”

Business families have had to learn how to balance business success with maintaining family harmony.As a result there is a special sensitivity to addressing business issues that might be disruptive to the family, and a natural tendency to delay or avoid.

Antenuptial agreements are a prime example of such issues because of the potential to interpret them as implying either a lack of trust or a lack of commitment to the relationship, or both.This presents a real dilemma for the family: raise the issue and risk an immediate family disruption, or avoid the issue and risk a future business disruption.

An unfortunate result of this dilemma is the tendency to delay addressing the issue until the next generation becomes engaged to marry.It then becomes apparent that, if the issue is to be addressed at all, it must be raised promptly so that an agreement can be developed before the marriage.The pressure to get this done, combined with the normal pressures involved in planning a wedding, produces unnecessary tension and risk.

Elsewhere in this issue is an interview with one couple who successfully navigated this journey, despite the “last-minute” raising of the issue as a concern of a family business.They were able to do so because of their maturity, and their trust in andcommitment to one another.Their experience should be instructive to other business families.

The alternative is deal with the issues at an early date, well before the question is raised in relation to any one member of the next generation.Dealt with proactively, despite its obvious sensitivity.Create a policy and process for the family that becomes a part of the family/business “ground rules.” We have had the professional satisfaction of helping families develop such policies, and have attached an example by way of illustration.This example is not offered as a “boiler-plate” solution for every family, but as a possible guideline. Editorial comments have been added.

Antenuptial Policy at Kane Industries


At the time of adoption of this policy in 1994, the ownership of Kane Industries had been in the Kane family for three generations.The second and third generations, consisting of Douglas, Jeffrey and Arthur Kane, their spouses and their adult children, have collaborated in the creation of this policy for the purpose of perpetuating that ownership within the Kane bloodline into the third generation and beyond.This goal was extremely important to Gordon Kane and is seen as an important aspect of his legacy to the family.

(Comment: A statement of family legacy is often helpful explaining the rationale for having a policy.Some families also express a desire that future generations see their relationship with the family wealth as temporary stewardship rather than simply as a right to consume).

The desired policy will apply to all family business assets and all inherited assets (both real property and personal property) owned by family members, as well as to the proceeds from the sale of any such assets.However, it will have no application to the personal assets or estate created by any member of the second or third generation (or beyond), either before or during his/her marriage. The policy is intended to deal only with the question of ownership of such assets.It is not intended to negate or in any way undermine the sense of spousal loyalty and support which is integral to the family’s value system and to the nature of the marital relationship.

(Comment: An early statement of the family’s values about relationships and responsibility helps balance any initial reaction of “cold-bloodedness” in adopting the policy).

This policy is intentionally created prior to the subject of marriage arising in the third generation, in order to make clear that it is not being adopted because of concern about any particular individual who may marry into the family.


With that background, we the second and adult third generation members of the family hereby declare it to be the policy of the family that, prior to marriage, each family member who then has an ownership interest in assets of the nature described above enter into an antenuptial agreement with his/her prospective spouse providing that the spouse will have no right to or interest in such assets.A proposed form of agreement will be provided to the significant other at an appropriate time in the process.That form will deal with the circumstances of both death and divorce, and the proposed consequences of either such event.

Other than the singular goal of controlling the future ownership of these assets, the agreement may make any provision whatever regarding financial support and the ownership of other assets.Examples:

  1. The agreement should provide that, in the event of death, adequate provision will be made for support of the surviving spouse, while at the same time providing for retention in the family (including by the decedent’s children) of title to the assets used for such support.  
  2. The agreement may allow a gift or bequest of covered assets, but only if that gift or bequest is accompanied by a form of buy/sell agreement that provides for reversion of ownership to the family.

(Comment:The examples are designed to address common concerns expressed in response to the proposed agreement.Other examples could be substituted where needed).

We acknowledge that the third generation and their children cannot be legally required to abide by this policy.However, we are hopeful that all will do so in the interest of achieving an important family goal, and out of a sense of loyalty and responsibility to other family members.


Recognizing that this subject can be a sensitive one, and that complex legal documents will be required as part of the process, we offer the following suggestions to each family member:

  • Even though delicate, raise the subject with your significant other early in the discussion of possible marriage.Consider giving the proposed spouse a copy of this policy, and describe when, how and why it was adopted.Possible hurt feelings should be viewed as normal, and dealt with openly and respectfully.(Comment:It would be a disservice to the young couple to minimize the sensitivity of the issue.Some statement validating their anxiety will help them deal with it). 
  • Arrange a meeting with your intended spouse, his/her parents and your parents.View this as an opportunity to explain the history and purpose of this policy, and the fact that it was not created specifically for your marriage.Reassure the proposed spouse’s parents that the agreement will not undermine the marital financial relationship, nor deprive the children of the marriage of their full rights as members of the Kane bloodline. (Comment:Often the person marrying into the family is able to understand the rationale and willing to trust the family’s motivation.However, his/her parents may have a difficult time feeling that it is not a reflection on their child.A face-to-face meeting should help to dispel those concerns and hurt feelings).


  • Before beginning the legal process of disclosure, discussion and drafting documents, hold a meeting with your significant other, his/her attorney and your attorney to acknowledge the delicacy of the subject and to make clear to the professionals in what way they can be most helpful.Use this as an opportunity to learn about the steps and timetable of the process. (Comment:In most states, it is essential that each of the parties have his/her own attorney.This suggestion is intended as a method to encourage the attorneys to approach their role in the process collaboratively not adversarially).


  • Sign the agreement well in advance of your wedding.In this way the normal tension associated with wedding planning will not complicate, or be complicated by, this strictly business issue.  
  • At the time the agreement is signed, also agree on the terms of wills for you and your fiance. Sign those wills immediately following your marriage.

These suggestions are not intended to isolate you with this responsibility.Other family members are available for support and counsel during the process.

(Comment:Dealing with this issue can be anxiety-ridden for the young family member.It is very important that he/she know that the family is close at hand for support and advice).

Steve Swartzis co-founder of the McGladrey & Pullen FamilyBusiness Group, the country’s largest group of organizational consulting professionals devoted to working with family businesses and their members.Prior to becoming a family business consultant, he practiced law for 22 years.In addition to his consulting work, Steve is an active workshop presenter and contributor to professional literature concerning family business consulting.