Apple Watch Series 3 won't update

And you did a full un-pair and erase from your wife's iphone?

see>  Unpair and erase your Apple Watch

Taking it off the account is not enough.

The older Watches also need to be erased clean to have any chance of pairing to later iphones. If on ios16 ensure it is iOS16.2

If you've completed all that troubleshooting and the issue is still not resolved, Contact Support for hardware service options

Click here > Contact - Official Apple Support

or phone numbers 

Click here > Contact Apple for support and service - Apple Support

Try these steps:

1.    Make sure that your Apple Watch is connecting properly to its charger. 

2.    Restart your Apple Watch.

3.    Restart your paired iPhone.

4.    Try again to update your Apple Watch.

If the update won't start:

1.    Open the Apple Watch app on your iPhone.

2.    Tap General > Software Update.

3.    Delete the update file.

4.    Try again to update your Apple Watch.

After that

Genius Bar Reservation and Apple Support Options - Apple

and/or

Apple Support

If the Watch is erased and iphone is on iOS 16.2 then I recommend reviewing the steps in the articles below

How to pair an Apple Watch with your iPhone

 Click: How to pair your Apple Watch with a new iPhone - Apple Support or

Can’t pair an Apple Watch with your iPhone

Click:  If you can't pair an Apple Watch with your iPhone - Apple Support  or

Apple Watch not paired with your iPhone

Click:  If your Apple Watch isn't connected or paired with your iPhone - Apple Support

and after that

Genius Bar Reservation and Apple Support Options - Apple

and/or

Apple Support

Does your daughter have her own iphone? You can't do a family setup on Watch series 3

They're still selling it in the Apple refurbished store... if the update is too big for the 3, they should let people update to 7 or whatever actually works.

Having the same problem. Looks like people were able to with iPhones on 16.1 but the update might have reverted that fix?

I've tried turning off Bluetooth and data, restarting phone and watch, pairing manually, etc. It keeps stalling on "Preparing."

I agree. I wouldn't buy one unless I had iphone 6S or 7 to match. I made that point on here when they were still available new from Apple.com a couple of years ago. Caveat emptor.

Don't think I am supporting Apple on this, it has hardly enough memory for the 8.7.1 update and its days are up.

I’m having the same issue. Did you find anything that worked?

only to 8.7.1

Yes it csn be paired and updated but it is a matter of luck with a following wind. It's s 5 year old design.

upgrade to SE 2022