3... Or They Can Just Make No Sense
The other option is to go ahead and ignore everything we know about what the character becomes in the future, which is what the Star Wars prequels did to Yoda. When we meet him for the first time in The Empire Strikes Back, he's a wise old Muppet who tells Luke that war and battle do not bring glory and that a person shouldn't be judged by his size or fighting abilities.
"Size matters not..."
Unfortunately, the second movie, which took place several decades before he dispenses his wise advice, needed an awesome sword fight for its climax. So we get Star Wars' answer to Gandhi hopping around like a coked up-circus monkey, flailing his lightsaber around before leading clone troopers into a glorious battle against a droid army.
"...as long as you have a laser sword and super powers."
Comparing his actions to what he tells Luke in Episode V gives the impression that Yoda has either:
A) Turned into a bitter old hypocrite who is conveniently neglecting to mention that he didn't always live up to the standard that he's setting for others
B) Conveniently forgotten everything that happened a couple decades ago, making him more deserving of his cultural reputation as a stoner than previously suspected.
C) Is sabotaging Luke by steering him away from the violent tactics he knows get results.
The Star Wars prequels are so excessively guilty of abandoning logic to shoe horn characters in that fans had to make up a bunch of wild theories to try to make a couple of characters fit better. The absolute silliest excuse was when they brought in C3PO so that viewers could enjoy more of his witty banter with R2D2. Turns out that Luke's dad built him when he was a little kid. Fans had to put up with that little gem of WTF so Lucas could have more of his beloved robot comedy duo taking up screen time. But this means that the characters know way too much for any of the subsequent movies that everyone loved to make sense. Are they pretending to be in the dark with everyone else about who Vader really is? Are they secretly pulling the strings behind the scenes?
2What's the Opposite of Suspense?
Even if film makers can avoid all of the pitfalls mentioned above, there's one problem that's almost guaranteed to sink a prequel before it even sets sail. It's called suspense, or rather the lack thereof. The vast majority of movies that get prequels are action films, a genre that's driven by the conceit that death is around every corner.
No matter HOW cool your costume looks.
A prequel crushes this tension right from the get go. In Star Wars Episodes I through III we know that Anakin, Yoda, Obi-Wan, Palpatine, R2-D2 and C-3PO all have to be alive at the end. Same thing goes for Wolverine, Cyclops, Sabertooth and Stryker in Origins.
But you don't need it to be a movie with sword fights for a prequel to suck. Once the question of "Where's this going? Is this character going to make it?" has been eliminated, the question at the back of our mind becomes "How are we going to get there? Is it going to live up to the vague versions of events I've already supplied in my mind?" Instead of getting swallowed up by the film, the audience is passively judging it. It's the same reason people who have read the book always say they liked it better. The version you had in your head was made specifically for you by your brain. Instead of getting involved in the story, you're sitting back judging how the movie version is different from the choices you made.
We would have given Hannibal a 'fro.
This is probably what tricks us into thinking that prequels are easy to make. We're seeing someone tell a story that we've already told ourselves. This leads us to believe that telling the story our way would have been better. And it would have been. For you. But the rest of the audience would hate your answers just as much as you hated George Lucas'.