Millennials, the children of Baby Boomers, seem far more likely to insist on a prenuptial agreement before marriage than their parents, according to this article in the Washington Post. Is this an odd trend or perfectly sensible?
A brief history lesson: Baby Boomers, born right after World War II and raised in the 1950-1965 era grew up in a rather conservative time for marriage. In this era, divorce was still fault-based in nearly all states and considered a social stigma. The idea of women separating their property from their spouse was a foreign concept because women were still perceived as part of the household with the man at the top of the food chain.
Prenuptial agreements did not emerge until the 1970s as most states moved to no-fault divorce and the women’s movement brought more equality to marriage and the end of a marriage. Consequently, divorce rates began to rise significantly and continued to rise. As marriage became less of a forever commitment, spouses began to think about safeguarding assets and support in the likelier event of divorce.
Millennials grew up in an era where divorce was common and not a stigma; as such, their concept of family differs greatly from that of their parents. Millennials welcome their independence and do not want to sacrifice their individual gains to their spouse simply because the marriage dissolved. Knowing that divorce laws generally divide marital property equally, millennials see the prenuptial agreement as a way to hold on to what they feel rightly belongs to them.
So what are these items? Remember that most millennials wait much longer to marry, and as a result, have had a chance to amass their own separate property – significant items like a house, cars, retirement funds (however slim) – and want to retain those items in the event of divorce. Also, if both spouses have careers, especially individual businesses born of entrepreneurship, those spouses will want to protect their career investments. Prenups can also protect one spouse from becoming liable for student loan debt of the other spouse, or to safeguard intellectual property developed during the marriage.
A simple example: A and B have become engaged; A has built a digital marketing business from the ground up and its success is tied to A’s name and work. B has been a successful medical device sales rep and has a strong client base and stock in the company. If they would divorce without a prenuptial agreement, A would have an interest in B’s company stock accrued during the marriage and B would have a claim to the growth of A’s business during the marriage. To avoid an ugly divorce battle that might threaten both of their professional interests, A and B decide to enter a prenup and keep each other’s business interests as separate property, thereby leaving very little marital property to divide. They also decide to waive maintenance given both have been successful.
This is but one example of how a prenup allows a young couple to anticipate very important financial issues in the event of a divorce and resolve them before even saying “I do.” And because more people use them today, more and more millennials will want to do so as well.
If you have questions about prenuptial agreements, contact us – we can help.