A prenuptial agreement or prenup is a contract between two people before they marry. It outlines how the couple will handle their finances, property, and other assets in the event of a divorce or separation.
When it comes to prenuptial agreements, millennials are a generation that is quickly changing the landscape. More millennials are choosing to sign prenups before getting married. While this may seem like a surprising trend, there are several reasons why this generation is turning to prenups in more significant numbers.
Millennials and Families
Research has shown that many millennials do not have their own families compared to the previous generations. Many stay with their parents even if the economy is performing well. The majority are not married, or they marry later in life. Therefore, it is not surprising that this generation is more open to the idea of a prenuptial agreement than previous generations.
And if they get married, they’re most likely to have a bachelor’s degree. But even if they delay marriage, many millennials live with a romantic partner. Around 12 percent of millennials lived with an unmarried partner in 2019. The figure is slightly higher than the percentage of Generation Xers living with an unmarried partner in 2003.
Reasons for Prenups
Millennials have a different view on prenups compared to previous generations. Their primary focus on the agreement is the finances since they have more assets than previous generations.
Here are the reasons why millennials are keen on getting a prenup before getting married.
Protect their Assets
Millennials are waiting to get married later on in life since they have to finish school and establish their careers. Millennials must also build up their assets, including a house, a car, savings, and investments.
Because they have more to lose, they must protect their assets if the marriage does not work out. A reputable divorce lawyer can use the agreement to ensure they protect their assets if they end the marriage. The agreement spells out what is considered separate property and what would be divided in the event of a divorce.
Financial Awareness
Many millennials are also financially educated, so they understand the effects of financial problems on marriage. Since they grew up during a time of economic uncertainty, they have first-hand knowledge of how detrimental money problems can be to a relationship. This knowledge often leads them to seek ways to protect themselves financially, including prenuptial agreements.
While some may view prenuptial agreements as unromantic, millennials see them as a way to safeguard their future. In today’s society, marriages don’t always last forever. Couples often come out with little to show for their years together. A prenuptial agreement can help protect a person’s assets in the event of a divorce, ensuring they walk away with what they’re entitled to.
Divide Debt
For millennials who have student loans or other debt, a prenuptial agreement can also be used to protect each spouse from the other person’s debt. This can be important if one spouse has significantly more debt than the other. If the couple divorces, they can use the prenuptial agreement to determine how that debt will be divided between them.
Many millennials have an average of $38,877 in student debt. The figure is higher than the 2020 average of $28,400. So, if they get married before paying off the debt, they must ensure that their debt isn’t transferred to their spouse. A prenuptial agreement can help protect each spouse from the other person’s debt and help them determine how that debt will be divided in the event of a divorce.
Practical Reasons
The millennial generation tends to be pragmatic when it comes to marriage. Many have witnessed the effects of divorce on their parents and other family members. As a result, they are more likely to approach marriage with a business-like mindset. They want to protect their assets and plan for the possibility of a future divorce.
A prenuptial agreement can provide millennials with peace of mind. It can give them a sense of security that their assets will be protected in the event of a divorce. It can also help them to avoid costly litigation if they do divorce.
Despite the increase in prenups among millennials, there are still some misconceptions about this type of agreement. Some people believe that prenups are only for the wealthy. Others think they are only for people planning to get divorced.
The reality is that prenups can benefit couples of all ages and income levels. If you are getting married, it is crucial to have a conversation with your fiancé about your financial goals and objectives. If you are on the same page, then a prenup can be a smart way to protect your interests in the event of a divorce.
