A prenuptial contract, or prenup, is a private agreement entered into between a couple who plan to get married. The purpose of the contract is to change some or all of the automatic financial values of marriage.
Over many generations in the past, getting a prenup was considered a sign of setting yourself up for a dismal marriage. Drawing up a contract about how to divide property and finances before even getting married seemingly hinted at a weak relationship.
However, the majority of the millennial generation does not share this idea. Unlike former generations, those currently in their 20s and 30s do not feel guilt, mistrust, or dread at the thought of getting a prenup. There are several reasons for this.
- Millennials are getting married at a later age
The average age to get married has drastically increased over the last couple of decades. Unlike those of former generations, who married in their early twenties, millennials are choosing to wait until their late 20s or 30s to get married.
Overall, millennials are focusing more and more on their professional careers. A lot of people within this generation are earning money through their own business start-ups, intellectual property (e.g. apps), and want to ensure that these pursuits will not be lost in a divorce. They are therefore getting married later. In this way, they have more assets by the time they decide to tie the knot.
Getting married later means both people usually bring more money and perhaps even physical or business property into the marriage, property they’d need to protect in case the marriage fails. Therefore, a prenup is more or less crucial.
- Personal experience
A lot of millennials have already suffered through their parents’ divorces. More than one-third of millennials come from single-parent or divorced households. This means that they have quite a grasp on what’s at stake during and after a marriage. The prevalence of growing up and being immersed in divorced has prompted millennials to think differently about relationships and planning for an “exit strategy”, if need be. This might seem cynical, but it is more a matter of practicality. Having gone through the process once, most millennials want to do what they can to avoid the financial (and emotional) mistakes they saw their parents make.
It must also be noted that most millennials entered the workforce during and after the height of the economic recession of 2008. The economic state at the beginning of many millennials’ careers had a large impact on their financial decisions, such as the choice to sign a prenup.
- More women are interested in getting prenups
There has been an increase of women in the workforce over the last few decades, which may also be affecting the rise in prenuptial agreements. Research shows that more than 70% of millennial women are employed, and a lot more women are starting to pay alimony after getting a divorce than in previous years.
The role of women in relationships and family structures has changed. Women are attaining college degrees at higher rates, accessing higher wages than ever before. Thus, we may be seeing the effect of female millennials who want to protect their financial interests when entering into marriage.
As more women start to obtain their own assets and gain financial leverage, there is an increased interest for them to sign a prenup before getting married. These days, with more equalisation in the workforce, both spouses are working and becoming professionals. In heterosexual marriages in particular, it has become more common for prenups to occur, as both are in the workforce, so both benefit from signing a prenup
- Millennials want to protect future assets
A prenup is of course helpful in guarding and protecting the assets that couples already have going into a marriage. However, a prenup can also protect assets that individuals might obtain later on, or secure their financial situation in the case of divorce later on.
If one person is making a significantly higher income than their partner, they may want a prenup to protect themselves from future support or alimony payments. Millennials are taking heed of this aspect of prenups more than the generations of the past.
- Prenuptial contracts have improved
Prenups have changed over time, no longer considered merely a legal document used only by the rich and famous, or those getting married multiple times. In years past, spouses wanted to protect any family money or business interests they brought with them into a marriage. Yet the current trend is changing for prenups any and all relationships involving people developing different kinds of careers.
Millennials are delving into work fields that did not exists in previous decades, such as creating a start-up company, or developing a new app. A prenup protects against the potential for divorce that threatens the modern pursuits with which millennials are involved.
- Millennials have more access to information about prenups
In a culture where information is at our fingertips, it is easy to access help and guidelines on the details of marriage and divorce. Millennials are, simply, more clued about about prenups than former generations were.
With this access to knowledge, many millennials have learnt that marriage is not just a commitment to love and care for your partner – it can also involve taking on your partner’s debts and financial obligations, and making every financial decision together going forward.
Prenuptial agreements are arguably no more than a back-up plan for a worst-case scenario. Divorce which should be fair for both partners — no matter who comes into the marriage with more assets. Prenups necessitate important financial conversations and set couples up for more open discussions in the future. This information is becoming common knowledge for millennials, who are, evidently, not unnerved by the idea of getting a prenup.
See this related article: Seven reasons to consider a prenup.