It’s a misconception that half of all marriages end in divorce. In fact, the divorce rate has recently reached a 40 year low. So why, with this decrease in divorces, are more millennials getting prenuptial agreements?
According to a survey of the American Academy of Matrimonial Lawyers, 51 percent of divorce attorneys have seen an increase in prenuptial agreement requests from millennials. And about 62 percent of AAML survey respondents say they’ve seen an uptick in overall couples seeking prenups.
“The reason they’re increasingly popular now is because the laws have gotten more intrusive. In every place in the U.S., there’s no fault of divorce, so the emphasis shifts to financial investigation in these cases and more is at stake. So people are thinking of a way to protect themselves against this kind of stuff. And a prenuptial is pretty much the only way at this point,” explains Raoul Felder, a well-known divorce and family lawyer with over 40 years of experience.
What exactly is a prenup?
A prenup, or prenuptial agreement is a legal document that “opts you out of the system." It says what you get if there’s a dissolution of the marriage,” says Felder. Without a prenup, couples must go through a lengthy court process, which allows the state and the court to decide who gets what – property, bank accounts, businesses, intellectual property and more. Though, this usually only applies to assets accumulated during the marriage. Anything from before the marriage remains separate property.
The most common items covered by marriage contracts, according to the AAML survey, are “protection of separate property” (78 percent of respondents), alimony/spousal maintenance (74 percent) and division of property (68 percent).
However, it’s important to note that is one crucial aspect that prenups can’t cover: children.
“So, you can’t agree to child support; you can’t agree to child custody; you can’t agree to who the babysitters are going to be,” says Felder.
Why you should consider a prenup?
The main reason to consider a prenup is because the future is an unknown and it’s always smart to plan for multiple outcomes. This document can protect your assets, such as a business or an inheritance. It can also protect you if you decide to take off time to raise the kids or if your partner has significant debt.
“The pros of a prenup are that it saves you from the nightmare of money – money spent on a lawyer, having to show up in a courtroom, fighting about who gets how much money,” says Felder.
And prenups aren’t just for celebrities or the super wealthy. “The truth is, it’s right for everybody, even people who don’t have money,” says Felder. “This is a country where the waitress will open a restaurant five years later; the guy who sells you tickets at the movie theater may eventually own a chain of movie theaters.”
What are the downsides to a prenup?
Of course, there are some cons to a prenuptial agreement. The biggest one, according to Felder, is that “it is very unromantic.” And in some cases, it can lead to major disagreements. “There are situations where you end up in a divorce before you get married,” adds Felder.
How should you approach the prenup conversation?
Starting the conversation about a prenup with your partner can be awkward. No one likes to talk about money or divorce, but it’s an important topic for every engaged couple – whether you decide to get one or not.
Felder recommends proceeding with extreme caution. “It’s like two rhinoceroses making love. How do they do it? Very carefully.”
For the best results, start early. It’s certainly not a discussion to pull out the day before you say ‘I do.’ Ideally, you should start talks before the invites go out, just in case. Though, if you miss the boat, you can still enter a postnuptial agreement after the wedding.
It’s also in your best interest to be open and honest during negotiations. “If you go to enter a prenup, do it whole-heartedly and do it honorably. Because if you don’t, it could be set aside. In other words, if you enter a prenup and say ‘this house was given to me, my husband doesn’t know it’s in my name, I just won’t mention this.’ It never works,” explains Felder, adding that you should get two lawyers to mediate the discussions and draw up the document.