The planning stage of a wedding is often very hectic with a lot of decisions to be made. One decision that more marrying couples in the U.S. are making is to have a pre-nuptial agreement. Pre-nuptial agreements were seen as taboo by previous generations, and they were long considered something that is more for wealthy people who want to protect assets. However, family law attorneys have reported an increase in requests for pre-nuptial agreements from marrying couples, and much of the increase can be attributed to the Millennial generation.
What is a Pre-Nuptial Agreement?
A pre-nuptial agreement is a written contract between spouses that dictates what happens with finances and assets during the marriage and if there is a divorce. Prenups are written up and signed by both spouses before they are married.
Prenups are mainly used to clarify financial matters and assets and they include terms for how to split money and assets should a divorce occur. These agreements can offer financial protection to both spouses, and they are written to accommodate the unique needs of each married couple. If a couple gets divorced without a prenup, the division of money, property, and assets, as well as spousal support, will be determined by Illinois law. Having a pre-nuptial agreement in place will give the parties involved control over how their money and assets are handled and divided. Pre-nuptial agreements are only valid when agreed to and signed by both parties.
Increase in American Prenups
The American Academy of Matrimonial Lawyers (AAML) found in a recent study that 62 percent of divorce attorneys have had an increase in the number of clients requesting pre-nuptial agreements. Of the attorneys who responded to this survey, 51 percent say that there was an increase in Millennial clients wanting pre-nuptial agreements. This is a significant increase in requests for prenups over previous generations.
It is clear that the stigma attached to prenups is fading as Millennials are more likely to get a pre-nuptial agreement and view them more favorably than previous generations. An individual or couple considering a prenup should discuss the advantages and disadvantages in relation to their specific situation with a family law attorney before entering the agreement.
Why are Requests for Prenups Increasing?
There are several factors contributing to the increase in pre-nuptial agreements, especially among Millennials, including economic instability, marrying later in life, outstanding debts (especially from student loans), and a desire to protect future assets. Prenups are also seen as less taboo than before.
The following are the main factors behind the increase of pre-nuptial agreements:
Protecting money and assets including properties, businesses, investments, and personal belongings has always been a major reason for pre-nuptial agreements. This is why prenups have been viewed in the past as a tool for the wealthy. However, everyone has assets that they want to protect.
People of the baby boomer and Gen X generations often came into a marriage with hard assets like homes. Millennials tend to have less hard assets than previous generations, but they do often bring soft assets into a marriage including investments in the stock market and startup businesses. The value of soft assets can fluctuate, and many want to protect these assets with a prenup in case they become valuable in the future.
Another reason why Millennials are more worried about protecting their assets than previous generations is because they lived through the recession of 2008 as well as the economic hardships brought on by the COVID-19 pandemic. Millennials want to make sure their assets are protected in case of economic instability.
Marrying Later in Life
Millennials are marrying later in life than those of the previous generations which is also affecting the increase in pre-nuptial agreements. On average, Millennials are marrying in their late 20s and early 30s after spending their early adult years focusing on their careers. This means that many are bringing more assets to a marriage that they want to protect than previous generations. Millennials are also expected to inherit trillions from their parents in the baby boomer and Gen-X generations in the next few decades and they want to protect their future inheritances with a prenup.
According to EducationData.org, there are more Millennials with student loan debt than any other generation at 14.8 million and the average student loan debt per borrower is $38,877. This means that Millennials are bringing more debt to a marriage than previous generations. Pre-nuptial agreements can protect spouses from the other’s debt and identify who is responsible for payments on specific debts.
Protecting Future Assets
As mentioned above, Millennials are coming into marriages with more assets than people of previous generations and many expect to receive future assets such as inheritances. Signing a pre-nuptial agreement can help protect current and future finances and assets.
Pre-nuptial agreements were viewed as taboo by previous generations as it was believed that prenups were a sign of mistrust or an indication of a future divorce. However, studies have shown that marriages with prenups tend to be stronger. There was also the belief that pre-nuptial agreements were mainly for wealthy people as a way to control and divide many assets.
The taboo surrounding pre-nuptial agreements is fading fast among Millennials. They are more worried about building their careers before marriage and they want to make sure that their future income and assets are protected.
Women Wanting Prenups
With the increase in Millennials requesting pre-nuptial agreements, many of those requesting prenups are women. Over 70 percent of Millennial women are employed, and they are acquiring more assets and financial leverage that they want to protect. This is why more women are requesting prenups than in previous generations.
Among Millennials, both spouses are more likely to be working professionals and have their own assets. Therefore, a pre-nuptial agreement can benefit both parties.
Work with a Family Law Attorney
Pre-nuptial agreements are legally binding contracts once they are signed by both spouses. It is important to draft a pre-nuptial agreement that accommodates the specific needs of the spouses and that is agreed upon by both parties. Those looking to enter a pre-nuptial agreement should get legal representation to help draft the contract and in the event of a divorce, a divorce attorney will ensure that the conditions of the agreement are carried out.
The attorneys at Allen Gabe Law, P.C. are experienced in all matters of family and divorce law and we provide legal assistance to couples or individuals seeking pre-nuptial agreements.
Be sure to contact Allen Gabe Law, P.C. at (847) 241-5000, ext. 121 to learn more about pre-nuptial agreements or other matters concerning family law.