Prenuptial agreements may have once had a negative stigma attached to them. These days, an increasing number of couples are signing a prenuptial agreement before tying the knot with their partner.
A recent survey from the American Academy of Matrimonial Lawyers (AAML) discovered that more than half of attorneys surveyed reported an increase in the number of requests for prenuptial agreements by millennials.
It’s not just millennials that are increasingly using prenuptial agreements. 62% of attorneys stated that they’ve seen an increase in the number of requests for prenuptial agreements among all of their clients over the past three years.
What is a prenuptial agreement?
To clarify any confusion, it’s important to define what a prenuptial agreement can accomplish. A prenuptial agreement is a document that allows couples to define the terms of their marriage. They are used to protect both spouses’ property rights and ensure both parties are protected if the marriage ends in divorce.
Some people primarily view prenuptial agreements as a way to protect someone’s assets. While that is certainly one reason to use a prenuptial agreement, it’s not the only benefit it can provide. Other potential reasons for a couple to enter into a prenuptial agreement include:
- Clarifying how property will be passed on to heirs after death
- Protecting one spouse from the debts of the other spouse
- Avoiding a prolonged divorce if the marriage ends prematurely
Why are millennials choosing prenups?
What is it about millennials that are making them use prenuptial agreements at a higher rate than older generations?
A big part of the reason may be due to the fact that millennials are getting married at an older age than previous generations. Because they’re older, they’ve been able to accumulate a certain amount of assets. These assets may be savings in a retirement account or a home they’ve purchased.
According to the AAML survey, respondents reported that the most common item covered in prenuptial agreements is “protection of property.” In other words, millennials have worked hard to accumulate their property during their single years. They want that hard work to be protected during their married years, too.
Debt may also play a hand in leading partners to enter into a prenuptial agreement. More than 40 million people have student loan debt. If one party is debt-free, the prenuptial agreement can insulate them from their partner’s debt if the marriage ends in divorce.
Even though prenuptial agreements may carry a negative reputation, the reality is they can offer a number of benefits in the right circumstances. Thinking about your and your partner’s goals can help you identify whether one is right for you.
