Prenups - New Albany, Indiana
Several recent media reports have pointed out an interesting phenomenon of modern culture: Millennials, the group of young people born beginning in the mid-80s to late-90s (aged roughly 18 to 34) have far outpaced their parents in protecting their assets during marriage by signing personalized prenuptial agreements before walking up the aisle.
What Does a Prenup Do?
Prenuptial agreements are contracts specifically designed by the individuals to ensure that, in the event of a divorce, debts and assets are distributed according the couple's agreed-upon terms. They are designed to act as a safeguard and smooth the way in the event a split turns contentious. The contract establishes property rights and responsibilities and is signed by both parties. These agreements, according to John Slowiaczek, president of the American Academy of Matrimonial Lawyers, essentially protect three main areas: increase in the value of separate property, inheritances, and community property division. Statistics show that more than half of today's marriages end in divorce, so prenups have become an increasingly popular tool for millennials who arenít confident or are simply cautious about the prospects of their marriage lasting for the rest of their lives.
Learn from Experience
Part of that skepticism, according to stories by CNBC, The Washington Post, and others, is born from experience. Because divorce rates climbed dramatically with their parentsí generation, millennials in general are less likely to trust that any relationship will have the longevity more commonly seen among their grandparents.
Another reason the agreements are becoming more popular is that this generation is waiting much longer to marry. The Post reports that in the 1970s, 80 percent of people had married by age 30; but presently that percentage isnít reached until age 45. According to a study by Wakefield Research, 71 percent of millennials would be willing to postpone marriage to relocate for a job, and 72 percent would be willing to postpone having children. Because they are waiting longer, often into their later 20s and 30s, couples usually have accumulated more wealth and assets than their parents had when they married, so they simply have more to protect.
On the other hand, because they are marrying later, millennials typically have also managed to accumulate more debt, especially from attending college or other programs. The Post reports that times have changed: In1989, for example, 17 percent of couples had student loan debt; the current number is 41 percent. The amounts of the loans are also much higher. In 1993, the average debt was $9,400, whereas now the average is more than $30,100. The prenuptial agreement can be used to make sure the debt stays separate, a useful tool when one partner owns a business. Keeping the debt separate ensures that the business is safe from collectors if the other party goes into arrears.
Practical, or Unromantic?
For many years, the contracts were viewed as being unromantic and, perhaps, a step toward divorce before the marriage even started. However, millennials who have been faced with the experience of their own divorcing parents or friends or extended families have used that experience and turned it into the practical approach of the prenuptial agreement.
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.