Young adults these days are often entering their marriage with their own income, assets and debts. Yet, are they doing anything to protect these interests in the event of divorce? According to some, “millennials” are more likely to sign a prenuptial agreement than generations past.
What is a prenup?
A prenuptial agreement is essentially a contract between two spouses. A prenup can name which assets and debts are going to be shared as marital property between the spouses, and which assets and debts will remain the separate property of the spouse who owned them prior to marrying.
Prenups can also address spousal support in the event of a divorce. Finally, prenups can address non-economic aspects of marriage, although these are harder to enforce should a couple divorce. Prenups, however, cannot address child support. Child support is calculated per state formulas and cannot be negotiated.
Why are more young adults signing prenups?
One poll of those between age 18 and 34 who were married or engaged found that 40% of respondents had executed a prenuptial agreement. There are some theories on why more young adults are signing prenups.
Young adults may approach marriage pragmatically, especially if they are coming into their marriage with significant debts, such as student loan debt. They understand that finances can become complicated in a marriage. They see a prenup as a way not only to protect their individual assets and income but also as a way to protect their partner from being burdened with debts that are not theirs.
Signing a prenup is an important step to take before marrying, but it is essential that both spouses have independent legal representation when executing a prenup. This way, each spouse can understand how the proposed agreement will affect them both during their marriage and in the event of a divorce.