What once was a trend for the wealthy may now be favored by millennials. We are talking about prenuptial agreements, or what many call “a prenup.”
In the past, many individuals who were wealthy would sign a prenuptial agreement prior to getting married in an effort to protect their assets so that if their marriage didn’t work out, they wouldn’t lose what they worked so hard to earn or what they inherited. But in today’s society, it appears prenups are becoming more common among others, not just the wealthy. To be clear, a prenup is an agreement made prior to marriage that establishes the rights and obligations each party has over the assets they enter into the marriage with.
Business Insider cited that after a survey was conducted by the American Academy of Matrimonial Lawyers, it was discovered that “more than half of lawyers surveyed saw an increase in prenups among millennials, and 62% saw a rise in prenups overall from 2013 to 2016.” The source also highlighted two primary reasons why there is in an increase in the number of prenups being created among millennials which include:
“Americans are getting married later, accumulating more assets and debt before marriage.”
According to Leanna Johannes, who is a senior wealth strategist at PNC Wealth Management, “Millennials have been on their own, accumulated some wealth, either from a 401(k) or a stock program provided by their employer or some real estate, and they want to make sure that the property remains theirs if there are problems down the road. Millennials are creating wealth through their own business startups, intellectual property (apps, software, etc.), and they want to make sure those pursuits will not lose ground in a divorce.”
“Many millennials are children of divorce, making them predisposed to protect their interests.”
Some millennials have already been exposed to divorce and have seen firsthand the negative effects of not having a prenuptial agreement written up. They may have watched one parent lose a significant amount of money that shouldn’t have been divided or they may have witnessed how hard it can be to divide up assets that weren’t acquired in their parent’s marriage. And after seeing what can happen when there is no prenup, some are making the decision to protect themselves from the get-go so they avoid facing some of the same struggles their parents went through.
While prenups once carried a negative connotation, it appears things are shifting as individuals who are entering into a marriage are now trying to protect themselves and their assets as many aren’t willing to throw away the hard work and dedication they have put forth to acquire what they have, even if it isn’t a lot.