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Prenuptial Agreements Popular with Millennials

Many people are surprised to learn that prenuptial agreements are popular with millennials (now aged 18 -35). After all, 40 years ago only the very rich used them and they were still surrounded with disdain. Even 20 years ago a prenuptial agreement was rare. It had lost some of the taboo associated with it, but it was looked upon as a negative

prenuptial agreements popular with millennials - Altizer Law PC

Premarital agreement

step for a couple about to be married. It was widely perceived as a statement of doubt that the marriage would survive. Today, however, the number of prenuptial agreements being prepared by attorneys has increased significantly. What is more, all negativity previously attached to the agreement has vanished.

According to a survey conducted by the American Academy of Matrimonial Lawyers (AAML), 51 percent of the attorneys reported an increase in the number of millennial couples creating prenuptial agreements. These attorneys also reported a 62 percent increase in the number of couples of all ages seeking prenups.

What Does a Prenuptial Agreement Accomplish?

In the past, most prenuptial agreements most people knew about were created when a person with significant wealth or who stood to inherit a family business was marrying. Much of the popular thinking was that a prenuptial agreement was created to protect that person from great loss in the event of a divorce, or to prevent marriage simply for financial gain.

Today, prenuptial agreements still address financial concerns in the event of a divorce (and sometimes a death). These agreements may address a number of financial issues, and they are coming to be considered an act of protecting oneself and (sometimes) the marriage. The point of a prenuptial agreement is to protect the assets of each of the individuals entering a marriage.

According to the AAML survey, the most commonly addressed matters in these contracts are:

  1. Protection of separate property (78%)
  2. Alimony/spousal maintenance (74%)
  3. Division of property (68%)
  4. Protection of the increase of value in separate property (64%)
  5. Inheritance rights (42%)
  6. Community property division (24%).

Many agreements today include a statement of responsibility for the debt of the partner, as well.

In general, prenuptial agreements can

  • Differentiate between individual and marital property.
  • Provide for children of a previous marriage.
  • Protect one spouse from the debts carried by the other.
  • Ensure that family property (and business) remains in the family.
  • Outline the financial responsibilities of each partner during the marriage.
  • Delineate how property will be distributed in the event of a divorce.
  • Function as part of an estate plan (with wills and living trusts).

A prenup cannot define any illegal arrangements, address personal (rather than financial) matters, dictate child support and child custody, encourage divorce, or waive one party’s right to alimony. These restrictions are defined by state laws, and should be reviewed only in light of the latest revision of the laws. Further, all provisions of a prenuptial agreement are subject to approval by a Family Court Judge.

Why Are the Agreements So Popular Among Millennials?

Most observers believe that the confluence of several trends and factors explain the great popularity of prenups with the millennial generation. Millennials are not pessimistic about marriage. Rather, they are realistic in protecting Prenuptial agreements popular with millennials - Altizer Law PCthemselves.

First, many people of this generation are children of divorced parents. There is thus a realistic awareness that their marriage may be one of the 51 percent that fail. Some of these individuals might have been exposed to anger and arguments when their parents worked out their division of property.

Second, millennials tend to be older when they marry. Instead of marrying in their 20s and 30s, they delay marriage until their 30s and 40s. Many make the choice to wait in order to establish themselves in a career and to accumulate some personal assets. Thus, people of this generation enter marriage with property and with assets that may increase in value during the span of a marriage.

Third, millennials are completing their education with a staggering amount of debt in many cases. Their realism extends to protecting themselves from the student loan debts of the spouse. In the same vein, they are also protecting themselves from a spouse’s business or other losses and debts.

Fourth, financial advisors are quick to point out that many members of this generation will receive a substantial inheritance. Because the inheritance will be received after the marriage began, it could be considered property of the marriage. A prenup can define that inheritance as a personal asset.

Finally, a new factor closely tied to the digital age, they are protecting the outcome of their current ideas and their future ideas. Today, we see small businesses thrive and grow overnight due to an idea that changes the way people do something.

Prenuptial agreements are popular with Millennials. These agreements can be a critical piece of the puzzle of protecting one’s financial future. Today, one should not conclude that prenups are only for the rich.

Call Altizer Law, P.C.

If you are planning to marry, you may want to consider drafting a prenuptial agreement. Once you and your future spouse have discussed the option and decided to create an agreement, you will both want to be represented by separate counsel. If a prenup is in your future, I am happy to sit down with you and discuss Virginia laws covering the agreements, and help you protect your future.