Deciding before the “I do’s” how they are going to handle their combined assets is become a more popular approach for Americans. A prenuptial agreement can prevent hassles down the road and ease out the bumps that often cause trouble, experts say.
For instance: One of the partners is a very careful budgeter and keeps close track of her assets. Her fiancé tends to be looser in his money management and doesn’t shy from a few risks. An agreement in writing may help the couple find middle ground they both can live with. If, unfortunately, the marriage doesn’t work (half of them don’t) there is more solid ground for settling things.
One couple agreed to separate her retirement savings from his business funds. She had the peace of mind that her retirement would be more secure. He was on notice that he needed to remain within his means as he undertook new ventures.
Millennials tend to put off marriage until later in life than did their parents. They are more likely to have established careers, businesses and property. They can be protective of these assets. They are more open to a prenuptial agreement. Old perceptions that such an agreement is unromantic or selfish or that it indicates a lack of trust are being set aside in favor of a practical approach.
Back in 1975, about 43 percent of women were stay-at-home mothers and housekeepers. In 2016, that figure was 14 percent. The majority of women now have assets of their own when they are ready to marry. They are not as dependent on a husband for their living.
Prenuptial agreements have gained popularity for all these reasons. The increase of divorces in America also is a factor, according to the American Academy of Matrimonial Lawyers. An academy survey said that 62 percent of the lawyer members had seen an increase in the number of couples seeking prenups in the past few years, especially among those in the Millennial age span.
The pre-marriage agreements have also changed, the academy found. Initially, they were seen as a way to protect one of the partners if he or she had more assets or appeared likely to benefit from inheritances.
Now, they focus on such things as property and dividing debt, particularly student loan debt. The agreement can forestall sticky situations in the future. One man, for instance, wanted to assure his parents, who were likely to bequeath him a considerable amount of money from their business, that his inheritance would stay in the family should his planned marriage fail.
For some couples, such an arrangement is “the first step to a divorce.” But for some couples, pre-existing situations make a prenuptial understanding a good idea — for instance, when there are children from a previous marriage.
Some couples bypass the prenuptial agreement, but make legal arrangements after their marriage to address issues that could become stumbling blocks.
The experts defend pre-marriage agreements on the basis that “marriage is a financial decision and divorce is a financial decision” and the best approach is to keep them upfront.