MORE MILLENNIALS SEEK PRENUPS!!
It’s that time of year again when many couples will be walking down the aisle. To have or not to have a prenuptial agreement is not the most romantic conversation to have as you are tasting wedding cake fillings and toppings and wondering if you should get the butter cream or not. But believe it or not more and more millennial couples are considering prenuptial agreements. Why?
This generation, more than others, has a lot more to protect. Many millenials have family money, as well as their own money and sometimes have started their own businesses. Start-up businesses are popular among this generation. These businesses have often been funded by family, or their own savings, and although the business may not have a lot of value in the beginning that could change. Significant growth could take place during the marriage. That growth in the business is considered marital property. Many millenials believe their entire business should be protected in the event of a divorce, unless an agreement says otherwise.
Here are my top ten reasons for having a prenuptial agreement:
1It Can Strengthen the Relationship
In order for prenuptial agreements to work, you both have to be completely transparent with one another about your existing financial matters. This means fully disclosing your assets and your debts to one another. Get the difficult conversations out of the way as soon as possible. Trust us, the best time to talk about that maxed out credit card is not after the honeymoon.
2 Avoiding Discussions About Financial Matters is a Start on the Wrong Foot
Almost a third of divorces are the result of financial problems. We know you’ve heard this one before, so why not address this in advance? The more communicative you are in planning your future together; the more likely that future will be “till death do us part.” Part of your prenup discussion may include discussions about marital roles and obligations of each partner. There is nothing unromantic about smart planning. If a future spouse is secretive or not forthcoming, beware.
3 You Acquired Property Before your Current Relationship
One of the things we have found is that many couples interested in a prenuptial agreement typically have acquired property prior to starting a relationship with their current partner. This is particularly true with people getting married a second time. Oftentimes, a couple may want to keep some of their property separate, especially if they have children from a previous relationship. The idea here is that couples would like to see their separate property, or even just a certain percentage of it, used for the benefit of their children in the event of death or divorce.
4 Divorce is Very Expensive
Divorces are quite pricey and while we know that nothing can be further from your mind, the reality is that about 50% of marriages in the U.S. end up this way. Think of your prenuptial agreement as something of an “insurance policy” that will save you both a lot of pain and money by predetermining who gets what at a time when you are not angry at one other.
5 Assurance for Your Children
Second and third marriages are increasingly a common occurrence in the United States. In some cases, children may feel their new step-parent will not honor the same inheritance wishes as their biological parent. A prenuptial agreement sets clear guidelines regarding what a new spouse is entitled to, while ensuring your children’s peace of mind that they will be taken care of.
6 Financial Independence
You’re single, you work hard, and you’re probably used to managing your finances. However, during the course of a marriage, you are likely to share certain financial responsibilities together. If maintaining a certain level of financial independence is important to you, a prenup can help set those parameters for you. One way to do that is to outline your obligations to each other and define where the lines are in terms of maintaining your own earnings or savings.
7 Protection from Creditors
Maybe your partner attempts a business that ultimately fails, or maybe your partner brings a lot of debt to the relationship. Things happen, and we get that. A prenuptial agreement can often protect your finances from creditors. This allows one partner to step up and help maintain your relationship while the other bounces back.
8 Planning your Life in Advance
There is nothing wrong with that. By outlining specifics about your future together, a prenuptial agreement gives you a roadmap to keep you both on track. It makes you think things through. It also brings the tough decisions to the forefront of your relationship to make sure they don’t trip you both up later.
9 Keeping a Business on Track
Do you have a business partner or some other significant business interest? A prenuptial agreement can help keep that business intact in the event of an untimely death (also consider any business agreements). That does not mean that your spouse cannot or should not benefit from your hard work, but your agreement will help clarify issues surrounding ownership of the business.
10 Spousal support
You could end up living a long time but only be married for a number of years. Should that relationship end in divorce, you could be on the hook for a lifetime of support even if your relationship did not last as long. An agreement could alleviate this and mitigate these obligations.
If you or someone you know is about to walk down the aisle consider a prenuptial agreement and please feel free to call me at 212.734.1551.
Warm regards,
Lois