Why you’re more likely to have a prenup than your parents were
It doesn’t have the same stigma anymore
Adapted from a story by The Washington Post’s Jonnelle Marte.
Amanda Farris works in accounting and likes to “play things safe” when it comes to her savings and investments.
Her boyfriend, Andy Salmons, owns a coffee shop and is a serial entrepreneur not afraid to take risks.
The two have been together for nearly four years and are talking about marriage. But before they vow to stay together for better or worse, they’ve agreed to come up with a plan for how they would protect their finances on the — slim, they hope — chance that their relationship should head south.
“It’s important for us to keep things separate,” Salmons, 32, said.
They want to to separate Farris’ retirement savings from Salmons’s business and the debt he took on to launch that and other ventures.
“I don’t ever want my decisions to put her in jeopardy,” he said.
As more millennials put off marriage until later in life, they are more likely to have careers, businesses and property. And that, financial advisers say, has made them more protective of what they have built.
As a result, the prenuptial agreement is starting to lose its taboo.
Why some people didn’t and still don’t like prenups
For generations, the agreements have proven a sticking point for couples who deemed them unromantic. In some relationships, the contracts can signal a lack of trust or suggest that one person is foreseeing an end to the union.
Changing attitudes about marriage
Over time, the equation for when and why two people should marry has changed.
- Millennials are also less inclined to get married while they’re young and broke.
- More than half of people in their 20s and 30s say it is important for them to be financially secure before they get married, according to a 2015 survey by Allstate and the National Journal. (That increases the chance that when two people tie the knot, each will have a career or business that they want to protect, financial advisers say.)
“Kids today are saying, ‘How do I protect my ideas?’ ” said John Voltaggio, a wealth manager at financial firm Northern Trust who has noticed an increase in the number of young couples interested in prenups. “They’re not shy about talking to their fiances about it.”
A modern concept
It was only within the past 25 years or so that prenuptial agreements became widely accepted in most states, coinciding with the rise of divorce, said John Slowiaczek, president of the American Academy of Matrimonial Lawyers.
The evolution of prenups
In the ’70s, when couples generally married younger, prenuptial agreements were mainly used for estate-planning purposes, Slowiaczek said. And more commonly, those were situations where one partner had significantly more wealth or stood to inherit money.
Nowadays, as young people have become more likely to delay marriage until they are more financially secure, prenups also have become a way for partners to protect their assets and future income.
- They’re also emerging as a tool for dividing debt loads.
- They want to make sure any assets that parents pass along to their children would stay in the family in the event of a divorce.
Some couples are turning to legal agreements after getting married to lay out how they would divide any property, savings and debt accumulated after tying the knot.
