Marriage is one of the most significant legal commitments you can make. As unmarried life partnerships and divorces grow more common, Millennial and Gen Z couples’ attitudes towards marriage have changed. While these couples still treat their wedding day as a romantic occasion, they also acknowledge that marriage is, at its core, a legal contract. That may be why prenuptial agreements are on the rise in younger generations.
According to polls by Harris Interactive, prenuptial contracts have increased by 500% in the past 15 years. They have risen from 3% to 15% of all married and engaged couples. The majority of this increase occurred in the 18-34 demographic, which includes Millennials and Gen Z adults. 40% of all engaged and married partners in this age group signed prenuptial contracts. That’s significantly higher than older generations, who are unlikely to have one of these agreements unless they remarry.
It’s clear that younger couples have decided prenuptial agreements are worthwhile, which should be no surprise. These contracts offer a wide array of benefits for future spouses of all ages. Some of the most valuable features of prenups for young adults include:
Financial Awareness and Disclosures
Financial disagreements are one of the most common reasons for divorce in the US. A good prenuptial agreement can help couples minimize or avoid these arguments by ensuring both parties go into the marriage with their eyes open.
When developing a premarital contract under the guidance of an experienced attorney, you and your spouse will spend a lot of time discussing your finances. You will need to provide full financial disclosure to your fiancé to ensure that your contract is legally binding, and you will receive the same from them. In addition, you will need to talk about details like whether either of you is interested in starting new business ventures in the future, how you feel about purchasing real estate, and how you want to prepare for retirement.
All of this information is invaluable for a successful marriage. By discussing these details in advance, you’ll better understand your future spouse’s attitudes toward spending and investing. You’ll have the chance to identify potential conflicts and set ground rules in advance. This can help you avoid unnecessary arguments about money once you are married.
Organizing Trusts and Inheritances
Trusts and inheritances are increasingly common in Florida and around the country. These assets are invaluable because they allow young adults to achieve financial security with significantly less stress or uncertainty. They also enable families to protect beloved assets like a family home, business, or heirloom from getting lost or sold.
If you or your spouse is the beneficiary of a trust or the heir to an inheritance, you can use your prenuptial agreement to address how the asset will be handled in your marriage. For example, inheritances typically remain separate property unless the recipient chooses to commingle them with their marital assets. In your premarital contract, you can state that all inheritances will be treated as community property or will always remain separate, even if they would otherwise be considered commingled. Similarly, you can use your contract to name trust payments as separate or community property.
Naming trust funds and inheritances as separate property can also reassure the people passing these assets on. The contract ensures that the assets your loved ones have worked so hard to maintain will remain in the family no matter what happens in the future.
Insulation From Debt
If your partner has significant debt, a prenuptial agreement can insulate you from it. Without one of these contracts, your spouse’s debt becomes in part your responsibility. Community property is vulnerable to liens or other methods of debt collection. This includes any assets you acquire after you get married and growth in value of assets you brought into the marriage
Your prenuptial contract allows you to protect your assets from this debt. You can name your spouse’s debt as their separate property and name investments, businesses, or other assets as your separate property. If collections become a concern, the separate assets will be safe.
One of the most overlooked benefits of writing a premarital contract is how it can strengthen your relationship. Communication is the foundation of strong marriages, but many couples get married without having discussed financial expectations and future plans. Without that basic understanding of each other, these spouses can run into significant marital problems later in life.
The process of developing your prenuptial agreement can help you avoid these problems. Beyond basic financial disclosures, prenuptial contracts provide a launching point for many critical conversations, including:
- Whether either of you will stop working after you get married
- What you want to accomplish with your careers
- If you want children and when
- Where you want to live
- How you plan to prepare for retirement
- How you plan to spend money on a weekly and yearly basis
If you address these items months before your wedding, you ensure your expectations for the future align. This prevents miscommunications, disappointments, and disputes that may stress your relationship after you are married.
Prepare Your Prenuptial Agreement With Expert Legal Counsel
Prenuptial agreements require careful preparation, consideration, and negotiation to be legally binding and satisfying to both spouses. If you are considering a prenuptial agreement, working with an experienced, knowledgeable attorney is in your best interest. At Bergman Family Law, your family is our top priority. We are dedicated to providing compassionate and efficient solutions to family law considerations such as prenuptial contracts. We will work with you and your partner to help you develop an agreement that suits your relationship and needs. Schedule your consultation today to learn more about how we will support you during the development of your contract.