Prenuptial agreement. This practice is most commonly associated with the super-rich. After all, they have a lot to lose (and gain) should their marriage disintegrate and end in divorce.
Prenuptial agreements are becoming common practice among more couples as they enter into marriage. But what is causing this growing trend?
One thought is that as the age that couples are getting married continues to increase, the rate of prenuptial agreements is on the rise.
“Couples are getting married at later ages these days and are consequently entering their relationships with more to protect in the event of a divorce,” said Joslin Davis, president of the American Academy of Matrimonial Lawyers. “A prenuptial agreement often represents the most effective way to address these concerns and safeguard individual assets before exchanging vows.”
Davis says that members of the millennial generation are using prenups to cover separate property holdings, business interests, anticipated family inheritances and potential alimony claims.
Getting married in your 30s might mean you’ve already accrued a decent-sized amount of savings and have contributed heavily to your 401k. And with women earning more and making up a larger part of the work force than they did in say, the 1980s, there is more impetus to protect those assets.
Second marriages might also account for a rise in prenups. When heading into another marriage after having already been financially burned by the first, some make the decision to avoid a repeat of the financial pain they’ve endured the first time around, but also to protect any assets they have set aside for their children.
With divorce a common practice among the parents of millennials, this generation is seeing prenuptial agreements as a matter of practicality. According to the Pew Research Center, only about six in 10 members of the millennial generation (62%) were raised by both parents. So a prenup just makes sense.
And because Texas is a community property state, there is an incredibly likely chance that without a prenup, your assets, regardless of how much you contributed during the course of the marriage, will be split right down the middle – 50/50.