Prenups Aren’t Just For The Filthy Rich Anymore

Millennial couples are signing prenuptial agreements far more frequently. But what accounts for the spike isn't what you think.

by Graham Techler
A man and woman at their wedding signing a prenup with doodles of the dollar sign all around them

It’s a dirty word before the wedding and a punchline after the divorce, but prenups are on the rise. Sixty-two percent of attorneys in a recent survey noted an increasing in the total number of their clients seeking prenuptial agreements — contracts stating that the state can’t decide how their assets are divided in the event of a divorce — in the last three years alone, according to the American Academy of Matrimonial Lawyers. It’s a sudden increase, but it’s also a bit of a surprising one, given that our causal understanding of what a prenup is and what it means for a marriage have been clouded in messy stereotypes about money and distrust. People seemingly haven’t been talking about prenups — either with their partners or anyone else — any more than they were before. So, particularly in this day and age, when people are getting married less and less while also making less and less money, what would be the point? Here’s what’s going down with the prenup.

So, What Exactly Is A Prenup?

The first step in understanding the prenup’s surprising rebound is understanding what it is the first place. The reason prenup feels like a vague term is because it kind of is. Broadly, a prenuptial agreement is simply any contract that people agree to before they get married, but which only goes into effect the moment they exchange vows. However, practically, the history of the prenup has narrowed its function down to one area of marriage that we generally don’t like to think about when we’re trying to think about love and commitment: money.

“A prenuptial agreement allows the soon to be spouses to opt out of their state’s laws pertaining to division of assets and debts, as well as alimony, to define how those issues will be resolved in the event of a divorce,” says Chris Hildebrand, of Hildebrand Law. For example, Hildebrand says, income and assets earned and debts incurred during a marriage would normally be divided between the spouses in a divorce. “This can be avoided with a prenuptial agreement if everyone agree all income earned, and debts incurred, as well as all assets accumulated by either spouse, will be treated as that spouse’s sole and separate property in the event of a divorce,” he says.

The money matters are obviously the major reason why even discussing prenups is extremely uncomfortable for everyone involved. They’re also why the people who have traditionally gotten prenups over the last few decades have been those with a substantial amount of money who are heading into another marriage after their first. “Once bitten, twice shy,” says Adam Scavone, of Scavone Law Firm. “They’ve been through the process, and they’re scarred from it. They have made the decision that it is better to have this tough discussion up front, so that they can avoid that pain down the road.”

Especially for those with children from a previous marriage for whom they intend to provide, a prenup can be the only way to set aside money for those children separately — since all income earned during the marriage is legally the property of both spouses.

As this is the dominant narrative surrounding the prenup, it’s not wrong to be nervous about the conversation. For anyone considering it, Scavone recommends getting it done as far in advance of the wedding as one can, so they’re not thinking about it at all when the big day comes. “I tell my clients to sign them, each save a copy, put it in a safe deposit box at the bank, and forget about them, hopefully forever,” says Scavone. “They’ll always remember them if and when they need them.”

So, Why Are Prenups on the Rise?

There’s one very simple reason why millennials are getting prenups at such an increased rate despite marrying later and making less, and it all stems from the ur-problem that seems to haunt every facet of a millennial’s life: student loans and credit card debt. “Unlike the prior generation who were getting married in their early twenties and lacked any significant debts or assets when they married,” says Hildebrand, “millennials have increased their earning capacities, assets, and sometimes debts well prior to marriage.”

In some sense, then, the course-correction of leading generally more solitary lives as a financial antidote has worked, but with a cost. Since most marrying millennials are waiting to get hitched until they can accumulate some assets and feel steady on their feet, the fear of losing those hard-won assets doubles. Says Hildebrand: “The idea that they could be hit in a divorce with a large amount of their spouse’s debt is too big a risk.”

Another stealth bit of reasoning behind the increase could also be tied to another relationship millennials have to their money: their parents. “With what appears to be a greater level of financial support from parents, whether it be with millennials moving back home after college at a higher rate than in the past, or gifting or loaning money to acquire substantial assets… the decision to enter into a prenup may also be guided and pressured by parents looking to protect their children and their financial giving,” ” says Robert Epstein, partner at the law firm Fox Rothschild,

In either case, with crushing debt becoming a prerequisite for adult life, a prenup could naturally be seen by millennials and their parents as an ounce of prevention that’s worth much more than a pound of cure.

What Other Factors Might Account For the Rise in Prenups?

The factors at play in the rise of the prenup amongst millennials may not be purely financial. Shifting gender norms, for one, says Lisa Zeiderman, of the law firm Miller, Zeiderman, and Wiederkehr. “Unlike in previous generations when women played a more traditional role in the home, nowadays there are typically two working people in a household both of whom want to protect and plan for their financial future,” she notes.

Other social norms play into it as well, with our collective views on marriage itself updating rapidly. “Younger people focus more now on individual experiences and ‘living their lives’ for as long as possible before settling down,” says Epstein.

However, a larger shift in our perception of divorce plays a part as well. Millennials had front row seats to a lot of divorce, both at home and in public, and it clearly left an impression.

“The rise of the bitter, celebrity divorce battle played out for entertainment in gossip columns has done much to make younger generations aware of the potential pitfalls of casually leaping into marriage,” says Zeiderman. “Add to this a culture shift generationally away from notions of blind romance and towards being financially informed and protected, and the rise in couples seeking to safeguard themselves in the event of divorce is not so surprising.”

Divorce, it seems, has sunk into the psyches of many individuals as something to anticipate and prepare for. As challenging as it might be to our notions of what to expect from millennials, the prenup appears to be a natural extension of that instinct.