Millenials Are Different, And So Are Their Prenuptial Agreements 

millennial prenups

Before Millenials walk down the aisle to say “I do,” many in this age 23-38 generation are making a detour to their lawyer’s office to first say, “I want a prenup.” 

A prenuptial agreement is a legally binding document that lays out certain parameters and financial terms should a marriage end in divorce. Traditionally, prenups have been used to clarify separate property each spouse will bring in to the marriage (and thus keep in divorce), and outline terms for alimony. 

But Millenials are different from previous generations, including their Boomer generation parents. More Millenials want prenups — interest in pre-marriage agreements are 50-60% higher among Millenials compared to Boomers and Gen-Xers. [Read more: 5 Reasons Why Millennials Are Saying Yes to a Prenup Before They Say ‘I Do’]

The terms they are choosing for their prenups are very different too, reflecting the Millenial generations’ changing values and circumstances.

What are some Millenial musts for prenups?

Prenup Must: Debt as separate property. 

Finally putting to rest the lingering misconception that prenups are only for the ultra-wealthy, the number one on many Millennials’ minds as they consider a prenup is what to do about premarital debt. 

The average Millenial carries a debt of $27,900, including exorbitant student loans to pay back and credit card debt. A prenup can clarify debt as separate, if so desired, meaning that should a divorce take place, debt won’t be part of marital asset/debt division and remain the responsibility of the spouse who racked it up. For example, if you owe 20K in student loans upon marrying, and divorce 10 years later when your loan balance is at 5K, that 5K is yours alone and will not be addressed in your divorce. Similarly, if your spouse went to medical school and has a soaring student loan burden of over 200K (average for medical school), a prenup can clarify that it is not a joint debt.

The prenuptial agreement process requires full financial disclosures from both spouses-to-be. This level of transparency can help parties become aware of the extent of debt each has, leading to further negotiation points. For example, prenups can include plans for how to manage debt (i.e., specifying a certain percent of marital income can go towards satisfying personal debts) and/or specify whether certain debts taken on during the marriage should be considered a joint or separate burden.  

Prenup Term: Planning for Income Changes 

Millenials are marrying later in life then previous generations and many enter marriage at an advanced place in their careers. It’s tempting to think, “we both make good money, so we’ll be okay if we get divorced…we’ll just go our separate ways and no alimony will be needed.” 

This could be the case, but prenuptial agreements are all about creating more financial security — for both of you — and this requires careful thinking about possible changes in circumstances. 

If you are planning on having children, will one of you reduce your work hours, change jobs to accommodate your kids’ schedule, or step back from your career altogether to care for your kids full-time? What if one of you gets sick? This may put one of you in the situation where, if you were to divorce, you would need some form of alimony. A prenuptial agreement can lay out the exact terms you want and leave nothing up to chance. 

Prenup Term: Larger Assets 

Marrying later in life can mean that some Millenials enter marriage already owning a house, a stock portfolio, and a healthy retirement savings account. A prenup can include language specifying these items as separate, or lay out mutually agreed upon terms for them, i.e., changing the house to a marital asset if your marriage lasts for longer than 10 years. This could be an important bargaining point for other terms. 

Prenup Term: Social Media

In a very modern twist on prenuptial agreements, more Millennials are choosing to include a social media prenup clause, in which the couple agrees what each can and can’t say about other on Instagram, Twitter, Facebook and other social media channels during their marriage. This can include negative posts that could affect reputation, disclosure of information deemed private (i.e., no sharing about infertility or money troubles), or photos of children.

Prenup Term: Pet-Nups

Your pooch is your best pal, but after marriage, could your spouse claim ownership? Since pets for some couples are as dear as children, there’s no surprise here that outlining pet ownership in prenup is becoming more and more common. The “pet-nup” can also have spouses pre-agree on who pays for vet bills and who manages the pet’s care and feeding.

Prenup Term: Frozen Embryos 

Planing to use IVF or surrogacy to start your family? One important aspect of your planning should be thinking carefully about what happens to unused frozen embryos should you divorce. The law on this is still gray, so Millenials are taking assisted reproductive technology into their own hands by adding prenuptial agreement terms that lay out a post-divorce plan. For what to consider, read: Frozen Embryos: What Happens In A Divorce?

In New Jersey, the law requires that each party to a prenuptial agreement retains their own legal counsel review the document at the time it’s created and signed in order for the agreement to be considered valid and enforceable upon divorce.

For Millenial prenups, this means that if you think drawing up an agreement on the back of a napkin and snapping photos of it with your phones is going to create a binding legal document — it’s not. Get in to see an attorney to learn your options for creating a document that’s meant to last.

Tip: If discussing these types of matters doesn’t strike you as feeling very romantic, keep in mind that planning for a stable financial future is one of the keys to a long and happy union. Having these kinds of planks in place can help you both relax and feel greater peace of mind.

A good prenuptial agreement is one that protects and benefits both spouses in the long run.

What’s going in your prenup?

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