Prenups have always clarified money matters, but it’s often overlooked that they can do more than that. Millennials are using prenuptial agreements to plan various aspects of their marriage including social media and even pets. They’re doing so as a result of directly addressing realities that are relevant to their era that wasn’t around before.
Historically, prenups have been pigeonholed as tools that the rich and famous used to protect their finances in the event of divorce. Despite this and other debunked myths, younger generations have embraced prenuptial agreements as a foundational marriage planning tool, not just a divorce planning tool.
Splitting Finances From the Start
In California, married couples automatically split money and income earned after tying the knot. Some millennials are forgoing this default commitment by creating their own rules around financial co-mingling. More than ever, they’re approaching marriage as a business relationship, where finances and assets are kept separate, but certain joint financial obligations are shared through a joint account. As a result, when a marriage ends unexpectedly, each partner walks away cleanly, fiscally speaking.
Many millennials are getting married at a later age as well. This means that they’ve had their own separate relationship with money, and have experienced financial autonomy in a way that may make combining finances difficult. They’re also more informed than previous generations who married straight out of high school or college. In cases where both partners earned a solid living, it could be in both of their best interests to keep finances separate. This way, if one partner loses a job, the prenup could clearly define how the relationship changes to support the new financial picture and avoid causing friction.
Another consideration is millennials’ heavy involvement in the booming tech space and stock markets. Millennials are not only building intellectual property at a fervorous pace, they’re investing heavily, too. For example, 20 and 30 somethings are creating phone apps and cultivating their influencer Instagram accounts, all while trading stocks and options for free on Robinhood. Thus, couples are talking about what happens if a software takes off and one partner is seeing a sudden skyrocket in their wealth. A prenup clearly reviews these modern scenarios before they become modern problems.
Tackling Debt As A Married Couple
From large student loans to credit card balances, millennials also struggle with debt coming into marriages. They’re using prenups to decide how to allocate resources from the marriage to alleviate financial stress. For example, they may agree to use a percentage of their married income to pay down the debt as opposed to loosely and randomly making payments from joint bank accounts.
Keep in mind that if one partner plans to incur student debt after getting married, the debt effectively belongs to both parties (in California and other community property states). Instead, the prenuptial agreement could define this new debt as personal debt. This alleviates the non-borrowing partner from absorbing this debt after a divorce.
By having these straightforward conversations about money, millennials are approaching marriage as a financial engagement, not just a romantic one. This enables them to practice communication before getting married, enabling them to hit the ground running with conflicts that may arise down the line. It’s no wonder that millennials drove down the divorce rate in the last decade.
BEFORE getting married, what conversations about MONEY should you have with your partner?
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Who Keeps the Pet?
Dogs, cats, and other pets have become a modern obsession. It’s commonplace for millennials to bring a pet into a marriage, which can be a sensitive subject when a relationship is on the verge of breakup.
On one hand, there is the issue of love. Especially for couples who lived together prior to getting married, both partners may have fallen for their fur babies. They depend on their pets for unconditional affection, regardless of who was the original owner. In this case, millennials are repurposing prenups to establish a pet visitation schedule to ensure fair measures in maintaining a relationship.
On the other hand, pets also incur costs. Vet bills, insurance premiums, food costs, and even luxury items contribute to a financial reality that needs to be addressed sooner than later. Millennials are writing these conditions into their prenups to outline who pays for what in the case of divorce.
Between custody and visitation, millennials are taking their pets as seriously as their human children.
The Omnipresence of Mobile Phones
It’s no secret that phones are a necessity to modern living. Millennials, however, have taken it a step further in the sheer volume of sharing on social media and DMs. This brings up the reality of how to address privacy concerns in a marriage. Before marriage, and especially when single, most millennials need not worry about violating another person’s privacy except in extreme cases. Once entering a marriage though, it’s an important discussion that they’re having.
For example, if a wife shares a photo of her and her husband in a pool on Instagram, and the husband never approved of publicizing the photo, issues could arise. To solve this problem, millennials are writing in rules about how and when images, videos, or other media are allowed to be shared.
Things could also get ugly in a divorce. Millennials are placing provisions to prevent damaging actions from social media battery up front with a clause in a prenuptial agreement. For example, one partner may start to share unflattering photos of their ex to get revenge. Even without photos, they can tweet or write a Facebook post disparaging their former partner’s public image. Having these relevant talks before getting married may seem awkward, but it’s a reality that millennials are addressing head on to avoid even worse situations down the road.
Where Prenups Go From Here
The future of prenups is to use them as both the financial and social rules for marriage. It’s encouraging to see millennials use prenups to clearly define how to succeed in a marriage, not just what happens in a divorce. With this mindset, prenuptial agreements become a tool, rather than an obligation.
If you plan on getting married, we encourage you to identify what’s important in your life and write down what goals you have for the future. As millennials have done, examine the societal realities that affect you the most. Be as detailed as possible and discuss them with your soon-to-be spouse. This is a great starting point for you to determine what to put in a prenup and what’s not necessary. Money talks are vital, so use this prenup guide to help walk you through these conversations. If you need guidance through this process with a legal professional, don’t hesitate to reach out to us as we love helping people through these sensitive yet empowering moments in their lives.