Prenuptial agreements used to have quite a negative reputation. If you asked your partner to sign a prenuptial agreement, it was typically viewed as a sign of distrust and that your marriage was doomed to fail.
This attitude has changed in recent years, particularly among millennials and younger generations. Prenuptial agreements are now viewed as a smart and practical financial strategy among many millennials.
Why prenuptial agreements have become popular
There are various factors that contribute to the increase in popularity of prenuptial agreements. Millennials generally recognize the importance of long-term financial security.
Although it is common to start out in a marriage with little to no assets, this situation is likely to change throughout the years.
Real estate, income and retirement accounts often grow throughout the course of marriage. A prenuptial agreement protects these assets.
Compared to previous generations, millennials tend to carry more debt, in the form of student loans or credit card debt. They are often worried that they will be responsible for their spouse’s debt if they divorce. A prenuptial agreement can prevent one spouse from having to take on the debt of another.
As with prenuptial agreements, divorce is more common than in previous years and no longer holds the same stigma it once had. Millennials entering second marriages have experience with the complexities of dividing marital assets and debts in a divorce and may want a prenuptial agreement to avoid that again in the future.
Although prenuptial agreements are becoming more popular, you might not be sure if one is right for you. There are pros and cons to a prenuptial agreement to consider before deciding.
Benefits to a prenuptial agreement
Money problems are among the most commonly cited reasons for divorce and financial problems often cause strain on a marriage. A prenuptial agreement forces you and your spouse to discuss finances and learn how each of you manage money.
Additionally, a prenuptial agreement allows you and your spouse to make decisions about your finances instead of a court or judge. This often means an overall cost savings if you divorce.
A prenuptial agreement is also a good idea if you have valuable assets that you want to protect, such as family heirlooms.
Overall, a pre-nuptial agreement can help you and your partner communicate about finances and understand each other’s financial goals and attitudes towards money.
Drawbacks to a prenuptial agreement
However, a prenuptial agreement does have some disadvantages. Talking about a prenuptial agreement is not romantic and can lead to feelings of distrust or resentment. You might learn that your partner has a very different attitude about finances than you do and this could impact your relationship.
Once a prenuptial agreement is executed, it can be challenging to revoke or modify it. A modification is possible if your financial circumstances change and/or you and your spouse agree to it, but it is not always easy.
In many cases, the partner who suggests a prenuptial agreement is the one who has more assets or is in a better financial position and therefore has more to lose. Although Florida law states that you cannot be coerced into signing a prenuptial agreement, a prenuptial agreement can create a power imbalance in your marriage.
Whether a prenuptial agreement is best for you depends on your situation. It is a decision that should be made only after giving it careful thought.