Is a Pre-Nup Right for Me? The Pre-Nup Boom (Part 3 of 3)

This is the 3rd and final installation in a 3-part series about the most common reasons for a prenuptial agreement (“prenup”).

In March, we wrote about the most traditional scenario in which prenups might be requested: where there is a vast disparity in wealth between future spouses.

In April, we wrote about second or subsequent marriages, and why couples might be more inclined to seek a prenup under these circumstances, either because of a prior bad experience with divorce or a desire to protect the inheritance of children from a prior relationship—or both.

This month, we talk about the growing popularity of prenups amongst those entering into their first marriages, with equivalent income potential or assets.

Prenups and Millennials

Simply put, prenups have become more popular among millennials.

Trends demonstrate millennials marrying later in life, more established in their careers, and more self-supporting before they marry. Millennials are also more likely to be realistic about the likelihood of their marriage’s success when compared to prior generations which often idealized the concept of marriage.

Millennials are often more comfortable with their ability to be self-supporting and less likely to expect to depend on their partner for financial support in the event of divorce. Millennials are less likely to attach a stigma to a prenup, seeing a prenup instead as a means to enter into a marriage with clear obligations to one another.  Millennials fear a lengthy and acrimonious divorce more than they fear financial dependence.  Hence, the prenup removes any question of how income and assets would be divided in the event of divorce and eliminates the prospect of protracted litigation over the division of marital property.

Prenups Can Preempt Protracted Divorce Litigation

As effective as a prenup may be at establishing clear expectations for the division of marital property, prenups by law cannot include two other issues which may arise in divorce—child custody and child support.

However, even where there is no income disparity and modest financial reason for a prenup, future spouses can use a prenup to require alternative dispute resolution in lieu of litigation should the marriage end and child support and custody must be adjudicated.

For example, parties to a prenup may require participation in a certain number of sessions of mediation before being eligible to apply to a Court for resolution of a custody dispute (absent emergency circumstances of course). Parties to a prenup may agree to an annual exchange of income information in the event of a separation.  This would avoid a costly dispute, service of a subpoena, and forced production of financial information necessary to calculate child support.  Parties to a prenup can even agree on how to allocate attorneys’ fees in the event divorce or custody litigation is ultimately pursued.

Prenups Are Generally Enforced by Courts but Be Mindful of these Traps

Prenups can have tremendous value but they can be a tremendous waste of resources if not prepared correctly.  The prenup that is not prepared correctly may not be enforced by a court.

To ensure that the exercise of negotiating a prenup is not done in vain, we recommend:

1. Full financial disclosure by both parties before the signing of any prenup;
2. Both parties engage separate and independent counsel to provide representation (even if the same spouse pays for both parties’ counsel);
3. There must be sufficient time between the signing of a prenup and the wedding date so that neither party can argue they were under duress or coerced into signing the prenup.

If you are interested in exploring how a prenuptial agreement might benefit you or have been presented with a draft prenuptial agreement by your fiancé, contact Bulman Dunie or attorney Meg Rosan at mrosan@bulmandunie.com to discuss creative ways to negotiate fair terms.