Prenups actually get more important as you get older.
Picture the scene: The love of your life has just agreed to marry you. You’re ecstatic, brimming with the romance and excitement of the situation. Trembling, you go in with a follow-up question:
“So, darling, shall we have a prenup?”
OK, so you should probably wait at least a few days to ask that question, but you’re not wrong for asking it. The reality is, more and more people are considering prenups ahead of their nuptials — and that’s probably very sensible.
With the help of divorce attorney Peter Stambleck and Pattie Ehsaei, a lawyer and manager in financial services, we’ve taken a look at why prenups are a wise safeguard for many couples, why they might be particularly useful to people getting married at a later stage of life, and cleared up a few misunderstandings as to what they can actually include.
What is the purpose, and benefit, of a prenup?
While there’s no expert consensus saying that all couples need a prenup, they can certainly come in handy for many people, particularly because of their flexibility. “A prenuptial agreement can be specifically tailored to each situation,” says Stambleck. “This predetermines how certain financial issues, like spousal support, distribution of property, and inheritance rights will be handled in light of the pending marriage”
It’s important to note that if you don’t sign a prenup before you get married, depending on your state’s laws, you’ll be bound to certain terms around what should happen in case of divorce anyway. These may or may not be appropriate to your situation, so you may as well iron out what works best for you and your partner yourselves, rather than let the state decide. Prenups help to ensure that both parties are entering into the marriage with clear eyes and are able to protect themselves from vulnerabilities in each others’ finances.
“It puts everything on the table as to the assets of each spouse and there will be no secrets,” explains Ehsaei. “If you have an existing business, a prenup can protect that asset from being split after a divorce. If you have children, it allows you to designate certain assets to them and will not allow your future spouse rights over that property.”
As well as ring-fencing assets, prenups can allow spouses to protect themselves from the responsibility of paying their partner’s debt in case of disaster. They’re not entirely watertight safeguards, but they can certainly help to clarify your position.
Why more millenials are getting prenups
The trend toward protecting individual assets is being driven by millennials — whose divorce rate is declining, even as divorce among boomers is on the rise. Unlike many of their parents and grandparents, millennials tend to have been saddled with a lot of debt since early adulthood, so becoming financially stable is a priority, as is safeguarding their success.
“Millennials are getting married a bit later in life,” explains Stambleck. “With that comes experience in the workforce and the accumulation of assets pre-marriage. In these particular situations, most of the prenuptial agreements protect assets that have been accumulated before the marriage, and often even before the courtship began.”
Millennials are also heavily invested in buying a home, a goal that typically necessitates years of saving up. Because property is far more expensive than it used to be, it’s also become more common for couples to split mortgages, making it even more important to ensure that everyone’s financial position is clear-cut. Many millennials are children of divorce and have witnessed its impact at close range, so they’re keen to mitigate the potential fallout if things don’t work out.
The importance of prenups for older couples
While millennials are leading the charge on prenups at the moment, some of their parents may do well to follow suit. The divorce rate for people aged 65 and older roughly tripled between 1990 and 2015, and is still rising fast. Many of those free agents, men in particular, are choosing to walk down the aisle a second or third time. Since people tend to acquire more assets as they get older — and life tends to get more complicated over time — it’s especially important for this demographic to consider a prenup.
“Second and third marriages often bring an added layer of complexity in that the couple may have obligations from a previous divorce,” explains Stambleck. “They may have children and grandchildren. They may be estate planning. They may be retired, with no future income expected. All of these factors need to be assessed.”
People in this age group should also consider protecting pension payments, Social Security benefits or medical insurance benefits, and children’s inheritance, adds Ehsaei. It’s important to keep a level head, and ensure that whatever agreement you enter into, you’re doing so of your own volition, without feeling pressured by your partner.
What are the limits of a prenup?
Attractive as the idea of controlling every future detail may sound, prenups can’t accommodate everything — and for good reason. Anything to do with child custody, support, or visitation for example is off-limits because these rights involve a third party: The child.
“In most states, addressing any issues relating to custody in a prenuptial agreement wouldn’t be enforceable as it is against state public policy,” explains Stambleck. “After all, how can a couple predetermine custody-related issues of yet-to-be-born children? There are too many facts and circumstances that may impact custody determinations at the time they need to be made.”
Prenups also cannot include clauses related to illegal activity, or any arrangement that may act as an incentive to divorce. A prenup created under certain circumstances — such as one made orally or signed the day before a wedding, or under coercion, will be also invalidated by the court. Any prenup that appears to favor one partner to a ridiculous degree, or includes nonsensical provisions unrelated to finances — around things like weight gain, cheating, or drug use — will probably be thrown out, too.
“I’ve seen prenups regarding cheating twice in my career — but I didn’t draft them,” says Stambleck. “And while I’m sure prenups involving weight gain exist, as a practitioner, it’s repulsive. How would it be enforceable? Think of the practicalities — what if you get sick or have to take medication? The court can’t adjudicate on those issues.”
The question of adultery, while theoretically a bit clearer, still gets complicated when you dig into it.
“How do you even define ‘sexual’ relationship?” asks Stambleck. “Say, in a hypothetical scenario, the prenup stipulates an award of one million dollars in the event that one person cheats, and now you’re in a position where you’re trying to prove an affair. You can get records to show someone went to dinner or one person bought the other jewelry. But does that prove sexual relations?”
A looming question
More and more prenups include directions for what to do with frozen embryos in the event of a divorce, but these plans may be in for some serious disruption. Now that Roe v. Wade has been overturned, trigger laws that make abortion illegal have been activated in 13 states (though some are currently being challenged).
This may complicate how prenups are able to accommodate embryos — since, in some of these states, ancillary legislation has also been introduced to grant fetuses, embryos, and even fertilized eggs “personhood” rights, giving them the same protection under the law as living children. This means it could become illegal to destroy them — as is often the case with “spare” embryos created during the IVF process, especially if the couple splits up. Unfortunately at this stage, there’s still no telling quite what the future holds.
“As it stands, my recommendation to both parties would be the same,” says Stambleck. “Why would you sign up for years of potential litigation and headache?” Stambleck’s first move would be to check the contract the couple signed with the bank storing the embryos, and advise that any prenup take an affirmative position that, in the event of a divorce, the embryos are destroyed after a certain period.
“If the couple absolutely insisted that the embryos were kept and potentially used after a divorce, I’d have to delve into more nuance with them,” he says. “I always walk them through the divorce process, as the prenup opts out of those laws. How can you talk about deviating from something, unless you know what that thing is? Most people would understand the pitfalls of having a child with someone you’ve had a relationship with that has already broken down.”
