There are several reasons why premarital agreements have become more widely used. One obvious reason to me is that the boomer generation has entered a period where they are getting divorced now that their children are grown and out of the house. However, they often remarry and now that they are well into (and likely past) the prime of their lives, they have a lot more to lose than they did when they entered their first marriage at 18 or 20 years old.
1. Premarital Agreements Prepare for the Future
When a couple begins their young adult lives together and each goes to school, builds their careers, has a family, and saves for retirement over 20+ years, there is far more of an entitlement to all that was built during the marriage because they both often started from nothing. There is also a sense that “we did this together” even for the spouse who worked while maybe the other spouse stayed home and cared for their children.
2. Individuals want to Protect their Assets
When it comes to entering a second marriage with assets built over a lifetime, the thought of sharing that with someone new is not as appealing as it was the first time around. Further, there may be children to whom you wish to leave your wealth to and do not wish to see half of your legacy taken if your marriage fails. Ultimately, by this age, people are generally far more realistic about the ways of the world than they were as hopeless romantics at 18 years old!
Marriage is a business; it is two people coming together and bringing each of their “businesses” with them deciding to form one business together. One person may be a far more advanced businessperson and have a far more complex business they wish to protect. For all of these reasons, later-in-life marriages are a definite result of premarital agreements being more common now than in the past.
Young adults are gaining wealth, and a lot of it, in a variety of ways today that were unheard of in the years past. With technology blasting beyond us at lightning speed, there are more creative ways for young adults (even children! Think of all the YouTube child stars), to earn significant amounts of money earlier in life than our grandparents did. With the increase in technology and the savviness that requires, young adults are learning more about business when they are young and thus they are taking precautions that weren’t necessary for many of their elders. Think of Mark Zuckerberg. I don’t know how old he was when he got married, but I can be certain there was a premarital agreement in place when he did! Think of all the legal scenarios Mark had already been through by the time he was getting married. You grow up fast and learn a lot when you are thrust into that lifestyle at such a fast pace.
3. People are More Educated About Money
The more we are all educated about money, which is far easier now than it was pre-internet, the more we feel comfortable discussing money. The more we discuss money, the easier it gets to have those discussions. When you are comfortable having the discussions, you learn more. When you learn more, you become more confident in yourself, and your own abilities. Your anxiety and fear decrease and you grow as an individual and as a couple. Once more young adults begin to understand how money works, how to build their wealth, and what they each want out of life and out of their marriage, the idea of a premarital discussion and/or agreement becomes a mutual desire.
Understanding what each partner wants out of life and setting expectations can create a world of accountable adults who make agreements and stick to them, rather than being forced into unfair agreements one party never understood to begin with. If you are seeking guidance in this area, contact West Coast Family Mediation Center at (858) 736-2411 today!
by: Jennifer Segura