Fifty years ago in Michigan and the rest of the United States, prenups were a taboo topic that only wealthy couples worried about. But these days, people of all backgrounds and budgets are considering pre-wedding asset agreements.
What is a prenup?
Prenuptial agreements are contracts signed by engaged couples before they marry to delineate asset allocations in the event of a divorce. Some people write their own prenups, but it’s a gamble. If you don’t word it correctly or disregard state or federal law somehow, the contract may not be enforceable, so professional assistance is recommended when drafting such an agreement.
Why are prenups growing in popularity?
The increasing popularity of prenups is tied to a few societal trends. These include the following:
- Later marriages: These days, people are waiting longer to tie the knot. As a result, people have more assets coming into marriages that they want to protect.
- Less stigma: Divorce is a lot more common than it once was, and the stigma is virtually gone in many communities. As such, there’s less squeamishness about planning for worst-case scenarios.
- Future assets: The economy is changing, and so is the way people save money. Fewer young people own homes, but many have investments and startup stock options. Protecting these potentially lucrative assets is a top priority, so many of today’s prenups focus on future windfalls.
Prenups are still freighted with negative connotations for some people. However, these agreements can offer valuable protections for many couples who would rather plan ahead when they are on good terms.