Historically, the thought of drafting and signing a prenuptial agreement (or “prenup”) has been labeled as unromantic. However, with a changing marriage landscape, the execution of a prenuptial agreement may actually be the romantically smart decision to make.
The concept of the prenuptial agreement was developed more than 2000 years ago, as a Hebrew marriage contract named “The Ketubah.” The Ketubah was one of the first legal documents giving financial and legal rights to women. The Ketubah was an arrangement between the two families of the couple to be wed, providing for financial stability for the wife in the event of a separation.
As an American society, we have amended the purpose and mindset of the marriage contract to a one-sided protection document. It has morphed into a security blanket for an individual who comes from a family of vast wealth. This market of individuals who sought out prenuptial agreements arose as a result of generations of low divorce rates as well as a low average age of marriage. With no realistic chance of divorce and no true assets to protect, a prenuptial agreement seemed worthless to the average couple in their 20s, hopelessly in love.
Prior to the 1980's the divorce rate in the United States was below 20%, and prior to the 1960's the divorce rate was below 10%. The average age of marriage prior to the 1980's was 23 for males and 20 for females. This low average age of marriage resulted in two people that were getting married with little-to-no assets and/or income to their own name. Additionally, the historically low divorce rates created a stipulation in our society that divorce only occurred on the rarest of occasions.
Thus, prenuptial agreements were introduced in the United States as a security blanket for a young individual getting married with immense family wealth. While neither the husband nor wife anticipate a divorce, in the rare possibility that the marriage ended, the family wealth would be protected.
Fast forward to 2016. The statistics are not as flattering as they once were. Some sources report the divorce rate at above 50%. The average age of marriage has risen to 29 for men and 27 for women.
These two different statistics portray a different reality in today's world. First, the divorce rate exposes marrying couples to the realism that divorce and separation does occur and, harshly, is more likely to occur than not. While nobody marries with the thought that they will eventually divorce, more than 1 out of every 2 couples now go through the process of separation. Additionally, the higher average age of marriage means that individuals have more time to generate income and acquire assets (or liabilities) prior to marriage.
At this point, however, prenuptial agreements may make sense as a practical matter. Although public opinion remains that prenuptial agreements seem cold and unromantic, this sentiment needs to change. Let's discuss how prenuptial agreements can be romantic with these two crucial thoughts:
1. CNBC reported in 2015 that finances are the leading cause of stress in relationships. The category of finances included anything from spending and saving habits, to simple disclosures about each other's financials. When drafting a prenuptial agreement, a couple is forced to explore and open the communication channels to financial discussion. Understanding your significant other's financial goals and morals is crucial in developing a successful relationship. For a couple who has never openly discussed such crucial information, a prenuptial agreement may force the issue and establish a communication system that provides for long-term prosperity in the area that causes the most stress in a relationship.
2. The second and most important point here reverts back to the policy behind the first prenuptial agreement, The Ketubah. The Ketubah was designed to promote financial security for both parties, no matter what was to come in the future. In today's world, a divorce can get ugly. A couple following through with a divorce is naturally and obviously not on the best of terms. So why is the norm to divide up a couple's finances at a period when they are most hostile towards each other, which results in unfair results and very high attorney's fees? Hint: it's not. Instead, the romantic gesture would be to look out for each other's long-term finances at a time when the couple is hopelessly in love. It demonstrates a couple's true intentions when entering the marriage. A mature and realistic conversation could lay down a landscape to protect each other's interests in the event that the relationship does not turn out as planned.
In consideration of the drastically changing marriage landscape, in combination with the evil emotional realities involved in a divorce, a prenuptial agreement is something all couples should consider. Even if you are an optimistic romantic, at least make sure you open up the financial communication channels with your significant other prior to saying, “I do.”
To speak with an attorney who can help advise you further about a prenuptial agreement, contact us today for a free consultation!