Individuals in the Millennial generation (those born between the years of 1982 and 2004) are more apt to ask their significant others to sign and complete a valid prenuptial agreement prior to marriage. A prenuptial agreement, or “prenup” for short, is a legal contract that is established between future spouses to protect their property and assets, especially in the event of a divorce.
Millennials are much more cautious than their generational counterparts (Baby Boomers and Generation Xers) because many of them are children of divorce. They witnessed what their parents went through and desire to ensure financial security and protection of their interests. Also, by the time millennials have decided to marry, many of them have acquired assets, such as property, 401(k) retirement plans, stock options, among others that they now want to protect in the event that the marriage fails.
There are three main purposes for obtaining a prenuptial agreement, which include:
- Protecting oneself from debts;
- Clarifying financial rights; and
- Avoiding arguments in case of divorce.
Prenuptial agreements can protect a spouse from the other spouse’s debt. Due to the cost of a college education, it is to no surprise that many millennials have an overwhelming amount of student loan debt. In many cases, the student loans must be paid by the borrower of the loans and does not affect the non-borrowing spouse. However, if the non-borrowing spouse decided to cosign on their spouse’s student loan, they will be financially responsible if the borrowing spouse is unable to make payments. Aside from student loan debt, millennials tend to have debt accruing form other areas, such as mortgages, car payments, among others. A prenuptial agreement can legally separate a borrowing spouse’s debt from a non-borrowing spouse.
Aside from the separation of debt, prenuptial agreements allow each spouse to clarify financial rights. The agreement can outline the financial responsibilities and duties each spouse will make to each other throughout the duration of the marriage. Also, prenuptial agreements can help delineate between joint property and separate property.
Lastly, a prenuptial agreement can potentially alleviate any foreseeable arguments that may arise in the case of divorce. Since divorce proceedings are innately stressful and emotionally taxing, a prenuptial agreement can help spouses avoid unnecessary conflict over assets and property when going through a divorce. Prenuptial agreements can also override the New York State equitable distribution statute. With equitable distribution, assets and property are divided amongst the two spouses as fairly as possible. However, with a proper prenuptial agreement in place, there may be no need to apply the rules of equitable distribution.
If you and your future spouse are interested in drafting a prenuptial agreement for a pending marriage, it is important to contact a skill New York matrimonial and family law attorney to help you decide upon what factors to include in your agreement, as well as formally devise a contract to fit your and your future spouse’s needs. The staff at the Fig Law, P.L.L.C. have experience representing individuals in all aspects of family law and can walk you through the complexities of the creation of a prenuptial agreement. For more information, contact Heather A. Fig at office to learn more about the firm’s services.