Is it a surprise to you that the trend of many millennials seeking prenuptial agreements has changed what was once an almost “taboo” subject? 10 years ago, few California couples wanted to “discuss the potential end of their marriage” before they even exchange their vows. However, a prenuptial agreement requires exactly that type of important discussion.
Prenups allow people who are planning on getting married to determine how things like property division and spousal support will be handled if they divorce. Why are many millennials seeking prenuptial agreements prior to marriage? One reason lies in the age and financial position of many first time would-be spouses. The average age of a first time spouse used to be in the mid-20’s. Today many millennials are waiting until their early to mid-30’s to tie the knot.
According to a recent national survey conducted by the American Academy of Matrimonial Lawyers reported increasing numbers millennials seeking prenuptial agreement. They have already begun to amass wealth in the form of retirement accounts, property ownership, protecting money inherited from their family, interests in a privately-held business or professional practice and ownership of their own homes.
When a couple divorces, community property rights can result in the loss of up to half of a fund’s appreciation over the course of the marriage, especially if “community funds” or income were used to contribute to the investment or retirement account.
When one of the individuals owns a business, the company assets may have to be divided or in some cases liquidated in part to satisfy a community property division order. This can wreak havoc on a company’s finances and make it difficult to operate following a divorce. A prenuptial agreement can determine ahead of time what will happen in such a scenario. It can also address how the appreciation in a company’s or investment’s value during the divorce will be classified for purposes of property division.
Property division is often a contentious part of the end of a marriage. California is a community property state, and thus in general courts will divide marital property equally between the estranged spouses. Millennials seeking prenuptial agreements have learned it is possible for these decisions to be taken out of a judge’s hands if there is a valid and enforceable prenuptial agreement in place.
The experienced Certified Family Law Specialists at Burke & Domercq often advise our clients who are considering a prenup to make sure that it is negotiated and signed well in advance of the wedding date so as to prevent a subsequent successful claim by one of the parties that he or she was forced to sign it under duress.