Are Millennials and Gen Z Right to Embrace Prenups? Probably.

“Prenup” feels like a loaded word, with mostly negative connotations. Greedy, cold, calculating.

But that’s changing, mostly among younger generations. Jennifer Wilson reports in the New Yorker:

“According to a 2023 Harris poll, 21% of Americans say that they have signed [prenups], up from only 3% in 2010. Millennial and Gen Z respondents account for most of that uptick, at 47% and 41%, respectively.”

Prenups may be following the trajectory of other legal documents, such as wills.

The process used to be time-consuming. The cost was prohibitive for many. So you might decide that you’d get around to it at some later point. Or you’d conclude that you didn’t really need one at all.

Both the business and popular opinion have evolved, though. The New Yorker article adds:

“The past few years have seen the rise of new apps such as HelloPrenup, Wenup, and Neptune that fast-track the process; the latter has couples discuss their finances with an A.I. chatbot before being matched, by algorithm, with a lawyer.”

If you’re not wealthy, why would you bother with a prenup? Because untangling your financial life with a partner can become messy quickly:

“Though premarital assets are separate by law, they can become shared if you start, well, sharing them — in some states, for instance, by moving your spouse into a home you purchased solo and opting to significantly remodel together. (The legal term is ‘commingling.’)”

Here’s an incomplete list of reasons why a Millennial or Gen Z couple may opt for a prenup:

• The relationship starts at older ages, when each partner already has financial assets;
• One or both partners has student loan or credit card debt;
• One or both partners owns or plans to launch a business;
• One or both partners anticipates an inheritance from a family member;
• One partner sacrifices earning potential to care for children;
• The couple wants to learn how the law treats marriage & ownership.

Prenups once carried a social stigma. But now, there’s increasingly little reason to forgo one.

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• Can a Simple Investing Strategy Work?

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About the author: Kevin Mahoney, CFP®

Hi, I’m Kevin. I’m the founder of Illumint and a financial advisor in Washington, DC. I specialize in financial planning for Millennials like you. As a Millennial father and Certified Financial Planner™, I empower our peers to invest with confidence and flexibility. If you’re new to Illumint, I’m glad you’re here – you now have access to free personal finance tips written specifically for Millennials. I encourage you to read, watch, or listen to the ideas I share about exchanging your money for memories with your friends and family. And then when you’re ready, please send me your thoughts & questions!