Millennials Negotiate Their Divorce Agreement Before They Get Married

Mish

Prenuptials aren't what they used to be.

How to Plan For Your Divorce In Advance

Millennials are using prenups to address economic and social issues through a Very Different Lens Than in the Past. 

The stigma or taboo that used to be associated with discussing money [and nearly everything else including divorce] before marriage is slowly disappearing.

“They don’t want to co-mingle their money; they want to live like financial roommates,” says Steven M. Resnick, a family law attorney with Ziegler, Resnick and Epstein in Livingston, N.J., who practices in New York and New Jersey.

This mind-set change is even true for clients who don’t have significant assets to protect going into the marriage, lawyers say. Some millennials want to keep their finances—current and future—separate and businesslike, which would allow them to leave a marriage, if necessary, without many strings attached.

“You’re effectively negotiating your divorce agreement in advance in a way that’s more egalitarian than before,” said Attorney Jacqueline Harounian.

Student Debt, Pets, Embryos, and Social Media

Part of what's happening is related to student and credit card debt.

Frequently one partner has far more debt than the other.

Frozen embryos and pets are also in the picture. Millennials discuss everything, including visitation rights for dogs and cats. 

What about social media?

Yep, that too. In case of divorce they don't want their ex to say nasty thing about them on Facebook.

The terms for divorce are thus effectively written in advance.

Mish

Comments (52)
No. 1-22
lesbaer45
lesbaer45

I have advised my daughter to "have a plan/understanding" before she decided to get married. She has assets to protect and "owns" her house after upgrading from a town home. In this day and age I consider it a smart and reasonable thing to do. I have also advised her to have hers/his/theirs accounts.

My SO and I have done this our entire 30+ years and so far it's avoided more arguments over finances than it gets credit for.

My other daughter understands the reasoning for this as well.

I can see how some may construe it as a plan to fail but given the craziness of divorce courts these days in only makes since to CYA as much as possible. For both sides.

BillSanDiego
BillSanDiego

You can reach whatever agreement you like on finances, but the IRS and local law is going to make the final decisions. Property brought into the marriage can be reserved to the original owner, but only at the value it had when the marriage occurred.

Corvinus
Corvinus

Maybe we are reentering a time when marriage is more of a contractual, goal oriented enterprise rather than the expression of juvenile notions of eternal romance that have been pushed in the last century or so. If so then I say bravo!

Rbm
Rbm

Yeah im a no marriage relationship. Ive seen to many people go from miserable to more miserable(dealing with lawyers). Seems to be working fine with less pressure money wise and all around. I do wonder about tax implications inheritance wise if something happens to one of us. .

SAKMAN
SAKMAN

We are entering a stage where everyone views themself as an individual economic entity.

Neoliberalism brainwashing 101.

njbr
njbr

It's all rational until it's not.

About a 1/4 of all murders involve spouses.

When money and resources was a factor, the previous era marriages were about the permanent union of resources (even if the relationship wasn't permanent) and the production of heirs. The acceptance of infidelities had to do with the minor factor that "love" played in the arrangement of marriage.

In this era, it's about "love". A rational discussion of the potential ending is all very fine and "adult", but if there are deep feelings, there will be deep passions about outcomes.

And as children come into the picture--watch out!

A plentiful future for guardians-ad-litem in this set-up.

Whatever could go wrong with self-centered people who think they can have complete control over their lives and future (and progeny) ?

Eddie_T
Eddie_T

Nothing wrong with being upfront about money...or considering divorce in advance...the odds now are better than the 50% that used to be quoted....more like 60/40 odds of staying together.

As I said in another thread...divorce is a great destroyer of wealth. People who manage to stay together end up, generally speaking , with a much higher net worth than divorced people...although short early marriages that end in divorce aren't quite as bad.....if people remarry after...and stay married.

Whether people comingle funds....it works for some people an not for others. My wife and I have always comingled our funds, but it has at times created problems. People with widely disparate tolerances for investment risk-taking might be better off keeping separate checkbooks. If both partners have similar outlooks and reasonable discipline with spending....comingling is no big deal.....maybe if one partner comes in with a lot of inherited money it might make sense to have a prenup. Funny, how rich parents usually take care of that...and poor parents don't even have it on their radar.

What I've seen with my millennial kids...all four of them....they seem to be savers and work hard to pay down debt...before taking on children and homes....very practical with money.

I have one daughter with a finance degree.....she helps me out a lot...I discuss my investment goals with her...she knows about all my obligations..She has all my passwords. At my age this is a relief, because....although my wife has good money instincts, she doesn't really have a handle on all the balls I'm keeping in the air, all the time.

Mr. Purple
Mr. Purple

There's an Arthur C. Clarke novel, must've been written 70 years ago by now (Songs of Distant Earth perhaps?), where the civilization uses short-term marriage contracts (5 year, 10 year). When the term expires, the partners have to agree to renew the contract. Always seemed more sensible to me than our present arrangement.

Bungalow Bill
Bungalow Bill

Why get married at that point? Why not just remain roommates?

Part of America's decline is the reduction of birth rates among its citizens. It just seems to me too much focus is put on all the wrong things these days when it comes to marriage and its starting to show as we teach making things work is too much hard work. Take the easy way out!

Mackkenzie
Mackkenzie

Marriage is likely a good option for any couple that want to live together for a long time. Many jurisdictions have common-law marriage laws that kick on after you've been living together for a long time anyway, so it's not like avoiding marriage saves your assets. Marriage has a lot of legal conveniences such as giving your partner rights if you get sick (e.g. directing your care), etc.

On the flip side, there are tragic cases like famous Swedish author Stieg Larsson's long term partner who got none of his book royalties after he died. Instead, the royalties reverted to his blood family who he had nothing to do with.

Sure, you can take care of all these legal issues with power of attourney documents, wills, etc, but it's a pain to have all these different legal documents, and in the end you will have re-created a marriage by other means.

I respect anyone who decides they don't want a long term partner and eschew marriage (hey, it works for Goldie and Kurt), but if you have found someone you are going to live with for a long time then you're likely better off getting married.

Doug78
Doug78

I am going on the 45th year now with my wife now so divorce is the last thing on my mind. We co-mingle about 90% of our funds and that's from the start. I trusted her back then and I trust her now. Guess I got lucky

Eddie_T
Eddie_T

Survivorship is a subject worth discussing.

If couples own real estate together, especially of it’s more than just one home....and if there are mortgages involved, the way the loans are set up does matter. Mortage brokers are not tuned in to this.....they just want a quick deal. It’s easier for them to deal with one borrower in most circumstances

Both partners ideally should be applicants on every mortgage imho....so that if one dies there is no risk of having a long term loan with locked in interest called early on account of death of the borrower. My research leads me to believe this is not common practice , but in the case of the death of the primary breadwinner, the lender might have the option to call the loan....the surviving spouse might be pushed to prove her/she is qualified to service the debt......if that person is on the note as a borrower the bank can’t do that.

Women worry about being cheated....and they should....so make sure they can’t be...to the best of your ability. I didn’t realize how much this mattered to my wife until we ended up with a couple of loans that were just in my name. For her peace of mind I will never take on another mortgage that doesn’t have her name on it too.

I also spell out in my will that my wife inherits the entirety of my interest in all our real estate, if I predecease her, which is completely likely.

The other area worth discussing is a shared business. My business....I am a sole proprietor...and state law says my wife cannot be an owner....because she is not licensed to practice in my field. But she is my de facto partner, and works just as hard as I do.

If I died intestate, she couldn’t even write a check on my business account, something she now does all the time. In order to make sure a sudden death event won’t be more catastrophic than it has to be.....I made her my executor....so she can use the business funds anyway she needs to...I’m sure she will need help..so I made one of the kids co-executor...my son, because the girls might otherwise fight with each other or quibble.

Tengen
Tengen

I can't blame Millennials for being careful and can attest from personal experience that divorce is no joke. I took a big financial hit and that was without getting lawyers involved!

Marriage is largely incompatible with modern American culture and I don't see any way to fix it. The only arrow in the quiver is to get rid of no-fault divorce, but that opens a giant can of worms where people are trapped in bad marriages. Rather than accepting their fate, the unhappy partner will likely act out, creating more problems.

From anecdotal experience, it's worth noting that my only ex who has an enduring marriage is the Muslim one. My last serious gf before I got married was from Turkey and she's been married over 15 years now, happily as far as I can tell. All my other exes are American women who never found The One™.

goldguy
goldguy

Wow, I don't even know where to start with this comment. Being married to the same wife for almost 50 years, having successful children and now Grandkids, I did not realize how fallen society has become...speechless

truthseeker
truthseeker

Another sign of collapsing culture in America is these young adults are no longer getting married in churches or even synagogues so that traditional vows are no longer used or respected. What you will first see if you google traditional values is this “the moral and ethical principles traditionally upheld and passed on within a family as fidelity, honesty, truth and faith.- values especially of a traditional or conservative kind which are held to promote the sound functioning of the family and to strengthen the fabric of society.”

Eddie_T
Eddie_T

I’m not an accountant or a financial planner.......but I have a hard time understanding how anybody does NOT benefit on being married when it comes to taxes.

And if you have a family you (unless you make really big bucks) you should be benefiting from a nice mortgage interest deduction on Schedule A.....and married filing jointly you share your deductions for dependent children.

I understand that for some very high earning couples some deductions are capped and phased out at certain levels of earned income. If you suffer from that kind of “problem”......you need some RE investments to give you more interest deductions...... and more legitimate expense items.

Everybody needs a business...or two. A Schedule C is another way to lower personal expenses by taking every legitimate business expense. My friend Michael Phillips used to talk about what he called briarpatch businesses.....micro businesses that are never intended to become some giant enterprise....

My boat storage is what I came up with....it’s a real estate investment (commercial property now paid-off and appreciating in value), it’s a cash flow business with long term tenants.....and importantly......I have zero employees to have to pay taxes and social security and unemployment on....any businessman will tell you that employees are the biggest headache in running a business.

And in Texas.....if you just store boats....you don’t even have to collect sales tax......hell yeah.

Casual_Observer
Casual_Observer

I think why even bother with a relationship or getting married. Millenials, like their parent baby boomers, want it both ways. Baby boomers really did a number on the country. Left their children in debt and left their government in debt. Baby boomers own the asset side of everything while government and the next generations own the liabilities .

bradw2k
bradw2k

Either get a pre-nup, or get screwed later by a random judge in divorce court.

njbr
njbr

Until the kids come...

...A prenup cannot include child support or child custody issues. The court has the final say in calculating child support. ... A court would never uphold a provision of a prenuptial agreement that dealt with child support, child custody, or visitation, because these are issues of public policy....

Mandelabra
Mandelabra

I find it hard to believe that the cohort of millenials who are fiscally literate with regard to these matters is anything bigger than infinitesimal.

Midwest Guy
Midwest Guy

First time marriage rates have been dropping over the decades, but for those born in the 90s, the chance of having a first legal marriage has drastically dropped. Check out this blog entry by Allen Downey:

He has posted about this particular data set three times, but one year he skipped (or I couldn't find the posting). The data originally predicted that the first marriage rate would start to near flat-line for those born in the 90s earlier than it actually did. While the marriages didn't slow down as earlier as predicted, they did eventually slow down, and it is now looking like there could be a ton of people born in the 90s that never get legally married.

amigator
amigator

This is directly related to how our laws have been given to us by our leaders over the past 40-60 years (which Mr. JB was part of). The family unit has been put out with the trash. The government sees is no real benefit to being married to fostering a family that raises its kids with values and decency. That is not necessary in a world where the government knows best and tells us how and what we do.... Good luck making this last.

I think a bunch of terrorists protested about such a system back in 1770's.Talking about free speech and limited government and individual rights. I will see if I can find it if google has not erased it yet!


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