What do Michael Jordan, Mark Zuckerberg, and Kim Kardashian all have in common? Each of the billionaires have famously signed prenuptial agreements, or prenups.
At their most basic level, prenups are a contract. Before getting married, two people list all of their assets and liabilities, and outline how those should be split should they in fact split. And the number of people — especially young people — signing prenups has exploded over the last decade.
Twelve years ago, a survey from Harris Interactive found just 3% of those polled who were married or engaged said they had signed a prenuptial agreement. When Harris ran the poll again this year, that number had climbed to 15%.
“Marriage is for love, obviously, but it’s also about personal assets, and I think that is really influencing younger people’s willingness and desire to sign prenups in the first place,” Michael Waters, a freelance writer who wrote about prenups for the New Yorker, said in this week’s Best New Ideas in Money Podcast.
Overall, more Americans — but especially millennials — are getting prenups.
The Harris poll found that 40% of people between the ages of 18 and 34 who were married and engaged said that they signed a prenup. Waters says one reason for that is because younger people have a more pragmatic approach to marriage as an economic contract.
Another reason is just the difficult economic circumstances in our country, especially around debt. Debt of all kinds is a concern for people getting married, MarketWatch managing editor for personal finances Quentin Fottrell said on the podcast.
“These are all good things to know about before you get married, because if you have to write a prenuptial agreement, you’re going to have to open your bank accounts and you’re gonna have to share your financial statements about your student loans, your credit card debts, your checking accounts, your savings accounts, and you’re going to have to be transparent,” Fottrell said on the podcast.
Prenups can be a helpful tool for lots of couples, but there are two issues: they’re expensive, and the process can take a while. That’s why Massachusetts family law attorney Julia Rodgers co-founded HelloPrenup, a digital platform that allows couples to take the process online.
According to Rodgers, working on the prenup collaboratively can help address other big money discussions that often plague relationships down the line and can be a good space to address a lot of the financial concerns that women in particular are more likely to face, like the motherhood penalty.
Learn more in this week’s podcast. And tune in every week to MarketWatch’s Best New Ideas in Money podcast with Stephanie Kelton, economist and a professor of economics and public policy at Stony Brook University, and MarketWatch reporter Charles Passy. Each week, they explore innovations in economics, finance, technology and policy that rethink the way we live, work, spend, save and invest.