How Common Are Prenups? Insights into a Growing Trend

Prenuptial agreements, often shortened to prenups, were once seen as a luxury for the rich and famous. However, the landscape is changing, and today, more and more couples are asking themselves, “How common are prenups?” Prenups are no longer just for the wealthy or celebrities. They’re now vital for couples of all income levels. In fact, as divorce rates and financial complexities continue to rise, prenuptial agreements are seen as an essential step toward financial clarity and protection.

Key Takeaways

Prenups Are Increasingly Common: In 2022, 15% of married or engaged couples had a prenup, up from 3% in 2010, with growing support for their use across all income levels. Prenups Offer Protection for Everyone: Whether you’re wealthy, a business owner, or in a blended family, a prenup can protect your assets and establish clear financial guidelines. What Prenups Can Cover: A prenup can outline how assets, debts, and business interests will be divided, and it can also address spousal support, inheritance, and pet ownership. What Prenups Can’t Cover: They cannot dictate child custody or child support arrangements, nor can they include illegal terms. Alternatives for Married Couples: Even if you’re already married, you can still create a postnuptial agreement to outline similar terms.

The Growing Popularity of Prenups

Prenuptial agreements are more common than ever before, and this trend shows no sign of slowing down. According to a 2022 Harris Poll, approximately 15% of engaged or married couples in the U.S. now have a prenup—an increase from just 3% in 2010. Not only are more couples signing prenups, but public opinion is also shifting. More than 40% of Americans now support the use of prenups, and 35% of unmarried individuals say they’re likely to use a prenup when they marry.

While prenups were once seen as something only the wealthy needed, the reality is far different today. Whether you’re a high-income earner, a business owner, or part of a blended family, prenups can provide valuable protection for both parties. But, how common are prenups among everyday people, and what makes them an important consideration for your relationship?

What is a Prenup?

A prenuptial agreement, commonly known as a prenup, is a legal contract between two people who are planning to marry. It outlines how assets will be divided in the event of a divorce or the death of one partner. While most people think of prenups in the context of divorce, they can also include provisions related to inheritance, estate planning, and the treatment of children from previous marriages.

A well-drafted prenup can:

• Define the division of property and assets acquired before and during the marriage
• Establish spousal support (alimony) in case of divorce
• Clarify financial responsibilities, such as debt division
• Specify the treatment of inheritances and family businesses

Having a prenup can help set clear expectations for both partners, avoid misunderstandings, and provide peace of mind should the relationship end.

How Common Are Prenups: The Key Factors Driving Popularity

While how common are prenups is a key question for many, understanding why prenups are becoming more common is just as important. Several factors contribute to the increasing popularity of prenups among couples of all backgrounds:

1. Increased Financial Awareness: As financial literacy and awareness grow, more individuals understand the value of protecting their assets. Whether it’s a home, retirement savings, or business interests, a prenup ensures that assets are distributed according to the couple’s wishes.
2. Second Marriages and Blended Families: Couples entering second or third marriages often have complex financial situations, such as children from previous relationships or family-owned businesses. A prenup can protect the interests of children and ensure that a fair division of assets is made in the event of divorce or death.
3. Business Owners and Entrepreneurs: Entrepreneurs and business owners are more likely to use prenups to protect their businesses. By clearly stating that a business is separate property, they can prevent it from being divided in the case of a divorce, helping preserve its future.
4. Changing Attitudes Toward Marriage: Younger generations, particularly millennials and Gen Z, are marrying later in life and often approach marriage more pragmatically. Rather than seeing a prenup as a lack of trust, they view it as a practical way to safeguard their financial futures.
5. Protection for Women: Prenups are not only for wealthy individuals. Women, in particular, are increasingly seeking prenups to ensure they are financially secure, particularly when they bring assets or debts into the marriage. They also provide protection for women who support their spouse’s career or education while sacrificing their own.

What Does a Prenup Cover?

A prenup serves as a safeguard, setting expectations for asset division in the event of divorce or death. Some of the key areas a prenup covers include:

• Property Rights: Prenups can dictate how property, including real estate and financial accounts, will be divided.
• Business Ownership: If one partner owns a business, a prenup can ensure that the business remains separate from marital assets.
• Spousal Support: A prenup can outline whether spousal support (alimony) will be paid, and if so, how much and for how long.
• Debt: Prenups can specify how debt will be divided between the couple—whether it’s premarital debt or debt accumulated during the marriage.
• Inheritance and Family Assets: For individuals who plan to pass on significant assets or family heirlooms, a prenup can ensure that these assets stay within the family.

What a Prenup Doesn’t Cover

While prenups can be highly beneficial, there are some areas they cannot address:

• Child Custody and Child Support: Prenups cannot dictate child custody or child support arrangements. The court must handle these matters as distinct issues.
• Unlawful Provisions: A prenup cannot include terms that are illegal or against public policy. For example, it cannot waive rights to child support or contain unfair or coercive terms.
• Unenforceability Issues: If a prenup is signed under duress or without full disclosure of assets, it may be deemed unenforceable by a court.

What Happens If You Don’t Have a Prenup?

If you don’t have a prenup and your marriage ends in divorce, state laws will determine how assets are divided. Depending on your state, this could mean that property is divided either equally or equitably:

• Equitable Distribution States: Assets are divided in a way that’s considered fair, but not necessarily equal.
• Community Property States: All assets acquired during the marriage are divided equally between the spouses.

While state laws provide a framework, they may not always align with your personal wishes. A prenup gives you the ability to make these decisions yourself, rather than leaving it to the state.

9 Reasons You Might Want a Prenup

There are numerous situations in which a prenup could be beneficial, no matter your income level:

1. You Have Significant Assets: If you’re bringing substantial assets into the marriage, a prenup can protect them.
2. You Own a Business: To ensure your business remains yours in the event of divorce, a prenup is essential.
3. You Have Children from a Previous Marriage: Protect your children’s inheritance with a prenup that outlines asset distribution.
4. You Expect an Inheritance: A prenup can ensure that any inheritance you receive remains separate from marital property.
5. You Have Debt: If one partner has significant debt, a prenup can specify who will be responsible for it.
6. You Plan to Be a Stay-at-Home Parent: Ensure that the contributions of a stay-at-home partner are recognized in the event of divorce.
7. Financial Support for Career Growth: A prenup can address the issue of one spouse supporting the other’s career or education.
8. You Have Pets: If you and your partner share a pet, a prenup can specify who gets custody in the event of a divorce.
9. You Want to Avoid Court Battles: A prenup can prevent long, drawn-out court battles over asset division.

The Downsides of a Prenup

While a prenup offers numerous benefits, there are potential downsides to consider:

• Unbalanced Agreements: Prenups can sometimes favor one party over the other, leading to an unfair distribution of assets.
• Emotional Impact: Discussing a prenup can sometimes create tension or insecurity in the relationship.
• Changing Circumstances: As time passes, your circumstances may change, making the terms of your prenup seem less fair.

What If You’re Already Married?

If you’re already married and realize that a prenup could have been beneficial, don’t worry! You can still protect your assets by creating a postnuptial agreement (postnup). A postnup serves the same purpose as a prenup but is signed after the wedding.

FAQs

How common are prenups in the U.S.?

Prenups are becoming more common, with 15% of engaged or married couples in the U.S. now having one, a significant increase from 3% in 2010.

Do prenups only protect wealthy people?

No, prenups can be valuable for individuals of all income levels. They protect assets, debts, and business interests, and are especially useful for blended families or people with significant personal assets.

What does a prenup include?

A prenup typically covers the division of assets, debts, business ownership, spousal support, and inheritance. It can also address financial obligations in case of death or divorce.

Can a prenup address child custody and child support?

No, prenups cannot dictate child custody or child support. These matters must be handled separately through the court system.

Can a prenup be changed after marriage?

Yes, if you are already married, you can create a postnuptial agreement (postnup), which serves the same purpose as a prenup and outlines financial arrangements after the marriage has taken place.

What will happen if we don’t have a prenup?

If you don’t have a prenup, state laws will determine how your assets are divided in case of divorce. In fair distribution states, they divide assets with justice, not equality. In community property states, assets are split evenly.

Are prenups legally binding?

Yes, prenups are legally binding if they are properly drafted, signed voluntarily, and both parties disclose their assets. However, they can be challenged in court if one party feels coerced into signing or if there was a failure to disclose important information.

Conclusion: How Common Are Prenups?

In conclusion, the answer to “How common are prenups?” They are becoming more common among couples of all backgrounds. As divorce rates rise and financial complexity grows, prenuptial agreements provide a smart, proactive way to protect both parties and ensure financial fairness. Whether you’re a high-earner, a business owner, or part of a blended family, a prenup can be an essential tool in safeguarding your future.

If you’re considering a prenup, it’s crucial to consult with a trusted professional who specializes in these agreements. At Prenup Specialist, we offer personalized guidance to ensure that your prenup meets your specific needs and protects your interests.