Prenups are getting more popular among millennials. What to know before you sign

With wedding season in full swing in Canada, prenups are in high demand.

Family lawyers who spoke to Global News say they have seen a rise in the number of millennials opting to sign prenuptial agreements before getting married – and that could save couples a lot of stress and heartache down the road.

“I’ve been practicing for 13 years now, and I would say they’re becoming more popular,” said Kirsten Hnatuk, a partner at Robertson Stromberg LLP, a law firm in Saskatoon.

“I’m seeing a lot of people in their late 20s, 30s, early 40s who are getting prenups.”

The legal contract lays out the financial assets of the couple and how those will be divided in case the marriage fails.

Planning for a divorce is not the most romantic way to kickstart a married life together, but it’s as important as financial planning or any other aspect of cohabiting, said Hnatuk.

It’s like an “insurance policy” that can not only protect one’s assets but make the separation process a lot smoother, legal experts say.

“Separations can be very, very messy,” said Laura Paris, an associate lawyer at Shulman and Partners LLP, a family law firm in Ontario.

“They could take a significant toll on people, not only financially but mentally, emotionally,” she added. “So I think there’s a lot of benefits to doing these things when you still care and are still in love with each other.”

The lure of signing prenups or marriage contracts is not just growing in Canada.

A survey conducted last year in the United States found that an increasing number of Americans reported signing a prenuptial agreement with their partner.

Meanwhile, four in 10 said they support the idea of having one as part of their wedding planning checklist.

There are a number of reasons why more people – especially the younger generation – are signing prenups.

In Canada, the average age of spouses at marriage has been rising over the years, as people postpone tying the knot.

The average age at marriage peaked in 2019 – hitting 35.3 years, according to Statistics Canada. It was 34.8 years in 2020, according to the most recent StatCan data available.

Delaying wedding plans means millennials are coming into the marriage with more assets in their pocket, like a house or perhaps a pension plan, that they would want to protect, said Hnatuk.

People also see the value in having a prenup if they are coming from a broken home and have lived through a divorce, in which case they experienced first-hand how stressful that can be for the whole family, she said.

Another driving factor is the state of the economy right now with inflation and high interest rates making it difficult for new couples to afford things like groceries and housing.

As the cost of living has gone up in Canada, Paris says she is seeing an influx in consultations related to cohabitation agreements or marriage contracts.

And the interest in prenups is not just among millennials who may be leaning on family support for loans but their parents as well, she added.

“From my experience, I would say that these questions are coming more often as a result of the fact that life is expensive right now and (for) many people … the funds that they’re starting their life with are generational wealth.”

It’s also about how people approach the marriage contract.

“Millennials are a lot more pragmatic when it comes to money,” said personal finance expert Rubina Ahmed-Haq, who also hosts For What It’s Worth on the Corus Entertainment radio network. Corus is the parent company of Global News.

“They don’t have as much emotion tied to, you know, how is this going to make another person feel?”

There’s often a negative connotation tied to prenups, but it can actually be a positive thing for all parties involved, said Paris. And the earlier you talk about it with your partner, the better.

Since the word prenup can be “pretty triggering” for a lot of people, Ahmed-Haq said it should be approached with sensitivity.

“I think really making it clear as to why you’re asking for this prenup is number one.”

Making the intention known from the get-go is especially crucial if it’s coming from a person who is in a financially superior position and other people’s assets are also at stake, Ahmed-Haq said.

“If you have businesses or money tied up with a partner or another sibling or with your family, it’s really important to present it that way, that this is really not just about protecting themselves, but it’s also about protecting a business that belongs to somebody else,” she said.

Paris recommends that her clients start the conversation at least six months to a year before the wedding because the negotiations and the eventual signing of the contract could take time.

Both sides should have their own separate lawyers involved to get legal advice and facilitate the prenup process.

While no prenup is similar and couples are at liberty to include or exclude whatever they choose, lawyers strongly urge full financial disclosure.

“You want to have absolute transparency on what each party’s holdings are at the time of the contract being drafted, as well as what their income is,” said Paris.

“If there is any hiding of that sort of information, it could undermine the validity of the agreement,” she added.

Spousal support is another aspect that couples may include or decide to waive off in their prenup.

While each case is different, Paris said prenups with spousal support releases “could be quite vulnerable.”

Her advice when there is significant income disparity is to include spousal support but limit how much is payable in the event of a divorce.

The prenup is also not set in stone and can be changed at any point in the marriage if both sides agree.

For those without a prenuptial agreement, there are protections outlined in the province’s family laws in the event of a marriage breakdown.