What do Michael Jordan, Mark Zuckerberg and Kim Kardashian have in common? Every billionaire has signed a prenuptial agreement or prenup.
At its most basic level, a prenuptial agreement is a contract. Before getting married, the two listed all their assets and liabilities and outlined how they should be divided they should actually be divided. The number of people signing prenuptial agreements — especially among young people — has exploded over the past decade.
Twelve years ago, a Harris Interactive survey found that only 3 percent of respondents who were married or engaged said they had signed a prenuptial agreement . When Harris took the polls again this year, that number had climbed to 15 percent.
“Marriage is of course for love, but it’s also about personal assets, and I think that does affect young people’s willingness and desire to sign a prenup,” wrote the New Yorker prenup. Freelance writer Michael Waters on this week’s Best New Ideas on the Money Podcast.
Overall, more Americans—especially millennials—are entering into prenuptial agreements.
The Harris Poll found that 40% of married and engaged 18- to 34-year-olds said they signed a prenup. One reason, Waters said, is that young people are more pragmatic about marriage as an economic contract.
Another reason is our country’s economic difficulties, especially with regard to debt. Debt of all kinds is a problem when people get married, Quentin Fottrell, managing editor of personal finance at MarketWatch, said on the podcast.
You will have to write a prenuptial agreement, you will have to open your bank account, you will have to share information about your student loans, credit card debt, checking accounts, savings accounts and your Financial reporting “must be transparent,” Fottrell said on the podcast.
Prenuptial agreements are a useful tool for many couples, but there are two problems: they are 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 handle the process online.
According to Rogers, working together on prenuptial agreements can help with other big money discussions that often affect relationships and can be a good space to address many of the financial issues that women in particular may face, such as Fertility penalty.
Learn more in this week’s podcast. Listen to MarketWatch’s Best New Ideas in Money podcast every week, hosted by Stony Brook University economist and professor of economics and public policy Stephanie Kelton and MarketWatch reporter Charles Passy. Each week, they explore innovations in economics, finance, technology and policy that rethink the way we live, work, consume, save and invest.
You can listen to past episodes here .