It may be surprising but professionals in Canada are saying that more and more millennials are signing prenups (called marriage contracts or cohabitation agreements in by professionals in Canada) before getting married or cohabiting.
According to Global News a recent U.S. study found that an increasing number of young adults are requesting prenups to cover things like protection of property, spousal support and division of assets. Toronto-based family lawyer Rick Peticca told Global that the same trend is happening in Canada.
Although it may sound counterintuitive for the notoriously cash-strapped generation to be creating contractual agreements to protect their assets the Global News article reported some significant reasons why prenups are on the rise for millennials.
Firstly, millennials are typically staying in school and working for longer than people did 30-40 years ago. This means they have accumulated more assets when they finally decide to settle down. Some millennials may also be inheriting inter-generational wealth which they may wish to protect. In 2018 Global news reported a rise in “living inheritances” where Canadians are passing wealth on to their children or grandchildren before they die to help them buy homes, pay off debt, or enjoy for financial freedom.
People are also approaching relationships differently then they used to. Divorce rates are high, and many millennials are coming from broken homes. Millennials don’t necessarily see marriage as forever and want to protect themselves if the relationship eventually ends.
A discussion about financials is always important to have before entering a marriage or common-law relationship and this may mean having the uncomfortable discussion about the possibility of a prenup. This can be a difficult conversation to have, especially at the beginning of a relationship.
The reality is there are many uncomfortable conversations that should be had before entering a serious relationship. Discussions about religion, family dynamics, and sex are all difficult but important conversations to have before marriage. A prenup is just another one to add to the list.
Instead of bringing it up coldly try and talk to your partner about why you feel a prenup is important to you. It is important to let your partner know that you don’t foresee divorce or a separation happening, but you want to cover all your bases because things can get messy if a couple isn’t prepared.
One way to mitigate against the possibility of the conversation becoming overly conflictual is to consider engaging in a formal negotiation process such as mediation or Collaborative Process. The conversation takes place with the assistance of consensual dispute resolution professionals who are trained to assist parties to reach resolutions in a non-adversarial way. Thus keeping the preservation of the relationship as a goal during the negotiation. By having the conversation together with professionals there is less likelihood of misunderstandings or confusion about the intentions of the other party.
Legal advice is a requirement for both parties, if the agreement is going to be enforced in the future. So, it is helpful to get that advice during the negotiation rather than after a proposed agreement has been presented.
If you and your partner decide to get a prenup it is important to have a lawyer handle the agreement to make sure it is legally sound. It is also advisable for each party to engage separate counsel to look over the document so each person can feel comfortable with the agreement.
The other requirement to ensure that the agreement will be upheld in the future is to provide a full exchange of financial information between the parties. If the information is inaccurate or incomplete the agreement could be found to be invalid, which would defeat the purpose. So, it is important that parties get advice about what has to be provided during the negotiation and not after. It may seem like a downer to talk about divorce, but it can make the process smoother and less adversarial if everything is set out in advance in the event of the dissolution of a relationship.