Amanda Farris works in accounting and likes to “play things safe” when it comes to her savings and investments. Her boyfriend, Andy Salmons, owns a coffee shop and is a serial entrepreneur not afraid to take risks.
The two have been together for nearly four years and are talking about marriage. But before they vow to stay together for better or worse, they’ve agreed to come up with a plan for how they would protect their finances on the — slim, they hope — chance that their relationship should head south.
“I wanted to find some middle ground,” said Farris, 31, adding that a prenuptial agreement would separate her retirement savings from Salmons’s business and the debt he took on to launch that and other ventures. “It’s important for us to keep things separate,” Salmons, 32, said. “I don’t ever want my decisions to put her in jeopardy.”
As more millennials put off marriage until later in life than previous generations, they are more likely to have careers, businesses and property. And that, financial advisers say, has made them more protective of what they have built. As a result, the prenuptial agreement is starting to lose its taboo.
For generations, the agreements have proven a sticking point for couples who deemed them unromantic. In some relationships, the contracts can signal a lack of trust or suggest that one person is foreseeing an end to the union.
But over time, the equation for when and why two people should marry has changed. In the 1970s, about 8 in 10 people had married by age 30, according to a U.S. census report. In 2016, that same percentage wasn’t reached until age 45.
Millennials are also less inclined to get married while they’re young and broke. More than half of people in their 20s and 30s say it is important for them to be financially secure before they get married, according to a 2015 survey by Allstate and the National Journal.
That increases the chance that when two people tie the knot, each will have a career or business that they want to protect, financial advisers say. In 1975, about 43 percent of women were stay-at-home moms or homemakers, according to the census report. In 2016, only 14 percent of women were home full time.
Now, some couples are using prenups as a way for each person to protect any assets they accumulated — be it a modest condo or a promising start-up. The agreements can also help people protect future income at a time when it’s not unheard of for a popular smartphone app to bring sudden wealth or for a successful side gig to turn into a full-blown business.
And in the era of rising student loan debt, prenups have emerged as a way for couples to say upfront how they would like to separate their debt loads in the event of a divorce.
“Kids today are saying, ‘How do I protect my ideas?’ ” said John Voltaggio, a wealth manager at financial firm Northern Trust who has noticed an increase in the number of young couples interested in prenups. “They’re not shy about talking to their fiances about it.”
A 2016 survey from the American Academy of Matrimonial Lawyers, a trade association for divorce lawyers, found that 62 percent of members saw an increase in the number of couples seeking prenups over the past three years. And 51 percent said they noticed more millennials asking for the agreements.
Prenuptial agreements are a relatively modern concept. It was only within the past 25 years or so that the contracts became widely accepted in most states, coinciding with the rise of divorce, said John Slowiaczek, president of the American Academy of Matrimonial Lawyers.
Prenups also have evolved as relationships have changed. In the ’70s, when couples generally married younger, prenuptial agreements were mainly used for estate-planning purposes, Slowiaczek said. And more commonly, those were situations where one partner had significantly more wealth or stood to inherit money.
But prenups aren’t only for the rich. As young people have become more likely to delay marriage until they are more financially secure, prenups also have become a way for partners to protect their assets and future income, Slowiaczek said.
They’re also emerging as a tool for dividing debt loads. About 41 percent of couples had student loan debt in 2013, compared with 17 percent in 1989, according to the census report. The size of that debt burden is growing as college becomes more expensive.
New college graduates left school with an average $30,100 in student loans in 2015, more than triple the average debt load of $9,400 in 1993, according to the Institute for College Access and Success, which tracks student loan debts. In situations where one partner has significantly more debt than the other, a prenup can detail who would be responsible for paying that debt should the two divorce, Slowiaczek said.
Some couples are still using prenups for more traditional reasons. Christopher Lee, 29, talked to his parents and then his fiancee about a prenup within days of his proposal. Lee said he knew the agreement would be important for his parents, who have a pharmaceutical consulting business and want to make sure any assets they pass along to their children would stay in the family in the event of a divorce.
Lee said that he views the agreement as a form of “insurance” to keep his parents at ease and that his fiancee is “totally on board.”
They’ll finish the paperwork before they say their vows near Denver in August — and they hope to never have to use it, he said.
To be sure, prenups are still off limits for plenty of couples. Some people view the agreements as the first step to a divorce.
The contracts may also not always make sense for two people with similar financial situations.
Tyler Dolan, a 29-year-old financial planner who works mostly with millennials, said the clients he works with are more preoccupied with paying down loans and opening 401(k)s than signing prenups. But the issue comes up with people who have been married previously or who have children from a prior relationship.
Some couples are turning to legal agreements after getting married to lay out how they would divide any property, savings and debt accumulated after tying the knot.
Phoebe Gavin, 30, didn’t sign a prenup when she married her husband six years ago. But now that the two are planning to invest in several rental properties, they have agreed to draw up a postnuptial agreement.
The document, which they hope to formalize before they buy their first investment property at the end of next year, will lay out a plan for how they would divide their properties if they ever decided to separate. Gavin broached the topic before the two bought their first home in March, when she realized there could potentially be hundreds of thousands of dollars on the line, if not more.
“It’s just on my mind that we should be really smart about all of our real estate investments,” Gavin said. “Marriage is a financial decision, and divorce is a financial decision, and we should be smart about that.”