Maybe you made your first million in a crowdfunded start up, and now you’re working with venture capitalists on your next big idea. If marriage is on your event horizon, do you need a prenup?
Not every tech-savvy entrepreneur makes millions, but many millennials are finding themselves in the right place, at the right time, with flush bank accounts. If that’s the case, says CT Post, in “Millennial Millionaires and Their Prenups-What They Need to Be Thinking About,” they need to think very seriously about having a prenup. Not very romantic? No, but with a lot to lose, you want to protect both spouses.
The use of prenups has increased five times in the past two decades for millennials, according to the American Academy of Matrimonial Lawyers (which defines millennials as those ages 18 to 34). Celebrities like Kylie Jenner and Justin Bieber have signed premarital agreements with their partners, and many young marrieds active in the startup world think that premarital agreements are a wise move.
A prenup lets entrepreneurs protect what they have worked so hard for. Up-and-coming millennials and entrepreneurs are waiting longer to get married. As a result, they typically have more assets, accumulated wealth from a 401(k) and stock options and possibly real-estate ventures. They could potentially lose a lot of what they've earned if a prenup isn’t put into place.
They also need to protect their intellectual property, and the very idea of a business has to be protected. For example, with Kylie Jenner and her makeup line, she decided to shield what assets she has now and those she’ll accumulate throughout her marriage. By doing this her business won’t be communal property subject to a marital separation agreement or divorce.
If you think a prenup is good for you and your fiancé, remember these guidelines:
Work with a business attorney. Your legal counsel must be business savvy and understand how to best plan for future contingencies. And each party has to have their own separate attorney for a prenup to be valid.
Plan ahead with a prenup. Don’t start arranging for a prenup a month before your wedding. If you have significant assets, it will take some time to draft.
Look at the details. Determine if your partner has offshore accounts. It also matters where you will reside. Some techies, originally from China or India, have international attorneys, which increases the time required to draft and finalize an agreement.
Every prenups is unique. There’s no one size fits all. There are many variables and they’re unique to each relationship.
Still not convinced? Imagine yourself suddenly single, with a demanding 24/7 job, children to raise and a house to run. If that would work better with a plan in place, then you need a prenup.
Reference: CT Post (November 5, 2018) “Millennial Millionaires and Their Prenups — What They Need to Be Thinking About”