A recent survey conducted by TD Bank reveals a significant shift in attitudes towards prenuptial agreements among younger Canadians. In a departure from traditional views, 51% of Gen Z respondents indicated they would want their partner to sign a prenup before entering a marriage or common-law relationship. This figure starkly contrasts with the national average, which stands at 28%. The findings suggest a growing openness to discuss financial considerations in romantic relationships, reflecting changes in societal values and economic realities.
Changing Norms in Relationships
The cultural landscape surrounding marriage has evolved considerably since the 1990s. Jeet Dhillon, senior portfolio manager at TD Wealth Management, notes that younger Canadians are much more willing to engage in discussions about financial arrangements compared to previous generations. He attributes this trend to a combination of factors, including the increasing age at which individuals marry.
Historically, Canadians married in their mid-20s, but by 2020, the average age had risen to nearly 35. As Alexa Turner, a family lawyer at Resolve Dispute Resolution, points out, this delay in marriage allows individuals to establish their own financial independence and accumulate assets before entering a partnership, leading to a heightened awareness of what is at stake.
Financial Realities of Modern Partnerships
The misconception that prenuptial agreements are only for the wealthy is being challenged, especially among younger couples. Amanda Baron, co-founder of Jointly, an online prenup platform, explains that financial dynamics have shifted dramatically since the 1990s. In 1976, only 35% of mothers aged 25-54 were employed; today, that figure has surged to around 80%.
Baron likens modern marriages to mergers rather than acquisitions, as both partners typically arrive with their own assets and financial backgrounds. This change in economic power dynamics encourages couples to view prenups as a way to ensure fairness and clarity from the outset.
The Practical Aspects of Prenups
Prenuptial agreements are not merely for the affluent; they serve a broader audience. Turner emphasises that anyone entering a relationship with real estate or significant assets should consider consulting a lawyer about a prenup. Additionally, individuals with children from previous relationships or those expecting financial support from parents may also benefit from having such legal protections in place.
Baron highlights that prenups can clarify financial obligations, thereby reducing potential conflicts in day-to-day financial management. Younger generations increasingly regard these agreements as a form of insurance, ensuring that their relationship is built on transparency and mutual understanding.
Crafting Effective Agreements
The contents of a prenuptial agreement can vary significantly based on jurisdiction, encompassing everything from asset ownership to shared debts. Baron notes that it is even common to include provisions regarding pets, which have become significant to many couples today. However, agreements concerning future children must be approached with caution, as Turner explains that parenting plans cannot be established for children who have not yet been born.
In the context of inheritance, a staggering $1 trillion is projected to be passed down to Gen Z and millennial Canadians from baby boomers between 2023 and 2026. Many families wish to protect their wealth within the family, making prenups an essential tool for safeguarding these assets.
Initiating the Conversation
Timing is critical when it comes to drafting a prenup. Burry suggests initiating discussions six months prior to a wedding to ensure that the process is not rushed. Both parties will require separate legal representation, and financial disclosures will need to be shared transparently.
When approaching the sensitive topic of a prenup, Turner advises against using the term itself, as it can evoke negative connotations. Framing the conversation around a desire to prevent future conflicts and enhance mutual understanding can help ease any discomfort.
Why it Matters
The increasing acceptance of prenuptial agreements among younger Canadians signifies a broader cultural shift towards transparent financial planning in relationships. As societal norms evolve, couples are prioritising clarity and fairness, ensuring that they are equipped to navigate the complexities of love and finance together. This trend not only reflects changing attitudes towards marriage but also highlights the importance of preparing for the unforeseen challenges that may arise in the future.
