Fifty years ago, people would have thought very little of a couple who fits this description:
Two romantically involved individuals, both employed but with separate finances, unmarried but cohabitating.
Today, that describes most young couples. With the trend moving quickly in the direction of later-in-life marriages and increased income equality, many young couples are bucking traditional trends and opting for separate bank accounts. The reason cited by most young couples for this movement away from joint accounts: celebration of individual financial contributions to the relationship.
Women make up close to half of the workforce today. Those women are either of the generation, or only one generation removed, from the 1974 Equal Credit Opportunity Act allowing women to take a line of credit without the approval her husband or father.
With men still paid more for the same work, it’s no wonder that modern couples are maintaining separate bank accounts. Further, a growing number of new marriages involve prenuptial and postnuptial agreements to protect and celebrate this newfound financial independence.
What is a postnuptial agreement?
If you know what a prenuptial agreement is: an agreement entered into prior to marriage, I bet you can guess what a postnuptial agreement is.
You guessed it, a postnuptial agreement is an official document entered into after marriage which designates how to divide the couple’s assets in the event of a divorce or separation.
You could argue that this lacks romantic appeal, or that the suggesting spouse may have ulterior motives. Alternatively, you could argue that couples entering into a postnuptial agreement recognize that financial tension is a leading cause for marriage failures and that a postnuptial agreement can put those concerns to bed.
What a postnuptial agreement does:
- Help determine which spouse owns which assets
- Provide some groundwork for how to negotiate probate issues
- Specify that one spouse's student loan debts aren't joint marital debts
With financial separation in the present and the future, many young couples can see their partner as an equal contributor, helping them to avoid the pitfalls of many who have come before them.