Just a few years out of college, Zack is pulling down a six-figure salary working at a hedge fund and dating a girl he thinks he’s going to marry. His friends are pushing him to get a prenup.
“It’s not falling in love and getting married because you want to grow a life with somebody anymore,” he says. “People are starting to look at marriage like a business relationship. It’s sort of amazing to think that it’s taken until this century to realize that’s what it really is.”
It’s not that he doesn’t love his girlfriend, or understand the psychological benefits of starting a life together on equal financial footing—“One hand washes the other,” he says. But he’s heard plenty of divorce horror stories, not just about the Ron Perelmans and Ellen Barkins of the world, but about the bankers, traders, and finance guys in his midtown office building. And he’s too practical to ignore the risk of losing more than a hundred grand in liquid assets if things turn ugly at a later date.
To test the waters, he casually brought up the issue of a prenup with his girlfriend recently. Her reaction: “Shock.” If Zack really wanted the prenup, she would go along with it, she told him. But she would never tell anyone about it. Not even her parents.
Prenups are a difficult, embarrassing thing to discuss, admits Zack, who asked that his name be changed for that reason, but the conversation is becoming more and more common among his peers in the financial sector. Traditionally the exclusive province of billionaires or serial spouses looking to protect the inheritances of their children from previous marriages, prenups are now attracting young, successful professionals like Zack who are marrying for the first time and looking to protect assets that are in the six figures rather than the sevens. Broad-based statistics on the secretive, spouse-to-spouse agreements do not exist, but divorce lawyers and marital therapists point to a boom in this new kind of prenup-seeker. The Equality in Marriage Institute, a nonprofit that advises couples, reports that the number of prenup inquiries it received more than tripled from 2003 to 2005, to 5,000 a month.
“Everyone is hedging their bets,” says Bernard Clair, divorce attorney to fashion designer Carolyne Roehm and socialite Jocelyne Wildenstein. Clair says his prenup business has more than doubled in the past five years and that a third of his clients are now couples entering their first marriages. “It’s almost like there’s a split-personality syndrome that’s going on with the younger prenup couples right now,” Clair says. “It’s equal parts optimistic hope and resigned pragmatism. They’ve seen what divorce’s destruction can do, and they want to armor themselves to avoid any collateral damage.”
In fact, one of the reasons younger couples are seeking prenups is that it’s nearly impossible for New Yorkers to maintain an it-won’t-happen-to-us attitude: The divorce rate in New York State is nearly eight times higher than the national average.
Another factor driving the prenup boom is that couples are waiting until they’re older to marry—the average age in New York City is between 30 and 34—which means they’ve had time to acquire more wealth. “There’s so much money around, and so many divorces, when you put the two together, you get an explosion,” says attorney Robert Stephan Cohen, who has counseled Mayor Bloomberg, Uma Thurman, and James Gandolfini through their divorces. In the past month, Cohen says, he was retained by five clients for prenups: two Wall Streeters (an investment banker and a trader), a commercial-real-estate broker, a female advertising executive, and a family heir—all in their mid-thirties, all getting married for the first time.
Young couples are also asking for prenups to protect future wealth. New York is one of only a few states to allow potential future earnings tied to professional licenses or partnerships or degrees to be deemed marital property. Alton L. Abramowitz, chair of the New York City Bar’s matrimonial committee, says this is why he would never let his daughter, Blythe, get married in New York without a prenup. She wants to become a famous singer one day, and at 12 years old, she already sings with a local opera company. Blythe could be subject to an enhanced earnings claim someday, says Abramowitz. “I wouldn’t want anyone entitled to half of her talent.”
Personal wealth isn’t all that’s at stake. One of Bernard Clair’s clients is a 28-year-old attorney making $180,000 a year and on the path to making partner at one of the city’s largest firms. The client’s reason for getting a prenup isn’t to control the amount of alimony his wife-to-be should receive if they got divorced, Clair says. His primary motivation is to protect his firm against a barrage of discovery motions. “Companies often send off-the-radar messages to their partners and managing directors to avoid exposing the company to a carpet-bombing of documents,” he says. “That means executing a prenup that specifically keeps the company out of the matrimonial mix.”