In the event of divorce – statistically, the reality for nearly half the marriages in America – a prenuptial agreement has the potential to save the divorcing couple anguish, arguments, and thousands of dollars. It may represent an exit agreement far closer to their wishes than the court-ordered divorce. A good prenuptial agreement can even exert a positive force on a healthy marriage.
Yet only five to 10 percent of marrying Americans get prenuptial agreements.
Heather Mahar, a fellow at the John M. Olin Center for Law, Economics, and Business at Harvard Law School, and 2002 graduate of Harvard Law, counts herself among the remaining 90 percent. Unmarried and not even engaged, she’s clear that if a future fiancé requested a prenuptial agreement, she’d reconsider the partnership. Still, Mahar has spent the past year trying to understand why more couples don’t get prenuptial agreements.
Her study, which she’s submitted for publication in several journals, confirmed her suspicions: People are falsely optimistic about the success of their marriages, and they fear that requesting a prenuptial agreement would signal uncertainty about a marriage.
Mahar found that although respondents to her survey correctly identified the national divorce rate at approximately 50 percent, they believed their own chance of divorcing was just 11.7 percent. The more optimistic a respondent was about the enduring success of his or her marriage, the less likely he or she was to consider requesting a prenuptial agreement. “Just like everyone thinks they’re a better-than-average driver, everyone thinks that there’s no way their marriage will end in divorce,” says Mahar.
Fear of what she calls “signaling” was also prominent: 62 percent of those surveyed thought that requesting a prenuptial agreement sends a negative signal about the future of the marriage. From the gossip pages (think Ben Affleck and J. Lo) to ordinary folks, fear of signaling seems to deter couples from discussing an exit plan as they enter marriage. Mahar is no exception.
“If my boyfriend suggested it to me, I would probably leave,” she admits. “It’s like you’re planning for divorce. It signals that you think there’s a positive probability for divorce.”
From skepticism to advocacy
Mahar began her study more than a year ago as an assignment for a class to do a survey of her fellow law students and find empirical results. She decided to look at prenuptial agreements, she says, because as she entered her mid-20s, she found marriage on her mind, or at least on the minds of many of her classmates. And her undergraduate studies in economics instilled in her an enduring interest in human behavior and how it deviates from rational behavior.
With pronounced findings, she sought to extend her survey beyond law students who, she assumed, would have a skewed knowledge of a contractual procedure like a prenuptial agreement. Mall shoppers in six cities around the United States gave her a low-cost statistical sample. And while they were in general older, less educated, and more likely to be married than the law students she polled, her findings were remarkably similar.
“I found the same results, which was pretty surprising,” she says. “The things that I thought would be different between the law students and the general population weren’t different.” Both groups accurately pinned the percentage of U.S. marriages that end in divorce near 50 percent. Law students estimated their chance of divorce at 16.55 percent, while the general population believed there was a close to 10 percent chance they would divorce. Signaling data between law students and mall shoppers was also similar: 56.04 percent of law students and 63.7 percent of the general population told Mahar that they would believe divorce was more likely if their partners asked them to sign a prenuptial agreement.
In researching prenuptial agreements, which have been broadly legally enforceable since 1983, Mahar became an advocate of their practical utility. Often considered exclusive to the very wealthy, “prenuptial agreements can go beyond preserving assets before the marriage,” she says. They might dictate custody arrangements, for instance, or decree that despite most states’ “no-fault” divorce laws, the couple agrees to divorce only in the presence of the traditional grounds of fault like abuse, addiction, or imprisonment. “To me, that makes marriage more stable,” she says.
In fact, says Mahar, the division of assets is likely the least compelling reason for average American couples to consider prenuptial agreements, since most couples do not enter marriages with significant assets. But particularly for couples who choose a traditional partnership, with one spouse exiting the workforce to raise children, agreeing in advance about how to divide assets earned during a marriage or potential future earnings can protect the stay-at-home spouse against divorce laws, which have generally eliminated long-term alimony.
“The current divorce laws are really friendly to dual-wage-earning families, but they’re not so friendly to traditional families,” says Mahar, noting that stepping out of one’s career for five or 10 years can have a significant impact on one’s future earning potential. “For some people, the divorce law’s right. But couples are so different that you really need prenuptial agreements to give everyone what they want.”
Like mandatory premarital counseling
Despite – or more accurately, because of – her personal reservations about discussing a prenuptial agreement with a future spouse, Mahar favors mandatory prenuptial agreements. She’s finishing a companion paper that outlines her proposal for such a policy, which she believes will strengthen marriages, not ease their dissolution.
“Heather has come up with important confirmation for why prenuptial agreements tend not to be made,” says Samuel R. Rosenthal Professor of Law and Economics Steven Shavell, director of the Olin Center and one of Mahar’s advisers on the project. “This is an important descriptive finding for scholars in contract law and family law. Moreover, it has significant policy implications.”
Making prenuptial agreements mandatory, Mahar believes, would erase the anxiety that they signal one partner’s preparation for divorce. “To me, this is a state-enforceable way of making couples talk about things, talk through what kind of marriage you want and – it may be harsh to say, but make there be legal ramifications if you veer off that course,” she says. “To me, it’s premarital counseling.”
Mahar envisions a prenuptial checklist for couples to agree on before marrying. It could, she thinks, tap the best of the heady, loving emotions that come with courtship, forcing couples to negotiate some nuts and bolts of the marriage while they’re in the optimistic blush of love, while compensating for the downside of such rose-colored glasses. And although a prenuptial checklist might uncover irreconcilable differences, that may not be a bad thing.
“Maybe if you can’t agree on really important things, you should reconsider,” she says, adding that breaking off an engagement, while painful, is far easier than ending a marriage. “Maybe this would help decrease the divorce rate, particularly among couples who had incompatible preferences and didn’t realize it.”
Her Olin Center fellowship complete, Mahar is heading to Thailand for a month of adventure before settling into work on corporate mergers and antitrust advising with a New York law firm. She hopes her future brings a return to academics and research.
And, in a few years, marriage. For optimism bias and a deviation from rational behavior, Mahar does not need to look far. “I think I have a zero percent chance of divorce,” she says with a laugh.