In troubled economic times relationship decisions take on a whole new light. Marriage and divorce are not always about being in love – now these decisions are also about financial consequences.
Many couples contemplating marriage are taking financial precautions to protect their assets in case the marriage doesn’t work out. Prenuptials are one of the most common ways for engaged individuals to protect themselves financially, although for some “divorce insurance” provides a different level of financial protection.
Divorce lawyers report an increase in demand for prenuptials over the past five years, according to a recent survey by the American Academy of Matrimonial Lawyers (AAML).
Most individuals have taken a financial beating by the recession, leaving them with not only less in their retirement and savings accounts, but often undervalued houses and real estate. Because finances have diminished, “what they have takes on a greater importance,” says Marlene Eskind Moses, president of the AAML.
An Estate Planning Opportunity
The rise in prenuptial requests is not only coming from those with substantial assets. Moses says she’s seen a big rise in requests for prenups among the middle class as well.
Putting a prenuptial agreement in place can shield you from taking on your future spouse’s debt, or assure that your pension plan remains solely in your name. By entering into a prenup, you are not predestining your marriage to fail – you are simply helping plan for the future.
No Plans for Engagement
According to the 2009 Census report, 46.3 percent of adults ages 25 to 34 remain unmarried. Despite a lower marriage rate, more people in committed relationships are choosing to cohabitate.
For those not engaged or planning to be married, yet living together, there is a growing trend toward “cohabitation agreements.” Such agreements are legally binding contracts that cover, according to Moses, everything from finances and real estate agreements to “who takes out the garbage to the frequency of sex or not gaining weight.”
Source: Divorce insurance, co-habiting and putting off marriage on the rise in downturn