When it comes to marriage, many couples used to think all you need is love. But with increasingly difficult economic times, many now find they also need a prenuptial agreement. Seventy-three percent of divorce attorneys reported seeing an increase in demand for prenuptial agreements over the past five years, according to a recent survey conducted by the American Academy of Matrimonial Lawyers in September 2010. What may come as somewhat of a surprise is that 52 percent of these attorneys also said they have seen a rise in the number of women initiating these requests.
In order to understand these findings, one must look to the economy. While many once thought prenups were only for celebrity couples or those with substantial assets, prenups have taken on a greater significance for middle-class couples. With the recession having such a negative widespread effect on employment rates and financial savings, couples are now focusing their attention on their assets and how to protect them. For those who have had their finances reduced, what they are left with is of greater importance to them and is worthy of safeguarding.
It is a reality that retirement accounts have been hard hit in the last few years, so people do not want to have their retirement account diminished twice, once when the market weakened and again during divorce. Now, a commitment to marriage often includes the commitment to protect premarital assets, pensions and retirement accounts. Thirty-six percent of the attorneys surveyed agreed that they have witnessed an increase in retirement savings being a part of the prenuptial agreement.
The rise in the number of women initiating prenuptial agreements may be attributed to the fact more women are working outside the house and many have a greater earning potential than their future husband-to-be. Therefore, these women instinctively want to protect what they have worked so hard to earn. On the other hand, many women who leave the job market to become the primary caretaker of a child, may want protections outlined in a prenuptial agreement to ensure they are not left struggling to survive in the even their marriage ends.
Since the divorce rate in America is hovering around 41 percent, it is of no surprise that couples want to plan ahead for their future. Many baby boomers' children are now of marrying age and have experienced divorce in their childhood, so many want to avoid the arguments and problems their parents encountered during divorce. A prenuptial agreement provides a solution to this.
While prenuptial agreements may be gaining in popularity, they will continue to be a controversial topic in any household. Many feel that a prenup creates a level of distrust among the couple which leads to inevitable divorce. A more positive view is to consider marriage as a partnership. In order to have a successful partnership, parameters need to be drawn to define the relationship and address contingencies such as dissolution of the partnership. With this in mind, a prenuptial agreement can also be considered an estate planning opportunity for couples to create more certainty in these uncertain economic times.