Boomer Prenups – Sign Now or Forever Hold Your Peace!
Baby Boomers are increasingly deciding to enter into prenuptial agreements prior to marriage to protect and manage their assets should they part ways through divorce.
What is a Prenuptial Agreement? It is a legal document that establishes in advance how property, assets acquired or received by gift during a marriage and family heirlooms passed from family members to one of the parties will be owned or divided in the event the couple should part ways.
Prenuptial Agreements have become very popular with Baby Boomers (born between 1946-1964) since they have on the average accumulated more money and assets and can afford to pay for adequate protection. Since 2006, 80% of Family Law Attorneys have seen a marked increase in couples who sign prenups, according to a survey sponsored by the Matrimonial Lawyers Group.
In the current financial crisis, with a 31% drop in home values and a 53% drop in stock portfolios, Boomers have been hit the hardest, which has accelerated the trend. Boomers have therefore become more cautious in holding on to their remaining current assets. Boomers are also blending homes and corresponding obligations. Prenups are becoming the Estate Planning Tool of the future!
Given Boomer age ranges, they are more likely to have been married and divorced multiple times. 4 out of 10 Boomers have experienced a divorce and by their 50th birthday, 27% have moved on to a second or third marriage.
So When Should Boomer Couples Consider Having A Prenup?
1. When significant assets are involved such as a home & property, retirement funds, stocks and bonds, or liquid assets.
2. When there are children of a previous marriage. The children’s interest, past and future, need protection since most states by law give the surviving spouse up to half of the estate.
3. When one spouse owns all or part of a business.
4. When one spouse is much wealthier than the other spouse.
5. When one spouse is much older than the other spouse.
6. When one spouse is supporting the other while he or she attain an educational degree.
7. When there is an inheritance involved.
When both spouses feel that the possibility of a divorce and expenses related to it are a bad idea and wish for a premarital binding understanding, what should they do?
1. Hire a qualified lawyer to prepare a fair and binding agreement according to their wishes and needs.
2. Make full disclosure of all property, financial accounts, debts, and assets involved.
3. Comply with requisite state laws.
If one acknowledges that nearly half of all marriages end in divorce, a prenuptial agreement can avoid a number of unnecessary expenses, reduce attorney fees, and avoid state mandated arbitrary divisions.