Married couples aren’t the only ones seeking pre nup protection, according to the American Academy of Matrimonial Lawyers.
More couples are skipping marriage but still want the protection of a pre nup, according to a recent report from the American Academy of Matrimonial Lawyers that gives new insight into the legal issues surrounding cohabitation.
The average age for brides and grooms has been rising for years, but the recession has accelerated the trend to delay marriage. Marriage rates have dropped to a record-low rate of 51 percent of U.S. adults ages 18 and older, according to a Pew Research Center analysis of the latest U.S. Census data. In 1960, nearly three-fourths (72 percent) of adults ages 18 and older were married. Couples might be foregoing the ring, but many still want the pre nup.
A growing number of unmarried couples are creating cohabitation agreements, which provide similar protections to a pre nup. A cohabitation agreement is a legally binding document that addresses such issues as protection of assets, and child custody and support.
“We’ve seen a real dramatic increase. A lot more people are delaying or foregoing marriage and people are realizing as you get older, you have more things to protect,” Ken Altshuler, president of the American Academy of Matrimonial Lawyers, said in a statement.
Affluent investors have also demonstrated a growing appreciation for the benefits of a pre nup. More than 45 percent of Millionaire investors surveyed by Millionaire Corner in May said they would recommend a prenuptial agreement for someone getting married today. At the same time, only 5 percent of Millionaires, who are generally at or nearing retirement age, obtained a pre nup before their own wedding.
The benefits of a pre nup or cohabitation agreement include protection against an ex’s debt. The agreements can be particularly valuable for couples who buy a house and start a family together. By defining how assets and debt are to be divided, and how child custody and support is to be awarded, an agreement can save “years of litigation,” Altshuler said.
Nearly two of every five divorce attorneys surveyed by the American Academy of Matrimonial Lawyers said they have seen a rise in cohabitation agreements between unmarried couples over the past five years. The vast majority of the couples (70 percent) were heterosexual. Accompanying this trend is an increase in court battles between live-in couples, according to the academy.
What else can couples do to live in financial harmony? Even better than a pre nup, according to Millionaire investors, is outlining financial goals, expectations and values before setting up house.