Premarital agreements on the rise, and they're no longer just for the wealthy.
Love is in the air at this time of year, but protecting one’s own assets increasingly is in vogue.
The number of couples signing prenuptial agreements before they take a walk down the aisle is on the rise, according to divorce lawyers. And it’s not just wealthy men requesting them.
About 63% of divorce attorneys said they’ve seen an increase in prenups — agreements aimed at protecting one spouse’s assets from the other spouse in case of divorce or death — over the past three years, a survey of members of the American Academy of Matrimonial Lawyers found last year.
About 43% of the attorneys said they’ve seen an increase in women asking for the agreements.
“It’s really frequent in second marriages, when in many cases someone has gone through a lengthy and costly divorce the first time,” said Maria Cognetti, president of the AAML and principal in an eponymous law firm.
Well-written prenups can make a divorce much simpler down the road and eliminate fighting about certain assets, she said.
Prenups are not just in fashion among the ultrawealthy, either.
“It can be one discrete asset that you want to protect; it doesn’t have to be worth an enormous amount in dollars,” Ms. Cognetti said.
In one instance, she drew up a prenup for a woman who wanted to shield a personal injury settlement she had received a decade ago. Another woman sought to safeguard a business that had been in her family for generations.
Rockie Zeigler, a financial adviser with an eponymous firm in Peoria Heights, Ill., said he most commonly talks to clients about prenups if one half of the couple enters the marriage owning a business, or when one person comes from a very wealthy family.
In one case, a client wanted to protect a cabin that had been in his family for decades.
“He didn’t want to have to sell it if he got divorced,” Mr. Zeigler said.
State laws about marital property and prenups vary.
Ms. Cognetti said in some states a man or woman can retain 100% ownership of an asset during a marriage, but could be required to split the amount that the asset rose in value during the marriage.
Some state laws, including those in Pennsylvania, require that the party with the assets have made a “full and fair disclosure” of what he or she brought into the marriage to make the agreement valid.
Other states, she said, require prenups be signed at least 30 or 60 days before a wedding.
These provisions are aimed at making sure a bride or groom isn’t given the document to sign the night before the wedding as a condition of the event taking place.
The top three items most commonly covered by a prenup are “protection of separate property,” “alimony/spousal maintenance” and “division of property,” according to the AAML survey.
