Boomer Prenups – Sign Now or Forever Hold Your Peace!

August 3rd, 2010

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.

Baby Boomers and Divorce

August 1st, 2010

With high profilers, Al and Tipper Gore announcing they are separating after 40 years of marriage, many Baby Boomers (USA born  between 1946-1964) may be wondering who is left in the ”Happily Ever After” group! 

 

Today’s Baby Boomers are more educated than any previous American Generation and their divorce rate is triple that of their parent’s generation. Break ups among long term married couples are becoming more frequent with longer life spans and the growing  regrettable acceptability of divorce. In 2008, ¼ of all divorces reported were marriages of over 20 years with divorces of couples 55 or older rising moderately.  A longer life span means the possibility of a new relationship, and opportunities for repartnering after age 55 are greater than they used to be.

 

The top three reasons for long term marriage dissolutions are Abuse, Infidelity, and Money Control Issues. Another rising issue is couples who have been married for decades. Baby Boomers start taking their marriages for granted and are focusing on different issues until it is too late to seek a reconnect with their estranged spouses. These break ups are referred as “Cold Divorces” characterized by isolation, distance and disengagement and are usually a product of a gradual buildup. Empty Nester divorces are also on the rise, since the spouses no longer have their children to hold the marriage together. An AARP survey of older divorced couples found that two-thirds (2/3) of the divorces were initiated by the woman, frequently to the surprise of the man.

 

A recent poll was conducted by the National Association of Divorce for Women & Children and the Baby Boomer on divorce.  The results were really startling!  41% of all participants said that dealing with finances, debt and security were the most challenging parts of finalizing a divorce. Asset division was second at 19%, and Custody of the Children was third at 13%.

 

Depicting divorce as an unsettling emotional roller coaster ride, 41% of the participants reported coping skills would have been helpful to cope with the divorce process, 28% reported Stress Management, and failure of Communication Skills was a close third at 26%.

 

Finally, 55% of the participants reported having an amicable relationship with their former spouse. 15% could not be in the same room with their former spouse and only 4% reported they had learned to tolerate the other for the sake of their children! Many expressed sadness, shame and embarrassment for having to divorce.

 

Some warning signs to look out for in a Boomer Divorce are:

  • Spouses who argue at least once a week about money are 30% more likely to get divorced
  • If your parents are divorced, you are 40% more likely to get divorced
  • If both of you have been previously divorced, you are 90% more likely to seek divorce than those of a first marriage.

 

The US Census estimates about half of all marriages end in divorce! As you grow older people change, but to preserve a marriage, the spouses  need to continue working on their Marriage to Keep it Intact!

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