prenups versus divorce insurance

Divorce Insurance V. Prenuptial Agreement

Goldberg Jones Prenuptial Agreement Leave a Comment

Life is filled with uncertainty and that uncertainty has been answered with insurance. Auto, home, life, even pet insurance are all readily available to protect and safeguard you, your family and your belongings —but what about protecting your marriage?

SafeGuard Guaranty Corp, based in North Carolina began offering divorce insurance in 2010. The company’s website states that the company is not selling new policies at this time but they are “actively looking for underwriting relationships that will help us re-launch and move to the next phase which will also provide for a long term ‘Successful Marriage Benefit’ for those policy holders that do not divorce, thereby financially incenting them to stay married.

While “divorce insurance” is a novel idea, there are a few practical things you can do to safeguard your assets and rights without an underwriter. As divorce attorneys, we have witnessed the end of numerous marriages first hand and have developed a few suggestions to protect you from financial and emotional devastation in the event of divorce.

Expecting the best but planning for the worst can be applied to a lot of life’s milestones and marriage is no exception. In our legal practice, we have found that a solid prenuptial agreement does a better job of protecting your rights and assets —and in most cases is less expensive— than SafeGuard’s divorce insurance.

It is common for people to dismiss prenuptial agreements as something reserved for celebrities and the ultra-wealthy, but they are a smart move even if you aren’t on the Hollywood A-list or have a seven-figure net wealth.

If you are entering your marriage with no assets, no children, and don’t anticipate a significant increase in income during your marriage, foregoing the prenup might be an option. However, if you can answer yes to any of the following situations, a prenuptial agreement will help protect your rights in the event of divorce.

  • Do you own a business?
  • Do you own real estate?
  • Do you have investments or retirement accounts?
  • Will you be supporting your spouse through college or university?
  • Do you expect your income to increase significantly during your marriage?
  • Do you have children from a previous relationship?

Even if your assets are modest, creating a prenuptial agreement has several benefits beyond outlining who gets what if the marriage should end. Evaluating you and your spouse’s assets, educational and career goals, and other financial issues prior to marriage can give your relationship an advantage.

Money and finances are some of the most common points of contention that lead to divorce. Discussing money matters before walking down the aisle will help you and your partner devise a game plan for tackling financial issues throughout your marriage, and hopefully, you will never need to put your prenup to use.

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