Divorce Insurance, Co-Habiting, Delaying Marriage On Rise

Money can't buy love, but our worries about having enough in the bank might be affecting the way we approach it.

More couples tying the knot are taking precautions to protect themselves financially. A September survey by the American Academy of Matrimonial Lawyers found that 73 percent of divorce lawyers reported seeing an increase in demand for prenuptial agreements over the past five years.

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"I have to believe that the recession has had an effect in that people's finances have been diminished," says Marlene Eskind Moses, president of the association and a Nashville lawyer who's been practicing family law for 30 years. "What they have takes on greater importance."

Moses says she's seen a big rise in requests for prenups among middle-class couples, not just those with substantial assets. Some people want to shield themselves from taking on a spouse's debt; others want to ensure that a pension plan remains in their name only.

Prenups may be growing more popular, but Moses says the conversations surrounding them are as touchy as ever. "It feels like you're trying to take away something from somebody, or you think the marriage is already gonna fall apart," she says, adding that she encourages her clients to think of it as "an estate planning opportunity."

John Logan thinks people should do even more to limit the financial havoc that can be wreaked by a marriage failure. Logan, a 54-year-old entrepreneur from North Carolina, is the creator of WedLock Divorce Insurance.

In 2001 Logan went through what he describes as a "world-class nasty divorce." "My friends called it 'The War of the Logans,' " he adds.

Adding up his lawyer fees and looking over his bank statements, Logan began to wonder: "Why can't you protect yourself from this?" Divorce insurance makes sense from a consumer standpoint, he says, because you're more likely to go through a marital breakup than experience, say, a massive house fire.

Logan teamed up with Prime Insurance Co. to begin selling divorce insurance last month. So far, he says, they've signed up "a handful" of policy owners. It works like life insurance in that customers choose how large a policy they want and pay every month based on that amount. (A calculator on the WedLock Web site can come up with a personalized estimate on the cost of a potential divorce, including expenses like moving, child care, counseling and furnishing a new household. The policies purchased so far, he says, range from $99 to $1,073 per month.)

Customers must be policyholders for at least 36 months before submitting a claim (evidence of divorce) to ensure that people don't enroll with WedLock knowing they're on the fast track to splitsville.

Logan says his company is "not promoting divorce." He hopes eventually to offer a benefit payout to those couples who make it to their 25th anniversary. "We would much rather pay out the claim to people who have a successful marriage," he says.

Logan, incidentally, is engaged to be remarried. Though he believes this one will last, he did become a WedLock customer. Logan says he and his fiancee bought policies for each other.

Divorce isn't a big concern, however, for the growing number of Americans putting off marriage altogether. In 2000, 34.5 percent of 25-to-34-year-olds had never married; by 2009, that number jumped to 46.3 percent, according to a recent Census report.

Sociologists and marriage advocates point out that married people fare better economically than their single counterparts; however, that message may not be convincing to couples facing the steep costs of elaborate weddings in a time of economic turmoil.

Although marriage rates have dropped, more people are choosing to live together. Census takers found that the number of unmarried couples who shared a home rose 13 percent in the past year alone. And that, Moses says, explains the emergence and growing popularity of what she calls a "cohabitation agreement." These legally binding documents can cover everything from real estate agreements to "who takes out the garbage to the frequency of sex or not gaining weight."

And that seems perfect for a time when "for richer or poorer" seems too much to promise.

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