Many people my wife’s and my age have shared the experience we enjoyed recently on a Saturday evening: a handsome young man, well established in his business field, greeted his successful, beautifully attired bride at the altar as they calmly repeated their wedding vows without the fear and trembling that my generation almost universally experienced under the same circumstances. The difference? The couple’s seven additional years of age – and their accompanying financial stability—were enough to supply both the bride and groom with the steadiness so lacking in so many of the weddings of earlier generations.
Eleanor Barkhorn wrote in an article for The Atlantic that the average age for Americans getting married increased by seven years from 1960 to 2013.1 Ms. Barkhorn quoted an academic survey saying that college-educated women have largely benefitted from marrying later. Specifically, she explained that the average income for women who attended college and married after the age of thirty earn fifty-six percent more than women with college degrees who married before age twenty.
While brides and grooms may marry more comfortably when tenure is tolled and assets accounted, success brings its own perils to the pulpit.
“Divorce attorneys have a special name for financially comfortable couples who marry without any planning ahead of their vows,” explains Kevin Gibbs, an Anaheim attorney who is Board-Certified as a Family Law Specialist in California.
“We call them ‘Inventory.’ You might consider them more confident at their weddings, but family law attorneys know that their confidence is often a stone castle built on a foundation of sand.”
What kind of planning does Gibbs recommend for the well-shod marrieds-to-be?
“There are two answers to this question,” explains Mr. Gibbs. “If the couple has concerns about both their assets and their income in the event of a divorce, then they need to talk about a Premarital Agreement, or a PMA. These allow for an agreement that will address both who owns what and who pays whom if there is a disparity between their incomes.”
“However,” Kevin goes on, “A trust can allocate and specify who owns which assets just as well as a PMA, so if there isn’t any concern about income disparity, a trust will usually suffice.” Gibbs smiles before he adds, “And the father-in-law doesn’t get testy about why a groom is generating a document to cheat his little princess. Instead, his new son-in-law becomes a prince who is doing right by the Apple of Daddy’s eye by setting up a trust to protect her.”
Given a choice between a document which smacks of heavy self-interest (like a Premarital Agreement) or a document which carries the image of a new in-law who worries about his or her duties to the clan (such as a Trust), many advisors recommend foregoing the PMA in favor of a trust for the protection of the assets of both the bride and the groom.
“I’ve never had a couple argue about setting up a trust to protect their assets. They simply sign-off on a document that has three accounts listed for yours, mine and ours,” notes Attorney Gibbs. “On the other hand, there’s always a little extra tension energy in the air on signing day for a PMA. Some people need the PMA, but most well-heeled clients can get by with just a well-written trust.”
Well-heeled or barefoot—couples who come to their wedding with their assets already properly managed will be much more likely to live happily ever after than those who leap before they have looked.