PostNups?

[Pursuinghappiness]

Do stay-at-home moms need a 'postnup'? - TODAY.com

Divorce financial advisor Jeff Landers thinks stay-at-home moms should get a “postnup,” protecting them financially in case of divorce.

[arabian]

Do stay-at-home moms need a 'postnup'? - TODAY.com

Well this certainly would spell things out nicely for a couple contemplating starting a family. I like that the value of work performed by the stay-at-home parent would be acknowledged right from the start. Too often we hear ex's grumble that wife sat at home and did nothing for many years (while raising kids).

I think many people opt for one to stay home because the cost of daycare is so expensive.

[stripes]

I think this is a great idea. I see many younger women falling in love with the idea of being a stay-at-home mom and "being there for my kids", not "having them raised by a daycare" and so forth, never thinking that the price for all this maternal wonderfulness is financial dependence on someone else. As the article states, this is fine while everything is groovy - but if the marriage hits the skids, as it has good odds of doing, the result can be a nightmare. Having a postnup might also be a way to make people think about things they'd rather not think about - what happens in the worst-case scenario? Can I be sure I would be okay?

I see a lot of situations (including on this board) where divorcing people have radically different views of the stay-at-home parent (for the sake of simplicity, let's say it's the mom, though it could just as easily be the dad):

Him: She lounged around at home doing nothing but playing with the kids and watching TV while I busted my ass trying to support us! And now she wants to keep on profiting from me!

Her: I worked around the clock to keep the home running and raised the kids, all so he could climb the corporate ladder! I'm entitled to something in recognition of my work.

With a postnup, neither party could say they didn't understand what they were getting into, or that the stay-at-home situation was something that one person wanted and the other never agreed to. You'd have a lot less rewriting of history going on.

[Rioe]

So could someone sue their partner for breach of contract, if they had agreed to be a hard-working stay at home parent, but instead watched TV all day?

That's the main problem with a marriage contract. Only parts of it are enforceable if someone breaches it, and they could be to the benefit of the person who breached! But at least with a pre-nup or post-nup, you're more aware of that.

[Links17]

This is a great idea, tell somebody in advance that in the event of a divorce you have to support your ex-spouse for half the marriage or more with 40% of your salary and that'll end the SAHM dream. Lack of divorce education is to keep the welfare institution alive as long as possible.

[arabian]

Links if you had to pay full time daycare and/or before and after school care for your kids (no subsidy) how much do you figure you would have had to have paid each month?

[shellshocked22]

Many "justify" SS as saying "but the stay at home" partner raised the kids and maintained the home - think of all the money that saved the "earning" partner.

Economically, for higher income earners, this doesn't wash in my opinion....

-what about the money that the SAHM saved in rent, food, vehicle etc. The above argument implies the "working" partner did nothing. While together, each partner contributed (I'm assuming the stay at home partner didn't fund the other's education, gave up a lucrative job, etc.). However, after divorce, the deal is over. Using this logic, then the lower income partner should "reimburse" the other for free rent, food, etc.

-trust me, for what many of us are paying in SS alone we could hire a live in nanny/housekeeper for a fraction of SS. No offence, but you don't need a PHd to look after kids and maintain a home. Economically, such an occupation doesn't demand a high salary...

-I would have more sympathy if the lower income partner was "kicked out" but when often its the female initiating divorce and demanding SS, its simply government sanctioned extortion. How many people who QUIT their jobs expect to be paid by their employer for half the term of employment ?

Personally, I think in the long run, these rules will HURT lower income people since no one who has high earning potential (and any brains) will go near these people marriage or common law wise. They will be stuck with other lower earning partners.

I think traditionally, higher income earners weren't overly concerned with a partner's income (or lack thereof ) if they cared for the person. NOW, its financial suicide to commit to a partner with much lower earning potential. I guess the upside is that those who DO earn decent income, if they only marry other like earning partners, will then earn incredibly high household incomes....

[FightingForFamily]

My new partner was joking last night that without paying SS, I could buy a new big screen TV every month... and she's right.

[arabian]

I don't think you really understand the contribution the SAHM/F to the family. Nor do you have an idea on the cost of having a live-in nanny (from child's 8 months of age to age 14).

You have pay a nanny a wage and provide a vehicle. You also have to feed this person and have a large enough home for them to have their own suite. A nanny is an employee. You therefore have to pay the employers portion of EI and CPP. [at least a nanny gets CPP/EI whereas a SAHM is not eligible to pay into CPP or EI]. Ideally you would want an English-speaking nanny.

Now if you want to have your house cleaned and your groceries bought for you and your meals prepared you will have to hire a housekeeper or have a maid service come in weekly. If you want shopping done and meals prepared you would have to pay the nanny more to do this. The nanny's responsibilities are general spelled out quite clearly in their contract.

Like any other employee, nanny's do get sick, go on vacation and up and quit on you from time to time. You would need to factor in a daycare/babysitter for these occurrences.

Nannies generally look after the children period. Forget housekeeping and meal service.

I guess it comes down to what your requirements are. You get what you pay for. Do remember that as an employer you are bound to Employment Standards regarding employment of domestic workers.

Oh and nannies do up and quit on you, particularly if they find a better paying job. They are, after all, merely employees.

[FightingForFamily]

If you fire a nanny for breach of contract or any other reason, you don't have to pay them 55% of your salary for years and years. A way better deal in the end.

[arabian]

Then if you want to have children and have them raised primarily by nanny's that is entirely your choice. No you may not pay them a royalty after you discharge them but you can bet you will pay several thousand dollars/month to have them in your employ. Nanny's choose their profession. After one family's children grow up, the nanny moves on to work for another family. She has paid into CPP and is entitled to receive EI. A SAHM does not have this option.

Just for argument's sake let's say the nanny makes 2k a month (including room & board) and use of employer's vehicle. She is in a chosen profession. If she worked for the family for 14 yrs her employer would have paid her approximately 335,000.00. She spends her money as she wishes. Money is not maintained in family coffers.

On the other hand a SAHM's earnings stay in the family. Mortgage is paid off, nice vacations are enjoyed by all. Working spouse can take business trips without worry of child care and mundane tasks such as laundry are miraculously performed. Food is bought and meals are prepared, house is cleaned, and all children's needs are addressed (doctor's appts. etc). Money stays in family coffers.

Something to ponder.

[FightingForFamily]

I pay my ex 2k a month. She took the family car. She got $70,000 from the house. She gets to claim half my CPP and any retirement savings.

We never took any nice vacations, we couldn't afford it ever because we were living on a single income because she was a SAHM. In addition to working full time I participated in the mundane tasks... nothing was miraculously done.

If I had hired a nanny at least I wouldn't have to try and pay for two households instead of one.

The SAHM's earnings didn't stay in the family, she broke the family, took them and left.

Also some things to consider.

[Links17]

.No comparison -
a good SAHM is better than "the help", they do it with love.

However, when you add the cost of:
- Divorce Risk/Liability cost for the earner
- The lost wages of the SAHM

Things are dibfferent, as I have said before though. SAHM only exist because it makes financial sense at the time. People don't factor in the 50% divorce risk. What would an cost/benefit analysis by an actuary yield.

The only time it might work out if the earner makes very little money but in fact the more of a difference between the earner (I.e: earner is a baller) and non-earner the poorer of a decision it is.

[FightingForFamily]

I'll go even further...

I can hire a prostitute for 6 "transactions" on what I paid in support every month. This is a good deal, I can't remember having sex six times a month when I was married.

[arabian]

Look at SS as deferred income then LOL

Fighting - so you would have to add your "six transactions" to your budget if you had a live-in nanny as I don't believe those services are provided.