The age-old trope of the prenup only being good for the rich older man to protect against a gold digger is just plain old inaccurate. We’re here to tell you that prenups are good for anyone, not just the wealthy. In fact, prenups are actually extremely important for protecting stay-at-home parents! Why? Because stay-at-home parents typically forgo a career to go full-time homemaker/parent and don’t have their own stream of income. A prenup can ensure that a stay-at-home parent is financially supported in the event of a divorce.
After all, stay-at-home parents contribute just as much to the household (if not more) as their breadwinning counterparts in their services as cleaner, cook, waitress, laundry do-er, boo-boo fixer, bedtime story reader, playtime pal, after-school coordinator, and much, much more.
Ways to support a stay-at-home parent in a prenup
Now, let’s dive into some things a stay-at-home parent might consider negotiating into their prenup in order to feel financially independent and secure, even in the worst-case scenario of divorce.
- Lump sum payment clause
A lump sum payment clause usually says that when the marriage ends, the higher-earning spouse will pay the stay-at-home parent a lump sum of money (which is agreed upon in the prenup). For example, let’s say John (breadwinner) and Jennie (stay-at-home mom) have a prenup with a lump sum clause of $30,000. This means that, upon the marriage coming to an end, John must pay Jennie $30,000. Keep in mind this is not alimony; it’s separate from that. You can have a lump sum clause and alimony.
Some people like to call this clause a “wealth equalization clause” because it attempts to even the playing field in terms of wealth and helps ensure the lower-earning spouse is taken care of.
- Phasing in separate property
Phasing in separate property clauses basically says that certain separate assets will no longer be separate after a certain date. What does this mean? It means that if you hit the specific date laid out in your prenup and then you get a divorce after that date, the property that was previously kept separate via the prenup may now be joint and divisible in a divorce.
For example, Katie and Kevin have a prenup with a phasing-in-separate-property clause that says Kevin’s apartment complex will be considered community property (i.e., joint property) on or after their 20th anniversary. If they get divorced on their 15th anniversary, that apartment complex is still Kevin’s separate property. If they get divorced on or after their 20th anniversary, the apartment complex will be considered community property, subject to division.
The benefit of this clause is that the couple can agree on a certain date that they feel the marriage is long enough to feel comfortable sharing certain assets.
- Leaving in alimony
Another great way to support a stay-at-home mom or dad is to make sure to leave in alimony. Alimony is financial support paid from one ex-spouse to the other in the event of a divorce. Many people want to waive alimony in their prenups (i.e., not be required to pay alimony in the event of a divorce). Waiving alimony is not ideal for a person who is dependent on the other spouse because they will lose out on potential financial support after the marriage ends. And as a stay-at-home parent, they probably do not have their own independent source of income. Alimony would be their source of income until they remarry, die, or until the alimony award ends (depending on the state’s laws).
- Leaving in alimony if children
If the breadwinner spouse is adamantly against leaving in alimony, the future stay-at-home parent can negotiate and ask for alimony only if children are had. If no children = no alimony. Why would having children matter? Well, if one person is staying at home and raising the children, and thereby forgoing a career (a.k.a. giving up a way to support themselves), then allowing alimony may be more “justified” in some people’s eyes.
- Primary residence
A primary residence clause in a prenup allows one person to remain in the marital home for a period of time while the divorce is pending and after the divorce is final. This is super beneficial to stay-at-home parents because the stay-at-home person can make sure they have a roof over their head and somewhere to continue raising the children while the divorce plays out. This is an excellent way to ensure that the stay-at-home parent is supported.
Note: a primary residence clause does not typically change ownership of the house; it simply allows one person (usually the stay-at-home parent) to remain in the home for a set period of time.
For example, Tracy and Tommy are married. Tracy is a stay-at-home mom, and Tommy is a doctor. They have a prenup that says Tracy can stay in the marital home for a period of up to one year after the divorce is finalized. This allows Tracy one year to remain in the home with the children and figure out her plans going forward. (Of course, you can negotiate whatever period of time you wish, it could be one year, it could be six months or six years.) Now, let’s say this home is actually Tommy’s separate property. It will still remain his separate property, and after the time is up, it will return to Tommy’s possession (or be handled however the prenup dictates it is handled).
- Property division
Another way to support a stay-at-home parent is through property division. For example, many couples choose to keep everything separate in their prenup, their assets, income, inheritances, appreciation of assets, etc. What can be negotiated into a prenup is a property division plan that doesn’t leave the stay-at-home parent without assets. For example, let’s say Mark and Melissa have a prenup. Mark wants to make sure to support Melissa, even in the event of a divorce, as she is a stay-at-home mom. So, he makes sure that he keeps his real estate separate, but any appreciation of the real estate he will share with her in case of divorce. In addition to that, he also does not keep his income separate; he also makes sure that his income is “shared” (i.e., marital/community property).
As you can see, Mark could have marked appreciation and income as separate property to keep it separate from Melissa in a divorce, but instead, he allowed those two things to become marital and divisible in a divorce. He still gets to keep his principle on his original real estate investment but shares all of the appreciation on the house that occurs during the marriage. And any income earned during the marriage will also be shared, as well.
- Contributing to separate bank account during marriage
Another way to provide for a stay-at-home parent is by having the wealthier spouse make payments to the stay-at-home parent’s separate bank account.
How it works is this:
- In the prenup, the stay-at-home parent ensures Bank Account A is her separate property.
- They agree that the wealthier/breadwinner spouse will contribute $X to Bank Account A each week/month/year.
- In the event of a divorce, Bank Account A has been deemed the stay-at-home parent’s property (thanks to her prenup) and it has been growing for the duration of the marriage, thanks to the breadwinner spouse’s contributions that they both agreed upon.
- Protecting against debt
Including a clause in a prenup about debt is not going to make you any money, but it will prevent you from becoming in debt for things you didn’t do. A stay-at-home parent can protect themselves from taking on any of their spouse’s debt via prenup. For example, let’s say the breadwinner spouse is a serial entrepreneur, always taking out business loans and other lines of credit during the marriage. It would be incredibly important for a stay-at-home parent to ensure that none of that debt falls on them in a divorce!
- Protecting any inheritances
Last but not least, if the stay-at-home parent is the heir to any inheritances, they should definitely be protected in the prenup! The stay-at-home parent can ensure the money from their mom, grandma, dad, uncle, etc., is safe and sound in their hands in the event of a divorce. This is another avenue to ensure that the stay-at-home parent is financially supported in the event of a divorce. It would not be ideal for them to have to split up their inheritance with their spouse! And, yes, that can happen without a prenup!
Many people mistakenly believe that prenups are only for the wealthier spouse. It’s just not true! They are for anyone, but they can be especially helpful for stay-at-home parents. Prenups can ensure a lesser-earning spouse is provided for in the event of a divorce while simultaneously protecting some of the wealthier spouse’s assets. Remember, prenups should be a win-win for both parties!
Nicole Sheehey is the Head of Legal Content at HelloPrenup, and an Illinois licensed attorney. She has a wealth of knowledge and experience when it comes to prenuptial agreements. Nicole has Juris Doctor from John Marshall Law School. She has a deep understanding of the legal and financial implications of prenuptial agreements, and enjoys writing and collaborating with other attorneys on the nuances of the law. Nicole is passionate about helping couples locate the information they need when it comes to prenuptial agreements. You can reach Nicole here: [email protected]