We’ve discussed how stay-at-home moms can prevent loss of income with financial planning because no matter what happens it is likely that your family will need more money and not less. However, divorce financial advisor Jeff Lander poses a provocative question on Today.com: Do stay-at-home moms need a ‘postnup?’
While a prenup covers a division of finances in case of divorce, a postnup “clearly specifies how you would be compensated for forfeiting your highest-earning years should the marriage end in divorce.”
As Landers discusses, women often leave the workforce to have children at a time with their earning potential is at its highest. Even if they don’t leave during the years when would have earned the most, the act of leaving makes it likely that when they return they won’t have the connections or seniority to return to or exceed their previous earnings.
Landers thinks that such agreements can foster greater harmony since “ [a] postnup clearly defines the issues surrounding your decision to leave your job, it’s likely you’ll find it strengthens your marriage [and] can blunt future disagreements and will form the basis for continued constructive dialogue about your family finances.”
Whether you agree with this line of reasoning or not, you can surely see the need for financial planning if you are or intend to become a stay-at-home spouse. In decades past, many families expected to live on one person’s salary but it is more difficult to do so today. In addition to divorce, other life events like a disability, death, or natural disaster can cause financial strain.
And since you may need someone else to help you consider the bigger picture, consider a Fee-Only financial planner like Claire Emory, MBA, CFA, CFP,—someone who is dedicated to helping people, and women especially, take care of themselves and the people they love.