Explain to me the financial risk of SAH if partner is a high earner

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Assume the following:
Two people have been together for 10+ years and have small kids
Parent wanting to SAH has a professional degree, but earnings likely would never exceed 150K
Working parent has a stable job (think equity partner at law firm) earning 2M+ annually

What is the financial risk of SAH? If they divorce the SAHP will get at least some alimony and half their shared assets earned during the marriage, which would be significant.

I understand the many reasons working is still worthwhile, but it doesn’t seem to me there’s a big financial risk, unless I’m missing something?

This is state-dependent.

But from what I hear from a good friend who is a high-value divorce attorney: one of the big risks is that people in marriages have a very hard time predicting how their spouse will behave in divorce. Even if the law is on your side, spouses often go absolutely nuclear in divorce. The net result is it can sometimes take years to get the money that a SAHM spouse is entitled to, if it is ever found at all. People move money offshore, put it into bitcoin and launder it, ask for bonuses in cash, sell property to relatives at deep discounts, etc. Anything to hide assets that can be done, is done. And they gaslight too (“I didn’t get paid for consulting, just an honarium.”).

You can sometimes uncover this if you have a good forensic accountant but you have to have the cash to hire one. You also need cash to pay an attorney.

In short there is a difference between what you are legally entitled to and what you’d ever see in a contentious divorce.

This makes sense to me.

But this would be true even if the SAHP continued working. If she’s working she has say 100K income to fall back on but still presumably takes a MAJOR lifestyle hit.

Income is not the whole ball game - there's retirement earnings, your own Social Security (despite what might happen in Congress), possibly health insurance.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Seems like a bummer that what's best for the kids never enters into these discussions on this board. Everyone is so obsessed with protecting their own material comfort, and is so distrustful. I mean, honestly, why even get married and have kids if that is your attitude. Just stay single and make and keep your money if that's what you want.

It’s not good for the kids to be raised without assets watching their half siblings live in luxury because their mother didn’t get a post-nip
Before sacrificing her own earning potential.

Once again. Post nups aren’t enforceable.

Why are the in the legal code if they aren’t?

A judge can take it into account if they want.

[Anonymous]

Anonymous wrote:

Anonymous wrote:State mandated levels of child support are very low compared to what it really takes to raise a child. Think bare minimum in terms of food, housing, etc. Also, divorced parent is not legally obligated to pay for tutors, out of network medical care, private school or college nor, in many states, any child support beyond age 18. (Although DC mandates child support until age 21).

This is absolutely not true. The issue is the lifestyle you enjoyed being married. Usually, medical care is split or paid for by one parent and if kids are in private, if the parent can afford it, it's ordered. No one should be ordered to pay for college.

However, at that income OP would get alimony, the issue is if it is life long and 1/2 of everything except if its hidden.

If you have a scummy spouse that would hide money and cheat on you, get out now before its too late.

I am a SAH. I could see how my husband treated his ex and knew what type of person he was so I wasn't worried at all. He makes sure to max out my retirement, and got life insurance in case something happened, and has planned for us, just in case (hopefully there will never be a just in case).

You can’t know this until you are going through the divorce. Women are frequently blindsided. It is so incredibly common.

Also for you personally, you are already at much higher risk because your spouse has already been divorced once. Did he cheat with you? That makes the risk even higher.

I am supportive of being a SAHM (I was one) but being a SAHM in a marriage where the spouse already divorced once is more risk than I would be willing to take on.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Assume the following:
Two people have been together for 10+ years and have small kids
Parent wanting to SAH has a professional degree, but earnings likely would never exceed 150K
Working parent has a stable job (think equity partner at law firm) earning 2M+ annually

What is the financial risk of SAH? If they divorce the SAHP will get at least some alimony and half their shared assets earned during the marriage, which would be significant.

I understand the many reasons working is still worthwhile, but it doesn’t seem to me there’s a big financial risk, unless I’m missing something?

This is state-dependent.

But from what I hear from a good friend who is a high-value divorce attorney: one of the big risks is that people in marriages have a very hard time predicting how their spouse will behave in divorce. Even if the law is on your side, spouses often go absolutely nuclear in divorce. The net result is it can sometimes take years to get the money that a SAHM spouse is entitled to, if it is ever found at all. People move money offshore, put it into bitcoin and launder it, ask for bonuses in cash, sell property to relatives at deep discounts, etc. Anything to hide assets that can be done, is done. And they gaslight too (“I didn’t get paid for consulting, just an honarium.”).

This seems like a really good answer!!

You can sometimes uncover this if you have a good forensic accountant but you have to have the cash to hire one. You also need cash to pay an attorney.

In short there is a difference between what you are legally entitled to and what you’d ever see in a contentious divorce.

[Anonymous]

Do you have a pre-nup? Can you afford as good a lawyer as your dh? If he does something terrible, can you afford to leave him and support yourself while the legal battle plays out? Do you have life insurance and assets? If he dies and the earnings stop, will you be ‘set for life’?

[Anonymous]

There’s also the risk that the dh gets bored - I’ve seen it happen where when the kids are a little older they have zero in common w sahw and much more in common w career women - esp at high net worth. So risky

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Seems like a bummer that what's best for the kids never enters into these discussions on this board. Everyone is so obsessed with protecting their own material comfort, and is so distrustful. I mean, honestly, why even get married and have kids if that is your attitude. Just stay single and make and keep your money if that's what you want.

It’s not good for the kids to be raised without assets watching their half siblings live in luxury because their mother didn’t get a post-nip
Before sacrificing her own earning potential.

Once again. Post nups aren’t enforceable.

Why are the in the legal code if they aren’t?

A judge can take it into account if they want.

https://www.cgglawyers.com/asset-protection-do-you-need-a-postnuptial-agreement-virginia/

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:NP. My sister didn’t quit working, despite her desire to and her husbands desire for her to, until they could put 5M explicitly in her name (they have over 10 M in assets). That seems low risk to me.

If the working parent is making 2M and you have 6M in assets (all earned during the marriage, so half or close to half would go to SAHP) I don’t see the risk.

That dude is a sucker! And she is obviously a selfish gold digger. OP, there isn't really much of a risk for the SAH parent because the high earner is making a boatload of money. I can see how it could be risky when you are talking about middle class incomes, but in that situation it becomes risky for both partners.

He may not be that much of a sucker as you think. Depending on the state and what exactly he did to put the money in her name, it is possible it is not hers alone. Just changing a name doesn’t necessarily change the marital asset status in some states, for instance.

Also, stop it with the rank misogyny.

I bet you accuse a lot of people of being misogynists and racists. It's kind of funny that OP thinks that she is the one with a lot to lose LMAO

[Anonymous]

Your high earning spouse could also die before you are able to accumulate a sufficient nest egg. They could also become disabled and require expensive care that drains your assets.

[Anonymous]

Anonymous wrote:

Anonymous wrote:State mandated levels of child support are very low compared to what it really takes to raise a child. Think bare minimum in terms of food, housing, etc. Also, divorced parent is not legally obligated to pay for tutors, out of network medical care, private school or college nor, in many states, any child support beyond age 18. (Although DC mandates child support until age 21).

This is absolutely not true. The issue is the lifestyle you enjoyed being married. Usually, medical care is split or paid for by one parent and if kids are in private, if the parent can afford it, it's ordered. No one should be ordered to pay for college.

However, at that income OP would get alimony, the issue is if it is life long and 1/2 of everything except if its hidden.

If you have a scummy spouse that would hide money and cheat on you, get out now before its too late.

I am a SAH. I could see how my husband treated his ex and knew what type of person he was so I wasn't worried at all. He makes sure to max out my retirement, and got life insurance in case something happened, and has planned for us, just in case (hopefully there will never be a just in case).

The bolded makes me think you’re naive. There’s no such thing as “maxing out retirement” when you don’t have a job. He may be able to put $7k in a Roth, but only if you’re not a high wage earner and in that case, you shouldn’t be staying home. Now if you mean you save in brokerage accounts in only your name, then okay. But that’s not maxing out retirement.

Maxing out retirement is contributing the full 22,500 amount in 2023 plus any company match.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The way I've seen this play out is that the high earner spouse limits the funds that the lower earning spouse has access to during the divorce, then they hire a shark and slow the process down, so it could take years for c/s and alimony to be decided and during that time the low-earner is also racking up high legal bills. Additionally, I know a number of cases where the high earner threatened to pursue full custody with their endless resources and got the low-earner to settle for less in exchange for 50/50.

Person with divorce attorney friend here. This is exactly right, and unfortunately common.

The thing is, anyone who has the competitive drive to earn millions of years also is more likely to see divorce as a zero sum game battle. And they will fight hard.

THIS!!!!!!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:State mandated levels of child support are very low compared to what it really takes to raise a child. Think bare minimum in terms of food, housing, etc. Also, divorced parent is not legally obligated to pay for tutors, out of network medical care, private school or college nor, in many states, any child support beyond age 18. (Although DC mandates child support until age 21).

This is absolutely not true. The issue is the lifestyle you enjoyed being married. Usually, medical care is split or paid for by one parent and if kids are in private, if the parent can afford it, it's ordered. No one should be ordered to pay for college.

However, at that income OP would get alimony, the issue is if it is life long and 1/2 of everything except if its hidden.

If you have a scummy spouse that would hide money and cheat on you, get out now before its too late.

I am a SAH. I could see how my husband treated his ex and knew what type of person he was so I wasn't worried at all. He makes sure to max out my retirement, and got life insurance in case something happened, and has planned for us, just in case (hopefully there will never be a just in case).

You can’t know this until you are going through the divorce. Women are frequently blindsided. It is so incredibly common.

Also for you personally, you are already at much higher risk because your spouse has already been divorced once. Did he cheat with you? That makes the risk even higher.

I am supportive of being a SAHM (I was one) but being a SAHM in a marriage where the spouse already divorced once is more risk than I would be willing to take on.

No, he didn't cheat. She cheated and went to live with her AP. We got together many years after the divorce. Not all men cheat. Very low risk. The bigger concern is death vs. divorce.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:State mandated levels of child support are very low compared to what it really takes to raise a child. Think bare minimum in terms of food, housing, etc. Also, divorced parent is not legally obligated to pay for tutors, out of network medical care, private school or college nor, in many states, any child support beyond age 18. (Although DC mandates child support until age 21).

This is absolutely not true. The issue is the lifestyle you enjoyed being married. Usually, medical care is split or paid for by one parent and if kids are in private, if the parent can afford it, it's ordered. No one should be ordered to pay for college.

However, at that income OP would get alimony, the issue is if it is life long and 1/2 of everything except if its hidden.

If you have a scummy spouse that would hide money and cheat on you, get out now before its too late.

I am a SAH. I could see how my husband treated his ex and knew what type of person he was so I wasn't worried at all. He makes sure to max out my retirement, and got life insurance in case something happened, and has planned for us, just in case (hopefully there will never be a just in case).

The bolded makes me think you’re naive. There’s no such thing as “maxing out retirement” when you don’t have a job. He may be able to put $7k in a Roth, but only if you’re not a high wage earner and in that case, you shouldn’t be staying home. Now if you mean you save in brokerage accounts in only your name, then okay. But that’s not maxing out retirement.

Maxing out retirement is contributing the full 22,500 amount in 2023 plus any company match.

We're not eligible for a Roth. Yes, I have money in my name only. We also have good college funds and a paid-off house. Plus life insurance. I was not a high earner and hated my job,

[Anonymous]

Anonymous wrote:The way I've seen this play out is that the high earner spouse limits the funds that the lower earning spouse has access to during the divorce, then they hire a shark and slow the process down, so it could take years for c/s and alimony to be decided and during that time the low-earner is also racking up high legal bills. Additionally, I know a number of cases where the high earner threatened to pursue full custody with their endless resources and got the low-earner to settle for less in exchange for 50/50.

I’ve seen this too. Don’t assume you would be able to get your money. Once it gets to divorce, all bets are off.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:State mandated levels of child support are very low compared to what it really takes to raise a child. Think bare minimum in terms of food, housing, etc. Also, divorced parent is not legally obligated to pay for tutors, out of network medical care, private school or college nor, in many states, any child support beyond age 18. (Although DC mandates child support until age 21).

Anyone who earns a decent income and pays child support knows this is BS. And if your income is approaching 1 million, you are getting hosed in most states. We are talking big bucks. I'm not sure how you could possibly spend that much raising kids unless you blew it on designer clothes or private schools.

Well like a typical family in this tax bracket we do send our kids to private schools? What a weird comment. That said given real estate trends in this area it would cost $$$$ for an ex wife to maintain a household in the previous school district as a single mom. So no, it makes perfect sense that a high income father needs to pay major child support or risk his kids having a very different quality of life post divorce.

Nobody is entitled to go to private schools, they are unnecessary. You are also not entitled to the same lifestyle when you get divorced. This is an old school way of thinking. How long do you expect someone to support your lifestyle that you think you deserve? You should focus more on being independent instead of mooching off of someone.

Hmm no thanks. And since I was a litigator before I was a SAHM I don’t live in fear of protracted litigation.