Prenuptial agreements are supposed to lay out each spouse’s financial expectations before they enter into their marriage. Many couples decide to waive their option to alimony because both people have established careers and sufficient financial resources. Also, most couples simply do not anticipate or want to believe that there might be the need for alimony in the event of a divorce.
However, when the financial balance in the marriage suddenly shifts, it is crucial for spouses to review and make any necessary revisions to their prenuptial agreement. For example, if one spouse takes leave from their job to take care of the children at home for an extended period of time, the stability of their career might be affected and alimony might be needed in the event of divorce. Another example when a couple should update their prenup is when a spouse has to leave the workforce to care for elder parents. Spouses sometimes might reach an agreement where one or more of their parents requires a full-time caregiver.
Accounting for Children & Elder Parents in Your Prenup
The difference between deciding how to account for children and aging parents is that with children, you have a general understanding of the timeline you need to consider and plan for. Children will eventually have to start going to school and an elder parent’s time might be freed up enough for them to return to the workforce. Childcare options are also widely available and relatively affordable for a household with two incomes.
On the other hand, caregiver options for the elderly, outside of Medicaid that is, are difficult to find and sometimes near impossible to afford. Furthermore, these caregiver options don’t always fit the needs of a family. The length of time that a spouse will have to be committed to the caregiver role is also difficult to determine. Being a caregiver for an aging parent can last for a few months, or it might last for decades or longer. Because the amount of time a person will spend as a caregiver is unpredictable, it is prudent for spouses to remove the alimony waiver from their prenuptial agreement and decide upon a fair amount of compensation if they ever decide to get divorced.
Leaving the workforce to care for aging parents doesn’t just mean a spouse loses a paycheck, it also means they can’t contribute to their social security benefits. A spouse caring for an aging parent also misses out on employer contributions to their retirement plans. Their job skills might end up being out-of-date when they are finally ready to return to the workforce, which will make it difficult for them to find employment that suits their skill set. Because so many significant financial factors need to be considered when caring for an elder parent, and because of the stress that caregiving brings into a marriage, addressing the issue of alimony before taking on the role of caregiver is a wise choice.
Caregiving for aging parents takes a toll on every aspect of a person’s life, including their physical and mental health, their personal relationships, career prospects, and finances. Before deciding to become a caregiver, you should think very carefully about the impact caregiving will have on your life, including your ability to re-enter the workforce or maintain your financial stability.
There are many resources available online, such as https://www.caregiver.org/, the AARP, and the Alzheimer’s Reading Room that you can read to help you determine if you are in a position to assume the role of caregiver.
If you need help updating your prenuptial agreement call (800) 959-1614 to speak with one of our experienced Just Prenups Attorneys today.