Unmarried SAHM - why is this financial madness?

[lampfromikea]

I thought I'd ask here, on a appropriate board, so as to get mor impartial responses.

DP and I have been together 10 years, own a house together and have a 10 month DD.
We have legal paperwork covering the house in case relationship breakdown. DPs parents gave us 50% of the value of the house, so iirc the agreement is that DP gets that back and then the rest of the cash value and mortgage is split 50/50 between us if we split up and sell. Or one buys the other out to the value of their stake.

I'm planning on working out my notice period when I return to work in a few months and then taking a year or two out to be a SAHM (no pressure and as a teacher, can always find a job if I need to).
DP and I have no plans to split and do plan to marry, however I know that you can't always predict how it'll turn out.

However, I keep seeing people losing their minds on here about women who stay at home without being married. I just wanted to know why so many see this as being a terrible mistake?
For some reason, my brain just does not compute most things financial (despite being good at maths) so explain to me like you would a small child

OK I'll have a go!

Imagine you meet someone and move in together. You don't marry. You buy a house together, 50/50. You both work. Then you have a couple of children. The woman stays at home for a few years. Then when she tries to go back, the cost of childcare is prohibitive, so she goes back part-time. She goes back to work full time when the children are in secondary school, but her chances of regaining her former career are nil. She's had no pension for the last dozen years. She's earning half what she used to earn.

The children leave home and the husband wants to split up. She can have half the house. She's stuck on a low wage and small pension forever. Her partner's finances have not been affected at all.

This is a very, very common occurrence.

Sorry, meant to say partner rather than husband.

Whereas if she was married, she would be entitled to more than 50% of the house because of her lack of earnings due to having children and to a fair share of his pension, too.

If you split up you'd be unlikely to be able to buy a house on the equity you would have and the wage you could earn. If your partner died you would not be entitled to bereavement benefits as you are not married . You would get tax credits etc based on income but not bereavement benefits.
Taking a number of years out of work will reduce your pension and affect you getting back to work when you are ready.
If your partner lost this job or became ill , you have no other income to fall back on. if you have mortgage protection and critical illness cover then you may be ok but if only your dp is working and he got so ill he couldn't work you would get no help from the state to pay your mortgage for almost 9 months by which time you would possibly be facing repossession unless you could come to an arrangement with your mortgage provider.

Take me and DH as an example.

When our first DC was born we were earning almost exactly the same (we are the same age, and met at work so in the same industry).

He was able to support us financially, and we were both keen for me to stay at home, so I was a SAHM for 9 years (until our youngest DC started school). Then I went back to work - but part time, and in a less 'high powered' type of role. I now earn roughly 10% of what he earns, despite us originally having exactly the same earning potential.

If DH and I separate (not on the cards as far as I know!), as well as half the assets and maintenance payments for the DC, my understanding is that I will also be entitled to additional amounts (eg part of his pension, a larger percentage of the assets) to reflect my unpaid contribution to the marriage. But an unmarried woman would not.

What would happen if your dp died? Who gets his share of the house and his other assets then? Have you both made wills?

What would happen if you split up and your dp married someone else? If he's made a will, it will become invalid on marriage.

Not being married means you have to think of every possible contingency, and make provision for it. Getting married solves most of them in one go.

Thanks everyone! It does make a lot of sense! There's a lot that I hadn't actually considered being that important.

Can you say why, if you have plans to marry, that you have not done so yet?

It may sound old-fashioned, but I do wonder why, if a couple has no objection to marriage, they don't just do it first. I guess I assume that one of the pair has reservations and is stalling, perhaps in a subtle fashion.

It probably won't be important but if it becomes important due to death or relationship breakdown it will be too late to change things. It is a bit like an insurance policy. Also it can affect who can make decisions if one of you were ill - you can set up power of attorney so the other person has a say as they would if you were married. Inheritance tax might also be a factor. The main thing though is a relationship breakdown after years of you doing unpaid childcare and him building a secure future just for himself. It could be 20years down the line though. Keeping some financial independence is also important.

PitilessYank well, the first 3 years we were together we were both at uni so just didn't really feel like an adult relationship. Then for the next 3 we were renting and didn't want to marry until we had our own home.
Then I suppose we just never got round to it and had a baby instead. Neither of us is really bothered about marriage, we'd only do it for the financial benefit but our families would be devastated if we just went off and did it quickly with no fuss.

So a combination of a lot of things. DP keeps alluding to a proposal soon though so we'll have to see!

we'd only do it for the financial benefit but our families would be devastated if we just went off and did it quickly with no fuss.
you don't have to tell them...

The main thing I guess is that I just could not have predicted beforehand the massive discrepancy there would end up being in our salaries. Obviously I knew it would affect my earnings, but I underestimated the extent to which that would be the case.

DP keeps alluding to a proposal soon though so we'll have to see!

FFS. You are having a baby together. if you want to get married to him then just tell him that you want to get married and go and do it. If he says no then that may help your long term thinking.

Why on earth would you think that you need to wait for him to propose? This isn't 1923.

Yes, what LALA said. DH and I had always planned to get married in a vaugely talking about it way, but it just wasn't a priority. Then his Dad died very suddenly at a fairly young age so I just said, let's just stop buggering around and get married, eight weeks later it was done and dusted.

You don't have to wait for him to ask, get yourself protected woman!

Whatever else you do, make wills. Don't wait, do it now. You can do it to take any future children into account, and you can write it "in contemplation of marriage" so it remains valid when and if you tie the knot.

You are right that as a teacher you should have less trouble getting back into the workplace after a career break but there's still a lack of progression to consider.

LALA and HairyHands

Thanks for your input. I am aware of the year. I am aware that I don't need to wait for a proposal. I was not aware that choosing to have a man propose was such a preposterous thing to do, however.

If you're not married and he dies anything he leaves to you is assessed for income tax purposes. This may not be an issue if your property is under the threshold but in more expensive parts of country it might be. Also unless he has a will under the intestacy rules everything may go to your children not you.

Depending on his pension arrangements there may be a spouse's pension on his death - sometimes these are payable to unmarried partners but not always.

If you split up and you're now married as others have said childcare may be crippling. Assume for a moment you had the children. Maintenance for them as a ballpark may be 15% of his post tax earnings for 1st child and 5% for subsequent children. Would that cover your childcare costs to allow you to go back to work, let alone anything else? If you were married you may be able to get a greater share of assets or spousal maintenance to reflect this.

Also as an aside what happens to your home if he died? Do you get turfed out on the street so his parents can have their 50% back? Has any agreement been legally documented?

Widowed parents allowance and next of kin rights.

OP you can see how extremely passive and retrograde So a combination of a lot of things. DP keeps alluding to a proposal soon though so we'll have to see! sounds though right?

I don't think LALA and Hairy were being nasty. It's just that "we'll have to see" sounds faintly comical and a bit surrendered wife, especially given the pre-existing joint mortgage and joint baby.

It's too late for Jane Austen style surprise troth pledging anyway, isn't it?

I mean YOU were the one who said Neither of us is really bothered about marriage, we'd only do it for the financial benefit OP so it is a bit mixed message.

Parents would kill you for doing it on the quiet.. I would much prefer cross parents and the safety of marriage once we had kids quite honestly. Registry office, mid week £213 all in small room accommodates 10-15 people. If you want the dress and the big party but lack the funds simply have a blessing later with all the trimmings once you have the money. Whatever you do, do not let him make any excuses. Get yourself covered pronto !

Best friend two years ago- partner of 24 yrs , 4 kids. 22,21,17 14. left her and MARRIED 24 yr old Latvian model. He was 52. He didn't believe in marriage. They had life insurance/wills to 'protect' each other. He simply changed the life insurance and made a new will. She had been a SAHM. a house wife super star enabling her office clerk husband to climb to dizzy heights of hedge funder.. all money in his name. She is entitled to maintenance for one child and to live in his house until he is finished Alevels. That's it. No house. No money. No career. Had she married she would have had half (minimum) of 2.4 million house. Half 500 ANNUAL pension . Spousal maintenance until back on her feet. and of course half all other assets. Cars boats and holiday home in France and Thailand.
But he didn't believe in marriage and she told herself it was just a bit of paper

Be aware that there are many ways to avkid paying child maintenance, many of them perfectly legal. By far the majority of parents who have their children post separation receive no maintenance or a very cursory amount - like £7 a week. Marriage makes no difference to this but my point is don't assume your children will be taken care of. And don't assume a reasonable and decent man will remain that way post separation. Too many don't.

we'd only do it for the financial benefit but our families would be devastated if we just went off and did it quickly with no fuss.
you don't have to tell them...

This ........ although we did tell them, just didn't invite them (or anyone) and pi@@ed off abroad to do it.

You CAN NOT replicate the rights you get in marriage by any other means - You can pay a solicitor shed loads just to get close but you will never get the full deal without marriage.

One thing in your favour is being a teacher though- if you have QTS and do something to keep your hand in whilst a SAHM then you will be likely to be able to find work fairly easily if anything does go wrong. (I somehow doubt the teaching profession will suddenly fill up in the next few years, though you might have to work in a school that isn't the best match)

You are a teacher so I'm hoping to god you are fairly intelligent - Know your rights! Much as I disagree with Marriage for all the religious/moral etc reasons (I do) you can have a non religious ceremony - I made sure we were. There is no document (legal contract) that will ever protect you better than a marriage one from relationship breakdown (however likely you expect that to be) .