Most American strive to earn a decent-sized paycheck to support themselves and their families when they work. Stay-at-home parents, however, work to provide valuable non-financial contributions every day. They oversee the running of their home. What’s more, they provide for their family members to make them successful and happy. However, if something happens to a stay-at-home parent, who would meet the family’s needs?
Contribution Considerations
Traditionally, the stay-at-home parent is responsible for:
- Childcare
- Cleaning and maintaining the home
- Driving family members to activities
- Preparing meals
- Purchasing clothes, personal items, and household supplies for the family
- Managing the household’s administrative needs (e.g., scheduling appointments, planning events, coordinating family schedules)
Non-Financial Contributions
People overlook many of these tasks and responsibilities on a day-to-day basis. However, consider how much money or time you would need to complete them if the stay-at-home parent is unable? The employed parent would need additional sources of income to outsource these tasks. Alternatively, they would need to take time away from important matters to complete the tasks.People overlook many of these tasks and responsibilities on a day-to-day basis. However, consider how much money or time you would need to complete them if the stay-at-home parent is unable? People overlook many of these tasks and responsibilities on a day-to-day basis. However, consider how much money or time you would need to complete them if the stay-at-home parent is unable? The employed parent would need additional sources of income to outsource these tasks. Alternatively, they would need to take time away from important matters to complete the tasks.
Multifaceted Approach to Protecting Your Family
Protecting you and your family with comprehensive financial and estate plans, takes a team. First, quantify the cost of the services provided by the stay-at-home-parent. This way, you will know how much money or time performing these tasks will take. A financial advisor can assist you with making sure that these numbers are accurate. They will also help determine if the employed parent should make larger contributions. Sometimes, increasing contributions to their retirement account or to a spousal individual retirement account for the stay-at-home parent may suffice.
Then, after you understand what it would cost to replace the stay-at-home parent’s efforts, it is important that you meet with an insurance agent who can counsel you on the right amount and kind of insurance that you need to obtain. When thinking about estate planning, many people think of using life insurance solely in the event of their death. However, it is also important to plan financially for what would happen if the stay-at-home parent were to become disabled or incapacitated, because they would likely be unable to complete the same tasks as they did before. You may be able to do this type of planning by obtaining disability insurance.
It may also be a good idea to meet with your certified public accountant or tax preparer to make sure that you are claiming the right credits and deductions and noting the right expenses on your annual income tax returns to maximize your family’s single income.
Additional Contributions
In addition to the above-mentioned items, a properly drafted estate plan can ensure that your money and property are protected and used in a way that matches your ultimate wishes. If you have not created an estate plan, the state’s default plan will take effect upon your death. Although the laws in each state vary, your money and property will generally go first to your surviving spouse and then (in the following order, depending on who survives you) to your:
- Descendants (children and grandchildren)
- Parents
- Siblings
- Siblings’ children (nieces and nephews)
The amount that each person receives also varies depending on your state’s law.
RLT & IRLT Contributions
One thing that we focus on to protect families like yours is making sure that any life insurance proceeds are protected from your beneficiaries’ creditors and predators and are available to support the intended beneficiaries according to your wishes. One way to do this is to name a trust as the beneficiary of the life insurance policy. There are two different types of trusts that can protect life insurance proceeds: Revocable Living Trusts (RLTs) and Irrevocable Living Trusts (IRLTs).
Choosing a Guardian for Minor Children
We can also help you name a guardian for your minor children. If the other legal parent is still alive and able to care for the minor children, they can continue to provide care or assume caregiver responsibilities. It is also a good idea to plan for what would happen if both legal parents were unable to care for the children, just in case. Although you can name a guardian (and multiple backup guardians) for a minor child in a last will and testament, this document does not become effective until you die.
About Skvarna Law in Glendora and Upland, California
A skilled attorney can assist with your estate plan. Contact us today to learn about your options (909) 608-7671. We operate offices in Glendora and Upland, California. We provide legal services for individuals living in San Bernardino, Los Angeles, Orange and Riverside Counties. This includes the cities of Upland, Ontario, Rancho Cucamonga, Fontana, Colton, Rialto, Chino, Chino Hills, Glendora, Claremont, Montclair, Pomona, La Verne, San Dimas, Azusa, Covina, West Covina, Diamond Bar, Walnut, La Puente, Corona, Norco & Mira Loma. Visit SkvarnaLaw.com to learn more.
