No Contribution Is Too Small

Most American strive to earn a decent-sized paycheck to support themselves and their families when they go to work. Stay-at-home parents, however, work to provide valuable nonfinancial contributions to their families everyday. They make sure that the home runs smoothly and that their family members have what they need to be successful and happy. If something were to happen to the stay-at-home parent, how would the family’s needs be met?

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; and
• managing the household’s administrative needs (e.g., scheduling appointments, planning events, coordinating family schedules).

While many of these tasks and responsibilities may be overlooked or underappreciated on a day-to-day basis, have you considered how much money or time you would need to complete them if the stay-at-home parent were no longer able to? The employed parent would need an additional source of income to outsource the tasks or would have to take time away from their job or free time to complete the tasks.

Multifaceted Approach to Protecting Your Family

We believe that, for you and your family to be properly protected with comprehensive financial and estate plans, it takes a team. First, you need to quantify the cost of the services provided by the stay-at-home-parent so you 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 can also help you determine if the employed parent should make larger contributions to their retirement account or contribute to a spousal individual retirement account for the stay-at-home parent.

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 Planning Considerations

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 to your

• descendants (children and grandchildren);
• parents;
• siblings; and
• siblings’ children (nieces and nephews)

in that order, depending on who survives you. The amount that each person receives also varies depending on your state’s law.

Protecting families is our passion. We welcome the opportunity to work with you to help protect you and your family. Call us to schedule your appointment or visit our website to learn more about our firm and process.