Planning for the Financial and Non-financial Aspects of Life

Typically, when one parent stays at home to take care of the children and household, they are responsible for several tasks such as taking care of the kids, cleaning the home, driving family members to events, cooking meals, shopping for the family, and managing household tasks like scheduling appointments and planning events.

While these tasks may not be valued as much as paid work, they are still important and require a lot of time and effort. If the stay-at-home parent were to become unable to perform these tasks, it would be difficult for the other working parent to do it all themselves without sacrificing their job or free time.

A Comprehensive Plan to Secure Your Family’s Future

To protect your family and finances, it is important to plan ahead in case an unexpected event happens. It is important to have a team working with you when planning.

Start by figuring out how much it would cost to replace the stay-at-home parent’s work if they were no longer able to do it. A financial advisor can help you with this and guide you on making contributions to retirement accounts.

Next, it’s important to meet with an insurance agent to determine the right amount and type of insurance you need, both for life and in case the stay-at-home parent becomes disabled or incapacitated.

Then, your certified public accountant or tax preparer can help you make sure you’re claiming the right credits and deductions and maximizing your family’s single income on your annual tax returns. By working with this team, you can create a comprehensive financial and estate plan that protects your family’s future.

A properly drafted estate plan can ensure that your money and property are protected and used in a way that matches your ultimate wishes.

Protecting Your Proceeds from Creditors and Predators

Our goal is to protect families like yours, and one way we do this is by ensuring that your life insurance benefits are safeguarded from creditors and others who might seek to take advantage of your beneficiaries. To achieve this, we recommend naming a trust as the beneficiary of your life insurance policy.

There are two types of trusts that can help protect these benefits:

1. Revocable living trust

A type of trust that you can create while you are alive, and you can change it until you pass away or become unable to manage your affairs. Usually, you are the person in charge of managing the money and property in the trust, and you can use it during your lifetime. If you become unable to manage your finances, someone else that you chose beforehand can manage the trust for you.

If you have accounts and property that are valued below the current lifetime estate tax exemption amount or if you have already created a trust, naming a revocable living trust as the beneficiary of a life insurance policy can be a good option. When you name the trust as the beneficiary, the life insurance policy’s death benefit will go to the trust after you pass away. The trustee will then use the money according to the instructions in the trust agreement, which we can help you create to better protect the money from any undesirable people, such as creditors or divorcing spouses of your beneficiaries.

2. Irrevocable life insurance trust

A way to protect your life insurance policy from estate tax and ensure the money goes to your beneficiaries according to your wishes. You can create this trust by transferring ownership of an existing policy to the trust or by having the trust purchase a new policy. You make cash gifts to the trust each year to pay the insurance premiums.

When you pass away, the trust receives the death benefit, and the trustee distributes the money according to the instructions in the trust document. This strategy is helpful for people who have assets valued close to or above the current lifetime estate tax exemption amount. By using this strategy, you can remove the value of the life insurance policy and death benefit from your taxable estate, which can save your loved ones money on estate tax.

We are passionate about safeguarding families and would be happy to assist you in protecting your own. Give us a call to schedule an appointment or schedule a meeting with us below.

750 F Street, Suite 2
Davis, CA 95616

333 University Ave, Suite 200
Sacramento, CA 95825

3017 Douglas Blvd, Ste 300
Roseville, CA 95616

288 Pearl Street
Monterey, CA 93940

San Antonio
18756 Stone Oak Pkwy, Ste 200
San Antonio, TX 78258

We operate on an appointment-only basis other than our Davis office.

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