Stay-at-Home Parents Need an Estate Plan

Any family’s estate plan must address all aspects of life, planning for incapacity and death. It’s easy to overlook the Stay-at-Home Mom (SAHM) or dad. They don’t have paychecks, raises, reviews, or PTO. But, overlooking the importance of what the SAH parent does for the family is a big mistake, and this includes neglecting estate planning, according to a smart article from The News Enterprise: “Stay-at-home parents must be deliberate about estate plans.”

For one thing, life insurance needs to be in place for both spouses. It may be easy to define the amount of insurance for the spouse working outside of the home, but the SAH parent’s tasks also need to be insured.

How long will the children be at home needing care, and what would daycare or a caretaker cost? How much would it cost to hire someone to cook, clean, do laundry, and run the household?

If children are home-schooled, how will the SAH parent be replaced? Will the children start attending public school, or is private school more aligned with the family’s values?

It’s easy to think the working parent will slide into these tasks, but unrealistic, as any single working parent will tell you. The children will be dealing with grief and emotional upheavals—adding a stressed parent to the mix who is also dealing with grief will make for a terrible situation.

In addition to having the right amount of life insurance, estate planning documents should be prepared with an eye on this possibility. The last will and testament is used to name a guardian for minor children, who will be responsible for raising the children if both parents are unable to care for them because of death or incapacity. A revocable trust should be considered, and a trustee should be appointed to ensure the funds are available for the children’s care and education.

The revocable trust can also ensure the children are not disinherited if the surviving spouse remarries.

This plan needs the review and guidance of an experienced estate planning attorney to ensure the will is correctly created to protect the children and set up any needed trusts.

Stay-at-home parents are often the glue keeping the family running. Replacing them isn’t possible—but preparing for life’s ups and downs will help the family adjust to any major changes.

Reference: The News Enterprise (May 25, 2024) “Stay-at-home parents must be deliberate about estate plans”

What’s the Latest on Benefits for Families of Service Members?

Dependent care flexible spending accounts are one of six measures announced recently by defense officials to address some needs in parental leave, childcare, education and career advancement for military spouses.

Military Times’ recent article entitled, “DoD to offer tax-saving child care accounts, other benefits for troops,” reports that the memorandum, signed by Secretary of Defense Lloyd Austin, also expands eligibility for the popular My Career Advancement Account (MyCAA) financial assistance program, to include spouses of service members in paygrades E-6 and O-3. The program, which provides up to $4,000 for obtaining a professional license, certificate, or associate degree, was available to spouses of troops in pay grades E-1 to E-5, W-1 and W-2, and O-1 and O-2 only. In addition, Secretary Austin also requires improvements to the Exceptional Family Member Program within 90 days.

The dependent care flexible spending accounts will let service members earmark up to $5,000 in pretax income, through payroll deductions, for eligible dependent care expenses. Officials hope to implement these accounts for service members by this year’s open season, which begins in mid-November.

A recent DoD survey of active-duty spouses found that 38% of those with children at home routinely use childcare.

According to Internal Revenue Service regulations, a dependent care flexible spending account can be used to pay for home and child center care, preschool, summer day camp, before and after school programs for children up to age 13 and adult day care. The money is deducted from the service member’s gross pay and deposited into the account before taxes are calculated. Childcare bills are then paid with those funds. The end result is a lower tax bill.

In addition, married service members with one child with eligible childcare expenses could get a tax benefit by contributing $5,000 to a dependent care flexible spending account. For them, the tax decrease ranges from $382.50 to $1,382.50, depending on their overall income. A 2021 DoD demographics report shows that 35% of active-duty members have children. Of those, nearly 42% have at least one child, five or younger. Another 33% have at least one child in the six to 11 age group.

In addition to these new accounts and expanded eligibility for MyCAA, Austin’s memo announced improvements to the Exceptional Family Member Program, universal prekindergarten at Department of Defense Education Activity schools and professional license portability.

Reference: Military Times (March 22, 2023) “DoD to offer tax-saving child care accounts, other benefits for troops”

Will I Live Longer, if I Babysit the Grandchildren?

There’s a growing body of research that supports the notion that grandparents who babysit a grandchild live longer. Parents with young children can know that their parents and their children are getting benefits from babysitting time together, says Considerable’s June article entitled “Grandparents who babysit a grandchild live longer, study finds.”

Considerable spoke with Dr. David Coall, senior lecturer at Edith Cowan University and a co-author of a 2017 study that found a connection between grandparent caregiving and mortality. Dr. Coall gave some updates in the field and highlighted further connections that still need to be made.

The 2017 study that Dr. Coall co-authored analyzed date from the Berlin Aging Study (BASE), which monitored the health and social conditions of over 500 participants in Germany between 1990 and 2009. The study focused on grandparents who simply provided periodic babysitting, rather than primary caregiving for their grandchildren.

Dr. Coall’s team of researchers found that caregiving grandparents had a 37% lower risk of death than non-caregiving grandparents. The same 37% risk reduction in mortality was found when comparing caregiving grandparents with non-grandparents.

Therefore, the risk of dying over a 20-year period was a third lower for grandparents who provided some level of care for their grandchildren, as opposed to grandparents who provided no care at all.

According to Dr. Coall, “The obvious next question was, ‘Is that purely because healthier grandparents are more likely to babysit and live longer?’”

In August 2017, he used the same BASE data to see if grandparents were healthier due to babysitting, or if they were babysitting, because they were already healthier and able to do so. Dr. Coall found that health only accounted for 22% of the link between helping and longevity. Interestingly, a direct effect of babysitting on longevity still existed in the data.

“So, we continue to look for what could be making this link between helping and living longer.”

Some longitudinal studies have examined if babysitting is linked with a subsequent improvement in grandparental health, with mixed results. The most recent study, a collaboration with researchers in Finland that was published in July, looked at whether an individual who became a grandparent subsequently went on to enjoy improved health.

Dr. Coall said that the research shows “a specific improvement in physical health, but not in emotional or mental health. Maybe this works through increased activity levels looking after grandchildren.”

Reference: Considerable (June 23, 2020) “Grandparents who babysit a grandchild live longer, study finds”

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Stay-at-Home Parents Need an Estate Plan

What’s the Latest on Benefits for Families of Service Members?

Will I Live Longer, if I Babysit the Grandchildren?

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