FWIW I think that $500 a day is gonna scare the guy away. Are you worth it? IMHO .....Yes, However, we get contract guys in jets for $500 a day (typed and current - which the job you mention doesn't require).
What I fear will happen to you is that he will find someone else (like a low time CFII - building time for your old job). That guy will probably do the job for much less ( and deserves much less than a guy with your experience).
Here's what I did in a similar situation years ago when I was flying contract (made $500 a day back then in Hawkers and Falcons). I had a guy with a Cirrus (high net worth) and charged him the dual rate that the local flight school charged for instrument instruction (it was around $30 an hour). And I charged him the whole time we were out (capped it at 10 hours for an overnight) plus expenses. Also I convinced him to let me take one of my kids with me if it was an overnight or weekend day trip (actually, he often suggested it).
Bottom line was, he understood the whole hourly CFI rate and was cool with it. I never gave him dual, and if the weather was lousy I flew from the left seat (and he was good with that). He was getting someone much more qualified, and I was underutilizing my skills, albeit at a reduced rate, but with a fringe benefit (got to spend the day with one of my kids and get paid simutaneously). It's funny now, my kids remember the time they spent with me in that airplane more than they do the times they have been in the jets.
Either way, I don't see this becoming some big money making deal for you ( I wish it were), when you are probably competing against some low time CFII that would do it for free given the chance.
You obviously love your kids, given the choice you have made. Perhaps you can enjoy both your kids and love of flying. God forbid your kids pick up the bug too...