Sandwich Generation Planning
According to Pew Research, the “sandwich generation” describes, “those who have a living parent age 65 or older and are either raising a child under age 18 or supporting a grown child”. And they explain that the sandwich generation often is providing financial and or emotional support for both their children and aging parents.
This can be a lot for sandwich generationers to manage. So what can be done to minimize some of the pressure and stress that comes with being sandwiched between older parents and young children? And how can sandwich generation adults make sure that everyone is taken care of in the event of declining health? Or in the event of an unfortunate accident or medical emergency, whether it be their own or their aging parents?
Below are some terms to become familiar with as you plan for your future security, as well as for your children’s and your aging parents. These terms are not covered in depth here, but below is a simple entry point to get started.
Planning for the Future and Unforeseen Life Altering Events
Putting plans in place that can be easily and quickly referred to in the event of a serious accident or physical or mental health deterioration is important. And this includes plans not just for aging parents, but for adults with young children as well.
Planning for tragedies and physical or mental decline in our parents or ourselves is certainly not any fun. And all of the legal processes to ensure everyone is taken care of can be confusing and complicated. But it is so important. Because as we all know, life doesn’t always go as planned. We are mortal human beings and vulnerable to all sorts of misfortunes. What we can do though, is plan and prepare.
So talking with your spouse, with your parents and with your children (if they are old enough) about the future and managing any unfortunate events is something that can benefit everyone. It may take many conversations and quite a bit of paperwork to work out all the details, but doing these things sooner rather than later can help everyone avoid a lot of stress in the future.
Establishing a Power of Attorney
A Place for Mom explains that a power of attorney is essentially someone that is legally assigned to make decisions for someone in the event they are unable to make those decisions for themselves. There are different types of power of attorney that can be designated, so those decisions may be related to financial, legal or medical decisions.
So for an aging parent, issues that their power of attorney may encounter include things like dealing with medical treatment decisions, signing consent forms and making financial decisions about their assets.
A Place for Mom recommends hiring a lawyer to set up a power of attorney (vs using an online document) so that there are no complications if the need to exercise power of attorney rights arises. And caring.com recommends all adults set up a power of attorney and that older adults address the issue immediately. Because if something happens that incapacitates a person (eg they receive a diagnosis of dementia), it will be too late for them to agree and sign their consent to assign a power of attorney.
Considering Long-Term Care Insurance
Long-term care can be very expensive. And Market Watch states that 7 out of 10 seniors need some kind of long-term care. This could be care from a “nursing home, assisted living facilities, in-home care providers, and adult day care centers”.
So, it makes sense for aging adults to seriously consider a long-term care insurance policy. Because unless older parents and one of their adult children agree to a co-living situation, an elderly parent may need a good deal of care at some point. And Market Watch explains that nursing home care can be upwards of $100,000 annually, and that insurance like Medicare does not cover these costs.
Other numbers Market Watch shares include $4,576 per month for a home health aide and $4,300 for a room in an assisted living facility (according to the 2020 national average costs). So those are some big numbers to contemplate.
And the thing about long-term care insurance, is that if older adults waits too long to apply, they may not be eligible or will end up paying huge premiums. So in line with the theme here, is to plan ahead whenever possible. For yourself and for aging parents and for the benefit of your children.
Setting up Advanced Directives
In the event of terminal illness or a major medical event, Nationwide explains that living wills and advanced directives are important to establish beforehand. A person’s living will describes what they would want done in terms of medical treatment and life prolonging measures in the event of incapacitation due to terminal illness.
Nationwide explains that an advanced directive is more broad in its scope, and would also include incapacitation from medical events other than terminal illness.
Making a Last Will
A last will dictates who will receive your assets and property once you are deceased. You can also assign a legal guardian for your minor children, as well as name an executor. An executor is responsible for managing things like property and assets once you have passed.
And once you have passed, your will goes through probate. Trust & Will explains that this is a legal court process that verifies and approves your wishes as outlined in your will. Your property will likely go through probate regardless of whether you have a will or not when you die, but having a will makes the process much easier. Avoiding a complicated probate means less estate taxes, legal fees, as well as greater privacy (as probate is public record). And if you don’t want the courts to decide what happens to your property, then making a will is a very good idea!
Trust & Will also explains though, that there are ways to get around or at least make the probate process easier when it comes to wills. Making sure all of your assets have titled beneficiaries is one way to do this.
Making a Trust
Unlike a last will, a trust does not go through probate. Nolo explains though, that a trust can be a little more complicated and expensive to make compared to a will, and also usually requires some maintenance. But like a will, you can assign beneficiaries for your assets. With a trust though, a beneficiary may start accessing those assets before you die if that is your wish.
Nolo shares an article on when you might want to consider a trust over a will. For many people, a will would suit their needs just fine, but Nolo explains that factors like how wealthy you are and how old you are can help dictate if a will or living trust is more suitable. In general, a trust may be more advantageous than a will the older you are and the wealthier you are.
Sandwich Generation Planning
As a mother of a young toddler, I have seriously started thinking about planning for unforeseen events. I want to make sure that my toddler will be taken care of in the unlikely event that my husband and I were to become incapacitated or deceased. And I am also getting clear on terms like “power of attorney” and “advanced directives” so that as my parent gets older, I know what to expect and can make sure all is in order for his wellbeing.
I think almost all parents hope that they never become a burden to their children. And dealing with these legal and logistical issues sooner rather than later is one way to ensure that we do not become a burden. So while most of us probably despise trying to figure out how to go about all of these legal documents, we know that it is well worth the time and effort.