By Loulena Miles, a Partner at Miles & Torres Associates, an Estate Planning Law Firm
What is the sandwich generation anyway? It refers to those of us who are typically in our 30's or 40's and are responsible for bringing up our own children and for the care of aging parents. There are perks to this set up: it is enriching for children and grandparents to spend time together exploring the wonders of youth and the wisdom of a long life. But it can be difficult as well. The burdens can be eased if you put some tools and protections in place to help out during times of crisis or transition.
First off, find out if your parents have these important planning documents: a Will, an Advance Healthcare Directive and a Durable Power of Attorney for Finance.
The Will lays out your parents’ wishes if they pass away. This can eliminate a lot of stress and strife in families where are there multiple children or beneficiaries. A Will should be created as early as possible so that there is no question about your parents' mental capacity when the documents were created. If your parents have over $150K in assets, a Trust should also be considered to sidestep the costly and time consuming probate process.
The Advance Healthcare Directive is where your parents lay out their wishes for the types of medical interventions that they would want or not want. Many people would only want risky and expensive medical interventions if they are still able to meaningfully interact with their loved ones. An experienced estate planning attorney can assist your parents in writing down their wishes and naming a trusted individual who can make medical decisions if they are unable. If you are the caregiver, this often means you will be that person, and if difficult decisions have to be made, you’ll be glad to know their wishes in advance.
The Financial Power of Attorney is one of the most critical documents that can help a caregiver provide support to an aging parent while protecting the caregiver from having to pay for their parents' expenses out of pocket. This document will also allow you to manage your parents' finances in general. If you have this powerful document, you are less likely to need to go to court and get yourself appointed as the conservator for your aging parents. This document can either become effective immediately, while your parents still have capacity (very useful if your parents are physically home bound), or can be set up to only take effect if your parents lose mental capacity, usually as certified by a physician. Having this document can be invaluable and is easy to set up in advance.
Sandwich gen-ers also need to consider what would happen to their children if they are unable to care for them. At a minimum, you need to have a Will that names the preferred caregiver for your children. If you have significant assets to leave to your children (for example this includes your home, any expected life insurance proceeds, your possible inheritance and funds in an investment account) then it is a good idea to set up a trust to protect this property for your child’s living and educational expenses until they are fully launched adults.
Finally, by virtue of you being a member of the sandwich generation, it is a good idea to consider life insurance for yourself. You are very important to a lot of people and if something happened to you, a life insurance policy would provide the funds to set up support for your dependents.
The most important reason to set up these plans is to give you peace of mind. These tools will help you get your affairs in order and reduce stress if times get hard. As they say, an ounce of prevention….
Miles & Torres Associates provides a full range of estate planning services including wills, trusts, probate and conservatorships. We offer free initial one hour consultations. Visit us at www.milestorreslaw.com or call our office at 415-496-9396.