coryBy Cory Howes

Perhaps you’ve heard of the “Sandwich Generation,” which includes many Baby Boomers. People in the sandwich generation are those that find themselves caring not only for their children, but also their parents, either currently or in the future. Obviously, if you’re taking responsibility for both your parents and your children, you should adjust your thinking with regard to your estate plan. Instead of the more traditional approach, where you think through the ways you’d like to leave your assets to your children and subsequent generations, you need to mix in an approach that also includes providing for the generation that preceded you.

To properly plan for your parents, you should think about what would happen to them upon your death. Do they rely on you for physical support—do they live with you, or do you visit them on a daily basis to cook meals, do laundry, and take care of other household chores? Or, do you outright support them financially, helping them make ends meet where their Social Security and pension monies are insufficient?

How you answer these questions should dictate how you plan for them within your estate.

The sandwich generation is quite large, perhaps larger than at any point in our history. Their needs are complicated by rising health care costs, increased life expectancy, and loss of savings due to recent bear markets, the Great Recession, and historically low interest rates. Today, nearly one in four families has a caregiving challenge, as 45 million Americans provide care for one or more family members or friends.

The numbers really get scary when you think about long-term care, adult day care, assisted living, and nursing home care, as nearly two-thirds of those over 65 will need one or more of these services at some point. While many think that Medicare will address the costs of these services, the government health plan for seniors does not reimburse the cost of long-term care or assisted living. Many doctors aren’t taking new Medicare patients, since the plan, along with Medicaid, is cutting their reimbursement. On top of these program-related factors, we can expect the physician shortage to get worse, further exacerbating cost increases.

Take a look at these considerations for caring for your parents when you have passed away.

  • Set up a trust in your estate plan, with specific provisions included that will allow your parents to qualify for Medicaid either now or in the future.
  • Choose someone to oversee the physical care of your parents. Usually, this will be a family member or one of your adult children, but it should definitely be someone who lives nearby, is willing to visit often, and will diligently observe the level of care provided. This person will ultimately hire caregivers, select facilities (such as assisted living or nursing homes), and meet with doctors.
  • Name a trustee to manage funds for your parents. This could be the same person who manages their physical care, or another person entirely. Keep in mind that sometimes a person who has a big heart and a lot of empathy for seniors doesn’t necessarily have the aptitude or attention to detail required to manage finances properly. You may consider a professional trustee for financial management as well.
  • Take out a life insurance policy on yourself, providing that the funds deriving from the policy be allocated to your parents’ care, preventing them from being consumed by other needs of your estate. The most affordable option will be a term policy that expires at a date just beyond your parents’ life expectancy.
  • Convene an expert team to provide assistance and continuity in the event of your absence or death. Professional advisors should include a skilled elder law attorney who is familiar with government benefits such as Veterans Administration, Social Security, and Medicare/Medicaid; an insurance expert, a certified public accountant, and financial planner.
  • Your team of parental medical advisors should include a primary care physician, along with applicable therapeutic area specialists.
  • Caregiving advisors could include a geriatric care manager, visiting nurses, transportation services, depending on the health conditions your parents face.

To get the answers you need on estate planning for not only your children, but to care for your parents as well, email me at the Forrest Firm for a consultation today. Our team is here to meet your needs, no matter how challenging or complex they may seem now.