The Elrod Firm


Three Things the Sandwich Generation Must Know

In July 2006, social changes in America finally prompted the editors at Merriam-Webster to add a new term to the dictionary—the Sandwich Generation.  The term refers to “a generation of people who are caring for their aging parents while supporting their own children.”

Statistics suggest that over one in every eight Americans between the ages of 40 and 60 is raising a child while also caring for a parent, placing them in this newly-named group of people who face a unique set of legal challenges.  If you identify with this group, there are three things you must know to avoid major setbacks down the road.

1.            Your parents need to name a power of attorney, and so do you.

A power of attorney is a legal document that allows one person to conduct business on behalf of another.  Signing a power of attorney doesn’t take away your ability to manage your own affairs; it just adds another who can legally help when needed.  You need to cover both financial matters and healthcare issues.  Without solid power of attorney documents, family members can be stonewalled by financial institutions, insurance companies, and healthcare providers when they attempt to help.

As a person gets older, the need for power of attorney documents may become more obvious.  But you shouldn’t wait until needs arise—that can be too late.  If you’re in the Sandwich Generation, you should insist that your parents take care of this important first step in planning.  You should do it yourself, too.

2.            Your parents need to protect their estate, and so do you.

Many people think if they aren’t wealthy (however they define that term) then “estate planning” isn’t all that crucial.  They are wrong.  Without proper planning, even a modest estate can wind up in probate court.  The high costs and lengthy time frame involved in that process should provide ample motivation to take steps to avoid it.  But estates need protection from more than just probate court.

Without proper planning, families can face unnecessary taxation.  They can also make assets vulnerable to the legal problems of the family members they hope to benefit.  A smart estate plan will do more than just keep the estate out of court, and it’s something the members of the Sandwich Generation need just as much as their parents.

3.            Your parents need to prepare for long-term care, for their sake and yours.

Over half of those who reach the age of 65 will need long-term care in their lifetime, and those services are expensive.  The estimated lifetime cost of care for someone diagnosed with dementia, for example, is in excess of $340,000.  An estimated 65% of those with long-term care needs are forced to rely exclusively on friends and family members to provide that care, in many cases because of financial considerations.

Armed with this knowledge, some families pursue long-term care insurance (because Medicare and other private health insurance plans don’t cover this).  Some take steps to ensure they can qualify for state and federal benefits, like Medicaid or VA benefits, when long-term care needs arise.  All these options have one thing in common—you have to plan ahead!

To learn more, check out my website,  While you’re there, order a copy of my book, You Need A Plan.

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