Estate Planning for The Sandwich Generation
March 25, 2024
Life Expectancy Changes
Over the last few decades, life expectancy has increased dramatically around the globe. The average person born in 1960, the earliest year the United Nations began keeping global data, could expect to live to 52.5 years of age. In 2018, the average was 72. In 2024, it is nearly 80 years old. In the UK, where records have been kept longer, this trend is even greater. In 1841, a baby girl was expected to live to just 42 years of age, a boy to 40. In 2016, a baby girl could expect to reach 83; a boy, 79.
This dramatic change has caused a further need to appreciate where families are different. Think of the fact that a child may be old enough for Social Security, while the parents are still alive, and they too are receiving Social Security. The younger recipient may have children and grandchildren that they need to plan for, in addition to their elderly parent. This demographic is experiencing a rise due to later childbirth and an aging population, compounded by the recent pandemic’s impact on long-term care facilities.
Sandwich Generation
Understanding the demographics and trends is required for an increasing number of the sandwich generation. The sandwich generation, a term for individuals responsible for the care of their children and aging parents which causes them to face unique challenges. Estate planning is now more than ever, a multi-level management process, which includes a constant review of documents including the basic documents of as the Will and Testament, the Durable Power of Attorney, and the Medical Directives; sometimes referred to as the Living Will. Further analysis includes the interdependence of these documents as it relates to the executors and agents, who when drafted were appropriate may no longer be the right ones at some later date.
Significant societal trends influence the increasing numbers of the sandwich generation. Understanding these trends is essential for tailored estate planning strategies. Estate planning is crucial for the sandwich generation. It provides a structured approach to managing the complexities of caring for children and elderly parents. This planning can offer peace of mind and a clear path forward in challenging circumstances.
Legal Documents and Decision-Making Powers
Estate planning for the sandwich generation should include preparing legal documents that empower decision-making for aging parents and minor children. Powers of attorney and healthcare directives are examples of such documents. If the documents already exist, then the documents should be periodically reviewed; particularly when members of the Sandwich Generation paradigm unexpectantly pass away or become otherwise incapable of performing their duties. The dynamic nature of the sandwich generation’s responsibilities necessitates regular reviews and updates of their estate plans. This ensures that the plans stay relevant and effective in meeting the family’s changing needs.
Effective estate planning for the sandwich generation is critical in managing special factors that are not traditionally part of Estate Planning considerations.
Key Strategies
Prioritizing and Reprioritizing
Estate planning for the sandwich generation starts with effectively managing daily tasks.
Identifying urgent versus non-urgent tasks can help balance the care of children and elderly parents.
Self-Care as a Crucial Aspect of Estate Planning
Self-care is vital to avoid caregiver burnout.
Individuals in the sandwich generation need to maintain their well-being to provide the best care for their loved ones.
Understanding Legal Rights and Workplace Benefits
Knowing workplace rights, such as those provided by the Family Medical Leave Act (FMLA), is an integral part of estate planning for the sandwich generation.
This knowledge can help caregivers maintain job security, while caring for their families.
Communication and Support Networks
Open communication within the family.
Maximizing access to support networks and forums for managing the expectations and responsibilities for the sandwich generation.
Financial Planning and Management
A crucial aspect of estate planning for the sandwich generation is evaluating financial resources.
Gaming a comprehensive understanding of the financial capabilities of aging parents and exploring public assistance or family contributions when needed.
Discussions with Aging Parents and Family Members
Conversations about care preferences and financial abilities with aging parents and family members are essential.
Preparing for the Future including the long-term considerations, like home renovations for elderly care, professional services and retirement savings, are essential in estate planning for the sandwich generation.
Insurance policies and emergency funds are critical to protecting the family’s future.