If you are part of the baby boomer generation (born between 1946 and 1964), you may also find that you are a member of the sandwich generation, with responsibilities to both your parents (now or in the future) and your children. This should change the way you think about estate planning—instead of the traditional approach of how to leave assets to your children and future generations, you may also need to include providing for the previous generation (your parents).
Today, one in four families has a care-giving challenge, with 45 million Americans providing care for one or more family members or friends. Two-thirds of those currently over age 65 will need long-term care at home, adult day care, assisted living or nursing home care. But contrary to popular belief, Medicare does not cover long-term care or assisted living costs.
Actions to Consider
- Set up a trust for your parents in your estate plan. Special provisions can be included that would allow them to qualify for Medicaid if needed now or in the future.
- Select someone to oversee physical care. This might be a sibling or one of your adult children. It should be someone who lives nearby and is willing to visit often, observe the care being provided, hire caregivers, select a facility or doctors, etc.
- Select a trustee to manage the funds. This might be the same person who is overseeing the physical care or a different person; not everyone has the aptitude to do both. A professional trustee is also an option.
- Purchase a life insurance policy on your life to provide the funds to pay for this care so that your other assets are not consumed. A term life policy that would extend beyond your parents’ projected life expectancy would be the most affordable.