The “Sandwich Generation” encompasses middle-aged adults who
are not only bringing up their own minor children or supporting an adult child,
but also are responsible in some way for the care of their parents, as well.
The are “sandwiched” in the middle of their family’s needs.
According to a PEW
research study, many adults
are providing emotional support, day-to-day living assistance, or financial support to both a
minor or adult child, as well as a parent 65 or older.
Sandwich generation clients have it particularly tough when
it comes to estate planning. As individuals, they are finally starting to acquire
substantial wealth and beginning to seriously plan for retirement. They need an
estate plan to protect and direct those assets to the proper place in case of
an accident.
On top of this, they are also the child and partial caretaker
of an adult 65 or older. That means that not only are they worrying about their
own estate plan, they need to be worrying about their parents’ as well. If their
parents don’t have an estate plan, the sandwich generation are the ones who will
have to sort out the mess left behind. That can mean years and thousands of
dollars spent in probate court, will contests, and family conflict.
We get many of our estate planning clients in our office because
they have recently lost someone who didn’t have a comprehensive estate plan,
and the client wants to make sure that they don’t make the same mistake.
In addition, the sandwich generation also has to worry about
their own children. If they have minors, they need to make sure there is a
guardian appointed for the minor children. Nothing tears apart a family faster
than fighting for custody of an orphaned child. They also need to make sure
that there is, at the very least, a simple trust set up so that their minor
child won’t inherit all of their assets at age 18, the age of inheritance under
default Missouri law. I think we can all agree that eighteen-year-olds are not
the best at making financial decisions.
If the sandwich generation is supporting an adult child
(many do), they also need to worry about their child’s estate plan. While these
adult children likely don’t have assets, they will need an estate plan for
other reasons. When a child becomes an “adult” at age 18, the flow of
information to a parent, and authority of the parent to make decisions, is cut
off.
This can be partially remedied by having both a general power
of attorney and health care power of attorney nominating their sandwich
generation parent as “Agent.” This allows the parent/agent to make decisions or
perform tasks on behalf of the adult child for convenience or in case of
incapacity. This can be for things like filing taxes, or depositing forgotten
paychecks, or calling the doctor or pharmacy on the adult child’s behalf. If
there is an emergency, a hospital would have to contact the parent/agent and
allow them to make decisions on behalf of the adult child if he or she is
incapacitated. Without these documents, the parent would not have to be
contacted and would have no authority to make decisions for their “adult” child
in case of an accident.
An estate planning attorney is going to be a sandwich
generation client’s biggest ally. They need to make sure their older parents have
an estate plan so they aren’t left with a huge mess to sort out after losing a
parent. They also need to make sure they have their own assets protected and tidied
up with an estate plan. They also need to make sure their minor children have a
guardian and provisions ensuring full inheritance doesn’t happen at 18. And
finally, they need to make sure they have powers of attorney made out for their
adult children whom they support in one way or another.