Getting to the Meat of Estate Planning Issues for the Sandwich Generation

July is National Sandwich Generation Month. Many of you just read that and thought “What’s the Sandwich Generation?” You know Gen Z, Millennials, Gen X, Boomers, The Silent Generation, etc. The Sandwich Generation is not a generation in the typical sense of the word.

The Sandwich Generation pulls mostly from the Millennial and Gen X generations. They are defined simply by having living parents as well as children of their own. They are sandwiched between generations in caring for their children and caring for their aging parents – and they face unique estate planning challenges in having to care for three generations (including themselves) to juggle.

We are exploring some of those unique issues and how effective planning mitigates some of the recurring problems that burden the Sandwich Generation.

Financial Planning and Estate Planning Go Hand-in-Hand

The most obvious issue individuals with living parents and children of their own face is the significant financial burden that comes with caring for aging parents while providing for young children. This juggling of finances often leads to extreme stress.

So, how does effective estate planning help? Using available tools in your estate plan can free up extra cash and grant you more financial freedom as you care for both generations. Trusts are a common tool your generation uses to protect assets and preserve eligibility for tax exemptions and government programs (such as Medicaid and Social Security).

Additionally, when you make financial contributions to the care of your parents and children, consider making them in the form of cash gifts that qualify you for gift and estate tax exclusions. The annual gift tax exclusion increased to $17,000 in 2023. The estate tax exemption grew to $12.92 million per individual and $25.84 million for married couples.

Make Use of Guardianships AND Conservatorships

Guardianships ensure care is provided to children who are not yet able to care for themselves. Conservatorships ensure care is provided to adults who are no longer able to care for themselves. Both of these, as you already deduced, play an important role for the Sandwich Generation.

On one end, naming a guardian for your children ensures that the person of your choosing is there in the event of your death, incapacitation, or other reason for being unavailable to care for your children. Conservatorships do the same for your aging parents but also grant you the right to make decisions on their behalf when they are no longer able to do so themselves..

Get Ahead of the Long-Term Care Question

Many Americans aren’t prepared to make a decision about long-term care for themselves or their parents. They don’t understand their options and often underestimate the costs.

Life happens fast and while you’re juggling everything you cannot afford to forget long-term care planning. We previously discussed long-term care options and the varying resources and costs associated with them. Use this as a tool to strengthen your research and decision-making BEFORE it’s officially time to make the call.

Buy Your Parents’ Home

If your parents still own their home and you have the ability to purchase the home it gives them significant equity to spend on care for themselves. This allows you to focus more on yourself and the family you started while still being there when your parents need you.

Your estate plan is a powerful tool to care for multiple generations in your family. At Elder Advisors Law, we help all generations establish estate plans that help them meet their own goals while ensuring loved ones are taken care of. Contact our team and make sure your plan is taking care of the whole family.

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Elder Advisors Law

As Leaders in Estate Planning and Elder Law, we are passionate about helping families protect their hard-earned assets from the government, nursing homes, lawsuits or other predators.

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