images (1)The Sand­wich Gen­er­a­tion:  A col­or­ful label for the peo­ple who find them­selves pro­vid­ing finan­cial, emo­tion­al and phys­i­cal sup­port for both their aging par­ents and their chil­dren at the same time.  Accord­ing to a 2013 Pew Research Cen­ter report, near­ly half of adults in the sand­wich gen­er­a­tion have a par­ent age 65 or old­er and are either rais­ing a young child or finan­cial­ly sup­port­ing a grown child.

What steps can they put into place to bet­ter man­age the sit­u­a­tion to bet­ter ensure they will not become finan­cial­ly des­ti­tute and/or have a ner­vous break­down?  Here are five:

Legal­ly Pro­tect Your­self

Lay the legal foun­da­tion that will allow you to pro­tect both your­self and your loved ones.  Just cre­at­ing the doc­u­ments isn’t enough.  Make sure they are prop­er­ly exe­cut­ed and nota­rized, orga­nized and stored in a safe place where a trust­ed friend (i.e. lawyer, finan­cial plan­ner, accoun­tant, etc.) knows where they are and how to get to them.  Ensure you con­sult with an attor­ney to deter­mine the best options avail­able to your spe­cif­ic cir­cum­stances.

Include the fol­low­ing doc­u­ments:

  • Durable Pow­er of Attor­ney.  It is a writ­ten autho­riza­tion to rep­re­sent or act on another’s behalf in pri­vate affairs, busi­ness, or some oth­er legal mat­ter, some­times against the wish­es of the oth­er.
  • Will or Tes­ta­ment.  A will is the method that many peo­ple use to trans­fer their assets upon their death.  It is a legal dec­la­ra­tion by which a per­son names one or more per­sons to divide up their assets and man­age their assets after their death.  Con­sid­er both how age­ing par­ents and chil­dren will be cared for in your absence.
  • Revo­ca­ble Trust.  A trust is a rela­tion­ship where­by prop­er­ty is held by one par­ty for the ben­e­fit of anoth­er.  The trust will hold the prop­er­ty for the trust’s ben­e­fi­cia­ries, usu­al­ly your age­ing par­ents and your chil­dren.  While the trustee is giv­en legal title to the prop­er­ty in the trust, it is oblig­at­ed to act for the good of the ben­e­fi­cia­ries; your loved ones.
  • Liv­ing Will and/or Health­care Proxy.  In the event you become inca­pac­i­tat­ed, these doc­u­ments allow you to appoint some­one to make deci­sions on your behalf.  This includes both finan­cial deci­sions and health­care deci­sions so be sure you clear­ly com­mu­ni­cate your wish­es and plans to your assigned agent well in advance of final­iz­ing the doc­u­ment.

Know Where the Assets Are

Sit down with your par­ents and dis­cuss their finan­cial sit­u­a­tion.  What are their assets, debts and what they want to do in the event they become phys­i­cal­ly unable to care for them­selves?  This is a dif­fi­cult but crit­i­cal con­ver­sa­tion to have.  The best time to do this is when your par­ents are still men­tal­ly alert and cog­nizant of their actions.  Wait­ing until they show cog­ni­tive issues could pos­si­bly com­pli­cate and negate any oth­er work you’ve done.

The first and eas­i­est step is to fol­low the paper trail.  Review all the finan­cial state­ments.  Includ­ing pri­or year tax state­ments and state­ments from banks, cred­it card and insur­ance com­pa­nies, bro­ker­ages, etc.  The sec­ond step is to find all the “non-doc­u­ment­ed” assets.  This could include hard assets like gold and sil­ver coins or bond cer­tifi­cates which can be pur­chased and stuffed into a desk draw­er.  Take a look into safe deposit box­es, inven­to­ry what’s in the attic and clean out the garage.

Whose Mon­ey is It?

In talk­ing about mon­ey, make sure you dis­cuss whose mon­ey is being used and who makes the finan­cial deci­sions.  If you are lucky enough to have par­ents who can make their own finan­cial deci­sions, great.  But real­ize, at some point in time, they could become inca­pac­i­tat­ed.  Will they be able to rec­og­nize they are becom­ing inca­pac­i­tat­ed?  Have the dis­cus­sion on how and when finan­cial deci­sions will be trans­ferred from one gen­er­a­tion to the next.

For your chil­dren, dis­cuss finances.  Even though you may be able to finan­cial­ly cov­er all of your child’s expens­es, it is not in your best inter­est nor your child’s to do so.  You are tap­ping into your future retire­ment nest egg.  Giv­ing away too much may jeop­ar­dize your finan­cial secu­ri­ty in retire­ment.  For a child, many experts sug­gest that grown-up chil­dren should pay their par­ents for a por­tion of the house­hold expens­es.  Oth­er­wise, they may not grow up to be inde­pen­dent and able to sup­port them­selves finan­cial­ly.

Make Time for Your­self

No mat­ter what you do or how much sleep you lose, you will nev­er feel like it is enough.  Want­i­ng to pro­tect your loved ones is a human emo­tion and need.  How­ev­er, this guilt is self-imposed and there is no rea­son to feel guilty.  Most care­giv­ing experts insist it is crit­i­cal­ly impor­tant for care­givers to phys­i­cal and men­tal­ly recharge their bat­ter­ies in order to con­tin­ue to be there for their fam­i­ly.  Go to the gym, take a walk, con­nect with a close friend.  Find an out­let that will allow you to escape the day to day stress at least for a lit­tle while.

Find the Right Pro­fes­sion­al  

Man­ag­ing three dif­fer­ent gen­er­a­tions (your par­ents, your child’s and yours) requires a vari­ety of pro­fes­sion­al help.

Finan­cial Plan­ners help you orga­nize and plan for the future, both your future, your par­ents’ future and that of your chil­dren.  Good finan­cial deci­sion mak­ing can enhance one’s life­time stan­dard of liv­ing and increase the prob­a­bil­i­ty that every­one is tak­en care of finan­cial­ly.

Law is a part of our soci­ety and lawyers are trained to guide you through the legal process.  It can be com­pli­cat­ed, frus­trat­ing and time-con­sum­ing.  A lawyer will save you time and mon­ey by mak­ing sure you know what your legal options are and help­ing you choose what options are best for you cir­cum­stances.  Estate attor­neys can help with the legal doc­u­ments dis­cussed above.

Oth­er pro­fes­sion­als include accoun­tants and social work­ers (espe­cial­ly if you need to plan for future parental care).

Being a mem­ber of the Sand­wich Gen­er­a­tion can be stress­ful and fright­en­ing.  By tak­ing the five steps out-lined above, you will be able to retake con­trol of your life and bet­ter man­age that of your loved ones.