There are role reversals within families over the years. When you are young, you depend on your parents for everything, and there is still some sense of dependency even after you start to become a young adult.
However, when you become a parent in your own right, you are the one that has someone depending on you. At first, your parents will probably be fully capable of handling all of their own affairs. However, at some point, they may need help with their activities of daily living while your children are still relying on you to one extent or another.
Adults who are in this situation are considered to be part of the “sandwich generation.” There is a lot to take into consideration when you are in this position, and it can be quite challenging to juggle your priorities. You have to provide educational opportunities for your children, and you also have to look ahead toward your retirement years.
At the same time, you have to consider the well-being of your parents. Many seniors will eventually need a considerable level of living assistance, and you may or may not be able to provide the assistance that your parents need on your own. In many cases, nursing home care will be required.
Nursing homes are extremely expensive, with the national average charge for a year in a nursing home exceeding $90,000 at the present time. Medicare does not pay for long-term care, so this is a situation that can have a very significant financial impact on your family.
Medicaid can provide a solution, because it will pay for long-term care, but it is a need-based program. You cannot qualify if you have significant resources in your own name, so people often give away assets before they apply. This process is referred to as a Medicaid spend down.
Advance action is required, because there is a five-year look-back. To avoid penalties, the gift giving must be completed at least five years before the application is submitted.
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When you consider the challenges that members of the sandwich generation are often going to face, you can see why you should develop a plan that addresses all of these priorities. For most people, it is not going to be easy, but preparation is the key. If you do nothing as you hope for the best, you could be overwhelmed by the responsibilities.
Our firm can help if you would like to discuss sandwich generation planning with a licensed professional. We offer free consultations, and we would be glad to help you put a plan in place. To set up an appointment, send us a message through this page: Indianapolis IN Estate Planning Attorneys.
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