Aging Answers - Episode 11: The Sandwich Generation Transcript - Norris McLaughlin, P.A., Attorneys at Law

Episode 11: The Sandwich Generation

Transcript: Shana Siegel

Welcome to Norris McLaughlin’s Aging Answers, a limited podcast series discussing the key topics of elder law planning and long-term care. I’m your host, Shana Siegel, Practice Group Leader of the Elder Law Group and member at Norris McLaughlin. In this episode, I’ll be talking about the challenges that people like me face as part of the sandwich generation in assisting our loved ones.

So today I wanted to talk about the challenges that people of my generation are facing in terms of assisting their vulnerable loved ones. I say this with so many of my friends. I would say almost every one of my friends is helping with issues with their parents, is dealing with issues with their children or their adult children. And so that’s what I really wanted to focus on today.

So as I said, I find that so many of the people who I spend time with, we’re caregivers and you know, we were caregivers of our young children, but now we’re still caregivers. We’re caregivers, some friends are caregivers to their spouses. Maybe their spouse is a bit older or they have a spouse that has a disability.

Many of my friends like myself have children with disabilities and they are assisting them with their public benefits or as a direct caregiver. Some of my friends have Children who are what we call failed to launch, right? They’re in there. They’re late twenties, early thirties, but they still aren’t quite independent.

And so they’re providing some assistance to those children. Almost everyone that I know is, if they’re not a direct caregiver to their parents or their in-laws, they’re coordinating that care, right? So, they’re spending a fair amount of their day involved with dealing with these issues. And with all of that, and many of us also working, what tends to fall to the wayside, it’s often our own health care, our own financial needs. So, I want to talk today about things that I’ve learned, things that can make it a little bit easier, and that, you know, I have so many clients come in and say, God, I wish I knew that, or friends, I’m talking about situations at work, and they’re like, Wow, I really wish I had known that before. So, that’s what we’re gonna do today.

So, individuals who are caregivers to a disabled adult child, that is a common scenario and there are a lot of lessons to be learned in dealing with that. Of course, that’s not something you can help, right? You have a child, you want to assist them, you’re gonna provide care to them.

But I find that even when there are individuals, adult children that are not deemed disabled, but they just have had struggles that very often their parents are assisting them. And that can really impact that parent’s own lifestyle. It can impact them if they need long-term care, and the gifts that they’ve given can cause them to not qualify for Medicaid.

It can impact them in their own financial planning and not having enough. funds for their own retirement. So, something that people really have to consider if they’re supporting someone who is not necessarily disabled but maybe just kind of struggling. I find that many individuals particularly of generation before mine, they haven’t taken that opportunity to maximize public resources. There are a lot of public benefits that are out there for individuals with a disability.

Very often, parents think it’s their job to care for their adult child, and so they’re not taking advantage of all of the resources that they could, and again, that is not necessarily the best service for the child. The child may be, eligible for things that they’re not receiving, but also comes at a real cost to that caregiver, even if the child isn’t living in their home.

Very often again, the parents are subsidizing their child. You know, I know many of my friends were paying, you know, two and three rents in terms of providing for our adult children. And, you know, that may be okay for a very short period, but if you’re doing that over years and years and years, that’s really gonna be a real trouble for your own financial health.

So, what are the things that you need to know if you are a caregiver of an adult child with a disability? First of all, education and planning is key. You really need to know what is out there. There are so many public benefits, so many programs. But, they’re really complicated, and they intersect, and they impact each other.

So, there are certain benefits that you receive that are means tested, and so if you’re providing money to your adult child, you’re subsidizing their rent, that may lower their benefits that they receive from Social Security. So really understanding, getting a good knowledge of how all these things work together, is key.

Parent groups are really a wonderful source for that. There’s no reason for you to invent, reinvent the wheel. You can really learn from so many other parents as to what’s out there and how to avoid some of the impact on public benefits that you may have. For instance, you could be charging your child rent. You may be able to get paid as a caregiver. So, all of these things are things that, you know, you can learn either from parents groups or from knowledgeable legal professionals. So those are really key resources.

Another thing I find is that very often when the child turns 18, they’re getting ready to graduate from high school, that You know, there’s a lot of really important planning that needs to happen at that time. That is a situation where you maybe need to consider guardianship, you may be needing to consider applying for public benefits, getting involved in DDD. I have parents who come to me, clients who come to me later, and they never knew that they needed to apply to DDD and get on wait lists, and now they find out that they can’t get their child into a housing situation.

So, you know, anytime you’re starting to think about, will my child move outside of the family home? What happens when I’m gone? Those are all planning opportunities that you need to plan for before they actually happen.

So now let’s shift gears. Let’s talk about supporting aging parents, because that is something that really so many of us are facing and really everybody has parents, right? And so many people come in, they’re dealing with their parents and their in-laws. So, there’s a lot of things to think about to try and make this easier to plan for your aging parents. First of all, it’s really important, if you can, to help them understand why they need estate planning documents.

Sometimes there’s a real hesitance to address these issues, but if you can share with them why it’s important to have these documents, and we’ll talk about that a little bit, that can be really helpful, really key. I always tell families to address the potential sources of conflict early. A lot of times people put off doing their documents because they’re concerned about family dynamics and family conflict.

But those things aren’t going to go away. They’re just going to become more difficult if you don’t have things in place. So, I always tell people get together, schedule a family meeting. Really start to talk these things out and figure out how you can minimize some of the family conflict issues. Many families are interested in asset preservation.

They want to preserve the legacy, but they don’t plan soon enough. So, it’s only when someone gets really, really ill and needs a nursing home that people start thinking about. planning for protecting assets. And in some cases, that’s too late, not necessarily, but in some cases. So it’s always smart to start thinking about these issues a good 5 to 10 years before you actually need long-term care.

So, you understand what’s out there and what options are available to protect assets. But if you haven’t done that, your parents have been hesitant. Very often, they don’t want to think about that until that time. Don’t assume that it’s too late. There may still be planning opportunities that could work for you, even if you’re right at the point of your parents needing care.

Of course, it’s important to work with specialists. Working with a geriatrician, a neurologist, a geriatric care manager, and an attorney who focuses on elder law. This isn’t a time for working with people who dabble. You would be surprised as to what opportunities are available, what benefits are available, if you don’t take the time to really learn from someone who’s very knowledgeable.

And the last kind of general point, which I’m going to get back to a little bit later, is your parents should not spend all their money on home care. Some people may want to stay at home forever, and that’s great. You may be able to do that, but you need to at least think about what other options there are. We’ll get back to that in a little bit.

So sometimes I have adult children, you know, whether they’re friends or clients will come to me and say, well, they really want to talk about these things with their family members, but their family members are hesitant, or they really just don’t want to plan. And, you know, I think sometimes we have to really explore why the reasons for that is.

Is it that they are afraid that it means that they’re ceding control, right? They don’t want their children to take over their lives. And if that’s the case, maybe there’s some conversations that you can have about, doing documents doesn’t mean that you’re necessarily then going to start to use them, right? It’s just planning ahead.

There’s a lot of privacy concerns, so people don’t want to share with their children how much they have and, you know, where their assets are. But again, that isn’t a part, doesn’t have to be a part of doing your documents. Some individuals, there’s denial, there’s superstition, sometimes it’s just procrastination.

All of those are things that are difficult. to address but important and it’s something that maybe you can if you understand what the issues are you can help to alleviate them. And as I said before a lot of times individuals are doing it to avoid conflict. I had a case where a celebrity who had a lot of assets, a very substantial estate, he didn’t want to do his estate planning.

Why? Because he knew that it would come up he would have to address the illegitimate child that he had. So, he never got it done. Now, of course, you can imagine that made it a lot more complicated. It’s not as if the issue was resolved by not fixing it. In fact, it just made it worse when it came to trying to administer that estate.

So when you’re talking with your parents and your loved ones about planning, Well, maybe you can share with them some of the reasons that it is important. It really does allow them to determine who is going to step into their role, who is going to be helping them. And that can be empowering because if they don’t decide it, then the rest of the family is going to end up deciding it and there may be a lot of conflict there.

They get to share what their healthcare choices are. And how they want their healthcare to be controlled. So, you know, that, again, that can be empowering if you think of it that way. It’s important to understand the values of your loved one. And for them to share information with you. The worst thing is to step into the role of being a power of attorney and not knowing anything.

Not knowing where the assets are, how much money the individual has. For Planning is very important in protecting individuals from financial exploitation. I’m going to talk about financial exploitation more, but it is really an epidemic. And having planning documents in place, you can put a lot of protection in that can really help to keep financial exploitation at bay.

Thinking through legacy issues. People need to really start thinking about how they want their assets to go, do they have charities that they want to benefit, do they want to leave to grandchildren, how do they want those assets to be used. So all of those are important things. Planning can also help streamline the probate process and sometimes can minimize taxes.But, you know, I really don’t want to focus on documents today. It’s a given that there are a few basic documents that everyone needs, especially as you get older. But I really want to focus on talking about the practical issues that I see in my practice.

Let’s start with health care. Did you know that 92 percent of people say it’s important to talk to their loved ones about end-of-life care, but only about 30 percent of people actually do it. Think of that huge disparity. So, you can and should facilitate that conversation. Sometimes we think, or our parents think, that we know what their wishes are. But studies have found that that’s not really true. Children often think that they know, but they’re wrong when it comes down to it. They’re making choices that their parents wouldn’t have wanted.

Approximately 40 percent of people who receive CPR and other life-sustaining treatment, they didn’t want it. So why are they getting it? It’s because they didn’t write clear directives, maybe they didn’t appoint agents, or they didn’t really direct those agents into how to advocate for them. There are great websites out there, like Conversations of your life, which can, you know, provide the tools to start these conversations. It certainly can be difficult and awkward, but there’s a lot of great resources out there to help you.

When we talk about planning for our financial needs, First and foremost, having a power of attorney, of course, is very important. And I also always tell people that you should get it approved by the bank before you’re going to need to use it, right? So, a lot of times people do it with their trust and estate attorney, and then it gets, you know, put away on the shelf. But then when it’s needed, now there’s a delay in being able to use it. So, I always say, take it down to the bank, be added to the account. It doesn’t mean that you have to do anything with it.

I get a lot of questions about joint accounts and, Oh, we don’t need a POA because I’m joint on the account. Well, joint accounts are great, but there are a lot of things that come up that where you are going to need a power of attorney. So, I say it never hurts to have both. And we’ll talk a little bit more in a few minutes about how joint accounts can cause some difficulties once the parent dies. So, they can be a great tool, but you do have to realize some of the pitfalls.

When we’re talking about wills and probate, probate something everybody’s kind of confused and afraid of. Again, It’s important to address those family conflicts head-on. Maybe there’s a family member that really is not good with money and, and you know, the parent is afraid that they’re just going to blow through that money.

Well, there are ways to protect that child. There are ways to make sure that the person who you want to handle the estate is going to handle the estate. I find that a lot of times parents don’t want to deal with these issues. If there’s a lot of conflict between the children, but sometimes when they don’t, it can be even much worse. So, for instance, I had an estate recently where there was, the conflict was so strong between the siblings that there was problems with the funeral, fights about whether the parents should be buried or not, when the memorial was going to be, who was invited, All of those things were huge sources of conflict.

But the parent could have appointed a funeral agent. And that would have controlled who made all those decisions. And so that can be really important to address those kinds of issues and avoid those difficulties when the time comes. In New Jersey, we have an inherent, we have something called inheritance tax, and I get a lot of questions about that because that is a tax that is applied for individuals who are not immediate descendants.

So, if you’re leaving any assets to a niece or a nephew or a sibling, sometimes I’ll have clients say, Oh, well, I’m going to leave. money to my son-in-law if my daughter passes. Well, the problem is that that son-in-law is going to pay a tax, whereas if you left the assets in a trust for the grandchildren that the son-in-law controlled, then there would be no tax.

So, you know, things like that that people don’t know, you don’t know what you don’t know. So, it’s really important to start researching these things and finding out.

So, let’s talk about how wills interact with those joint accounts that we talked about. Another pay on death beneficiary designations. When you have beneficiary designations or a joint account, those govern, those assets. So whatever is in your will is not relevant to those particular assets, and that can be a real problem because you may say in your will you want to split everything 50-50, but if you have a joint account, someone who is on there for convenience, kind of in lieu of doing a power of attorney, That asset belongs to them when you die, and if they now have a bad relationship with their sibling, they may not be sharing those funds. So, it’s really important to kind of coordinate the joint accounts, your pay-on-death beneficiaries with what’s in your will, and to encourage your family members to do that.

Another big issue that I find is when we see late-in-life remarriages. So many issues come up with late-in-life remarriages where you have an individual who gets married and now the question is, are there joint accounts? Are those going to the new spouse? How are the children from the prior marriage now impacted? Are they going to be getting assets? There’s a huge opportunity for conflict. What happens with that surviving spouse? Are they going to be living in that house that they were living in together or are the adult children going to say, no, you know, we need to be able to sell this house. So, these are all issues which can be difficult, but really important to address early on.

I want to turn now to some of the biggest threats that I find in for older adults and really difficult for their adult children to address. The first is financial exploitation and the second I’ll talk about is long term care. As I said, financial exploitation is a huge epidemic. Billions of dollars are lost every year at this point. And I’m finding that the ways that individuals are able to scam funds is just ever-changing. And it’s hard to keep up. But there are a few things that you can do. So first is really hiring the right professionals.

Encouraging your parents or going with them to see their CPA, their certified financial planner. Adding second trusted contacts onto the account so that if there is potential fraud that, you know, you can find out about it soon enough. Potentially having a second set of statements go to the adult children.

Working with an elder law attorney and possibly a daily money manager to be able to help with paying bills. Powers of attorney can be drafted in ways to protect against financial exploitation. So, when you’re going to do that, you really want talk about that with your estate planning professional. Having statements, as I said, a second set of statements going out to the adult children or the other close family member can really make a huge difference in terms of stemming the financial exploitation as soon as possible. And in some situations, it’s worth considering a trust as a way to try to protect assets from financial exploitation.

I tell individuals that are concerned about exploitation and financial abuse to consider things like having automatic deposits and automatic bill paying, and perhaps having a second separate account that is going to not be controlled on a daily basis by the older adult, so that if the older adult is getting to a point where they’re starting to maybe have fallen for a couple of scams, that you consider kind of moving some money into an account that is harder to get direct access to from the scammers.

If you have a parent that is bringing care into their home, you have a home care agency coming in, then there are a lot of steps you can take to secure their home. So, you can do background checks for anyone who’s going to be coming into the home. You can remove valuables from the home and put them away.

Consider shredding identifying documents. You know, when I go into a home of one of my clients, we’re doing an at-home signing. There’s often just financial documents everywhere, right? Their statements, their tax returns, things are all out. So if they’re out when I’m there, think about when the home care worker or the handyman or whomever is in the home.

And, you know, gets, gets to take a look at those documents. So, you want to get those things put away. If there’s any type of family conflict, it’s really important to make sure that all of the family is on the same page and is brought together and knows who the agents are and what the financial plan is. Even if there isn’t conflict, it’s good that everybody, because there may be just places People make assumptions and so it’s important to, to sit down, have that family meeting so everybody knows, you know, is the plan to stay at home, is the plan to go into maybe a continuing care community, how are the assets going to be used.

If there is financial exploitation, you can potentially use a guardianship or conservatorship as a way to try to protect and even potentially get some of those funds returned. So, long-term care is probably the biggest question that I get. People are concerned, what’s going to happen to my parents, how is their care going to be paid for, where are they going to get that care, and am I going to end up being the caregiver.

Every day until 2030, which seems like just around the corner 10,000 baby boomers are turning 65, and about 70 percent of those people over age 65 will require long-term care services during their lifetime. How’s that all going to be paid for? This isn’t a session on long-term care, but I do just want to, you know, kind of talk about some of the things that you should be thinking about.

First, again, it’s like a broken record, I know. I’m talking about planning. Right? Have those conversations. Plan ahead, 77 percent of older adults want to remain in their home, but over 70 percent of them don’t. They die in institutional settings. Why is that? Some of it is the current funding models, and we’ll talk about how there’s a bias in funding towards paying for facility care instead of home care, but a lot of it is about people not taking the time to fully consider their options and planning accordingly.

So, if you’re waiting until a crisis to really understand what’s out there, sometimes you end up kind of falling into facility care. So, if you take the time to think about home versus being in a congregate setting, there are pros and cons of both. So, what’s right for your parents? You know, it may not be the same as what’s right for my parents. It depends on a variety of things. So, think about isolation. Being at home most people prefer, but it can be really isolating. But some people aren’t going to be social even if they are in a congregate setting.

So maybe for them, the home is a better situation. Is the home handicap accessible? Can it be modified easily? Or is it just It’s some place that is never going to work. What’s the level of need, the level of acuity of your parents? Do they have dementia, in which case there could be wandering issues or are they a major fall risk?

And again, handicap accessibility of the home is really gonna, you know, combine within this area. How many hours of care do they need and how is that going to increase over time? It’s very hard to get home care and very expensive to get home care for. You know, 24/7, especially if you need care in the middle of the night, potentially.

You know, live in care is great, but that person is not allowed to be up in the middle of the night and providing care if they’re expected to be on during the day. So then you’re talking about having two home care people, and that can just really be . devastating in terms of cost. Consistency can be a problem with home care.

What happens when the person calls out? Are you now, as the caregiver, you know, as the family caregiver, stepping in and having to call out of work because you have to provide care on the days that the aid doesn’t show up? And then, you know, we talk about cost. One of the really important things to realize is that it is very hard to find the best congregate setting, assisted living, continuing care community, if you’ve spent the bulk of your funds at home.

So, people want to stay at home, but they often wait too long to realize that maybe they need to think about another option and then their choices are really limited. So that’s why it’s really important to have these conversations with knowledgeable professionals early on. So, you don’t find yourself in a situation where like, Hmm, what do I do now? I’ve spent all my money at home.

In terms of community options, there’s so many, and I don’t have time to talk about all of them, but you know, there’s senior housing, there’s assisted living, there’s nursing homes, there’s continuing care retirement communities, and they all have their own financial requirements. They all have different rules as to when somebody is appropriate for them, and there’s so many issues to understand surrounding this, and there are professionals out there who, this is what they do is they help families. find the appropriate setting for them. So, it’s really useful to talk to those people early on.

When we think about financing long-term care, many people don’t realize it’s not like other health care. It’s not going to be paid for by Medicare. Medicare coverage is extremely limited for long-term care. So, you know, you really have to think about what is the option for care after Medicare. If your family has long-term care insurance, that’s terrific. Probably too late for them to get it at this point. But if they have it, I find that a lot of people, they’re waiting too long to use it. They don’t realize that often there’s a waiting period. of 90 days, and they’re waiting till the person is really, really sick when they need it. Sometimes there’s a fallacy that, oh, if I have one year of coverage, then I can only use it all in a row, one year.

But that’s not how it works. It’s actually, it’s 365 days of coverage. Then that means that you might use, you know, 30 days here, and then six months later you might use another 30 days. So it doesn’t have to be something that you wait to use. Often, it’s use it or lose it, you know.

If you have a loved one who is a veteran, then you should really learn about a variety of veterans benefits that are out there. There’s service-connected compensation for a lot of illnesses that people don’t realize. Parkinson’s, ALS. Many different kinds of neurological issues do have a service-connected component, so there might be a benefit available. There’s a terrific pension benefit, commonly referred to as aid and Attendance Pension, which can cover individuals who served in wartime.

It’s great for home care and for assisted living, so that’s something to find out about. In New Jersey, we have home modification benefits. Many seniors are eligible for subsidies for home care. And we have veterans facilities which are much more reasonably priced than some of the private facilities. So, there’s a lot to consider.

Lastly, I want to talk about Medicaid briefly. I could talk for hours about Medicaid, but I just want to talk about some of the misconceptions. Medicaid typically comes in at a time where you have an individual who has really spent their private funds on long-term care and now they’re running out of private funds.

One thing that people often get confused about is if they have a parent who has really good income, you know, maybe they have a pension and social security and they think they could never get Medicaid coverage and that’s not true, actually. Most individuals can become eligible even with quite high incomes, but you do have to spend down and how you do that is really something that you know, you can work with your family and educate your family on because there are many ways to protect assets.

A lot of times they have adult children come to me with their healthy parent and they’re concerned about what’s going to happen to the healthy parent when the ill parent needs care, and you know, there are a lot of things that we can do to protect that healthy parent to make sure that they can stay in the home, to keep additional assets, to be able to ensure they have the income stream that they need. So, there’s a lot that can be done if you seek out education and help early enough. People often ask me, how much can my family member gift out? I’ve heard something about an annual exemption amount. Well, the annual exemption amount is a tax rule and it come, it’s up to $18,000 a year, but it has no place in Medicaid.

Medicaid does not allow that annual exemption amount. So, if there is a situation where gifting is needed or important or has happened. in the past, then you really need to address those issues and understand how they impact eligibility for Medicaid down the road.

One of the biggest issues that people are concerned about is protecting their homes. And, you know, so adult children will come to me and say, you know, what’s going to happen with, with my parents home? And there can be a number of ways to protect it. You can protect it for a spouse, for a disabled child, sometimes for a child who is disabled. An in-home caregiver, so there are a lot of things that can be done, but again, you know, you really need that education up front to make sure that you’re doing it in just the right way so you don’t make any mistakes along the way.

So, you know, thinking more generally, coming back to kind of summarize, when you have a family member who is starting to decline, maybe needing some assistance, or you’re kind of planning for the future when they do need assistance there’s a lot more than just documents to think about. You need to think about sharing information, making sure everybody has copies of the documents, they have all the information they need to being able to act.

You need to think about making sure that the assets are coordinated and titled, consistent with any of the state planning that you’ve done, coordinating beneficiary designations, pay on death, making sure that You know, maybe you’re going to have a family meeting to discuss these issues, talking regularly, you know, things are changing. Where you are today is not where you’re going to be in three or five years, so really continuing that dialogue as things go along.

Learning about your care options and the residential options and how much they cost before you need them. Really important to be educated in these areas. So, you’re not spending all of your money at home, you’re not in a situation where it’s time to go into a facility, but, you know, how is it going to be paid for?

If you are considering facilities, it’s a good idea to have a legal review of those contracts. I’ve seen too many cases where the family member ends up being held responsible, so you want to be really cautious about that. And lastly, remember that even though the roles are a little reversed, you’re still they’re still your parent, so you want to be really cautious about how you have these conversations and how you move forward to help protect them. Hope this has been helpful.

This has been Norris McLaughlin’s Aging Answers, a limited podcast series discussing key topics revolving around elder law and long-term care planning. I want to thank you, the listener, for being a part of our conversation. Be sure to tune in next time for a brand-new episode. If you’d like to learn more about our work, please go to aginganswers@norris-law.com.