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Caught in the middle supporting your parents and kids?

Today’s household might not be multigenerational under one roof but most people in their 40’s and 50’ do have to think about supporting their multigenerational family. If you are part of this so called sandwich generation, there are a few strategies for you to manage this family dynamic.
Where do we start with planning for this?
The place to start is to understand that you will be supporting three different generations, your parents, your kids and you and your spouse. And it is not just financial support but it could also involve making life decisions for your parents and kids.
What type of support might be necessary for your parents?
It could be that they will only need your physical support – doing things like getting them to doctor’s appointments, making sure they have social activities and generally keeping them active. For some, there might be the need to provide financial support at some point during their retirement.
What are key things that you need to know from them?
It is really important that you and your parents discuss their current financial situation, what they have completed in their estate planning such as power of attorney and wills. You also need to be sure they are providing full disclosure on their medical conditions regularly.  And, be sure you know their choices for final arrangements even as tough as that discussion can be.
How can you help lessen the prospect of providing financial support?
The biggest is helping keep them aware of the scam artist who like to prey on the elderly in search of high investment returns. You will also want to talk early with them to make sure they have researched and are developing long term care plans. These are the two primary reasons that financial support can be needed.
What are the key planning steps for supporting your kids?
Start saving for college early is step number one.  The second most important step is to teach your children good financial habits early on so that they don’t become a financial burden later in life.
What should the boundaries be for adult children?
It is always important to set the terms and expectations and clearly communicate the support. Talk with them and find the best way to provide the support whether it is financial or physical in the form of moving in with you.
How can those in the middle plan for this?
The highest priority is to get your own financial house in order. Make sure you are saving for your own retirement, start adding to your emergency fund, understand tax implications of your support and most importantly, educate yourself on all the financial aspects your parents or children may be facing.
What else can be done to destress this situation?
If you are taking care of your parents, involve your children, especially if it is for activities like providing social entertainment or getting their grandparents to and from doctor’s appointments. Develop a support team that includes a financial advisor, estate planning attorney, elder care specialist to just name three important people on your support team.

Posted: 6/24/2016 with 0 comments

Categories: Estate Planning, Money Matters, Planning, Relationships

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