In the Middle
Parents today are part of the “sandwich generation.” As children of the Baby Boomers, they face the daunting task of caring for both their own children and their aging parents at the same time.
This dual responsibility has been shouldered by adult children since the beginning of time, but the modern-day sandwich generation find themselves in a particular grueling scenario: Older folks are living longer while the younger generation seems to be growing up (and leaving the nest) much more slowly.
To add to the complications, our society has rapidly changing views on how to care for the elderly. Nowadays, not as many adult children are taking their parents into their home to care for them as they age, said Barbara Franklin, owner and founder of Franklin and Associates, a Charleston-based firm that specializes in planning for long-term care.
“It’s not happening as readily, and the reason is women are working,” she said. “The daughters and daughters-in-law would traditionally be the caregivers, but if they’re working, there’s nobody at home to provide that care. So now we have to depend more on professional services.”
We also live in a more mobile society, meaning an elderly couple could have grown children scattered throughout the country and no family close to home to care for them. When the time comes that they do need that care, say after a stroke or the onset of dementia, adult children are left scrambling to figure out how to care for Mom and Dad, and how to pay for that care amid skyrocketing prices of nursing homes and aid services while still paying for childcare or college tuition.
For our last installment of our four-part “Family Matters” series, we talked with local experts on how Charleston parents can navigate the demands of caring for two generations at once, without going broke.
Having the Talk
The key is to avoid crisis management by planning in advance — way in advance, Franklin said. It may seem awkward to bring up nursing homes and in-home aids to your parents while they’re in their 60s, especially if they’re healthy and active and babysitting your toddlers, but that is actually prime time to make planning decisions.
“The difficult thing is it’s only one step up from talking about death, and nobody wants to talk about that, either,” Franklin said. “But adult children should be involved in the planning process — and not just estate planning, which has to do with what happens to the money and resources, but the more philosophical side of what do we really want our remaining years of life to be.
“I think if an adult son or daughter can start the conversation, everybody is going to be better served.”
It’s important to get an idea of how your parents envision their twilight years, Franklin said. Do they want to move in with one of their children? If so, who? Do they want to move into a retirement community? What are their opinions on nursing homes in the event they need advanced care?
The wishes of aging adults are also changing, Franklin said. Many parents don’t want to move in with their adult children — to save them the burden, but also to maintain their independence.
“Ninety percent of people who are surveyed by AARP and other organizations say they want to age in place,” Franklin said. “That doesn’t necessarily mean moving to where their kids are, it means staying in their chosen residence as long as possible and utilizing resources to be able to do that. The mindset today is independence.”
Once you know your parents wishes, it’s easier to transition to: “How can we help you do that?” Planning out how things will be paid, and by whom, is the key to keeping your options open, Franklin said. Without a financial plan, you won’t have many choices when the need for care arises.
In a perfect world, aging parents would be able to pay for their own care using their savings, pensions, Social Security or other resources. But in the real world, the price for care can be so astronomical, savings can dwindle in the blink of an eye.
“The cost of a nursing home, on average nationally, is $230 a day. That’s more than $7,000 a month,” Franklin said. “The cost today is one thing, but what are they going to be in the future? Over the past five years, they’ve increased 4 to 5 percent. At that rate, they’ll be almost double in 15 years or so. Even people who have saved, it’s still really a struggle.”
According to the Department of Health and Human Services, 70 percent of people who reach age 65 will need long-term care before the end of their life. And now that people are living longer, they’ll likely need the care for an even longer period of time.
But families have options. For those paying out of pocket, reverse mortgages are an option that let aging parents extract money from their homes, Franklin said. Another option would be long-term care insurance, which can pay for nursing homes, assisted living and home care needs not covered by health insurance or Medicare. However, premiums can be expensive and many people are denied coverage, Franklin said.
“The younger you are (when you buy it), the lower the cost,” Franklin said. “Most people get it at the average age of 57. It’s usually part of that retirement planning process. But an even more important consideration is health — you can’t get it when you need it.”
Unlike the new restrictions on health insurance, long-term care insurance companies can deny coverage based on health because the purpose of those policies is not to address an illness, but simply to take care of you in the long term, Franklin said. A full health disclosure is part of most application processes.
“If you’ve had a stroke, if you have diabetes, if you’ve had cancer, you probably can’t get long-term care insurance. In fact, you definitely can’t get it,” she said. “Even at age 57, we know that two out of five people are denied coverage altogether or pay a higher premium because of their health. The best time to get long-term care insurance is the earliest possible time when someone can fit it into their budget comfortably and qualify based on their health.”
Most people don’t get a policy that’s going to cover 100 percent of their long-term care costs, but instead work out a plan to cover only the portion they would not be able to pay on their own, Franklin said. You can also get a policy that builds over time so you have something in place now that can be added to later, she said.
“To me, insurance is supposed to be peace of mind,” Franklin said. “If you’re laying in bed at night worrying about paying the premium, well then that’s not bringing you what it’s supposed to. We work very hard to create a plan that a person can pay for without changing their lifestyle, yet have the assurance that there’s a cushion there.”
Government programs such as Medicare and Medicaid provide another option for paying for the care of aging parents. For long-term, non-healthcare related costs, many turn to Medicaid, Franklin said. However, public funding is limited and to qualify for Medicaid one must meet welfare standards, she said.
Attorney Kathryn Cockrill with Kuhn and Kuhn Law Firm said the key to Medicaid planning is doing it in advance, preferably five years before you need to qualify. In order to qualify, many people put most of their assets in an irrevocable trust.
“There are a lot of rules with Medicaid planning, it’s very technical,” she said. “You have to report certain assets when you’re trying to qualify for Medicaid. They’re going to look at the big picture: Everything you own and every transfer in the last five years — so your house, your bank accounts, your retirement accounts.
“If you’ve done pre-planning before those five years, you can set things up into a highly specialized type of trust in order to qualify for Medicaid. The trust puts re-titled assets out of your name and lets you protects assets such as family homes.”
Put it in Writing
On top of setting up a trust for Medicaid pre-planning purposes, there are several other reasons it might be a good idea to see an attorney when planning for long-term care. Wills and other estate documents should be updated, most importantly with durable power of attorney and the healthcare power of attorney in case your parents become incapacitated, Cockrill said.
The durable power of attorney appoints a person who can make financial decisions for your parents in the event they can no longer make them for themselves — including paying bills, investing money and selling real estate. The healthcare power of attorney names somebody to act on their behalf in making medical decisions.
If you set these documents up in advance, you can indicate them as springing powers of attorney, Cockrill said, meaning they won’t spring into action until the person is declared incompetent, usually after mental exams by two doctors.
“If your parents don’t have these documents in place and they become incapacitated and can’t sign them, you are left to have to go to the court to get permission to be appointed as a guardian to serve on behalf of your parent and make those decisions for him or her,” Cockrill said.
It’s also important to talk to aging parents about their living will, Cockrill said. Make sure the document is updated with their current wishes regarding tube feeding, nutrition, hydration and so on, in the case they become terminally ill or fall into a permanent vegetative state.
“You need to update those kind of documents, because how you were going to be treated in your 20s is going to be different than how you want to be treated in your late 80s and 90s,” Cockrill said. “So it’s a good idea to have those documents reviewed by an attorney every couple years.”
As uncomfortable as it can be talking about nursing homes with your healthy parents, it can seem even more morbid to talk about planning a funeral for someone who’s not even sick. Cockrill said that for this reason, many clients choose to pre-plan and pre-pay their own funeral as a gift to their children.
“Pre-paying your funeral is a wonderful gift to your children,” she said. “Typically, you can pay for everything up front for your kids. The funeral home will hold the payment in a national funeral trust account. The money doesn’t get earned until the funeral actually happens, but by paying in advance, you’ve locked in the rates of everything in-house.”
Those pre-planning their funeral can pick everything from their coffin to their burial clothing to the details of the service. You can pre-plan and pre-pay for your funereal by working directly with a funeral home, Cockrill said. If you move, the funeral home you worked with will transfer the money held in trust to wherever you’re going.
Asking for Help
Being the primary caregiver for one generation, let alone two, can be an emotional rollercoaster. Many resources can help adult children care for their aging parents, including bringing in a third party to manage all the details.
Using a geriatric care manager, a nurse or social worker who can orchestrate the details of your parents care, has become more popular in the last several years, Franklin said. A care manager can research and help with placement in nursing homes, organize home care resources, manage medical appointments and keep far-off family members informed.
To find one in your area, visit
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