Estate Planning Issues Affecting the Sandwich Generation

If you're a member of the Sandwich Generation, make sure your parents and adult children have the necessary estate planning documents in place.
If you’re a member of the Sandwich Generation, make sure your parents and adult children have the necessary estate planning documents in place.

July is National Sandwich Generation Month, a time to honor those who are caring for both their children and their aging parents. This is a particularly stressful time for members of the Sandwich Generation who may not only be parenting their children but also spending the last few months homeschooling them. Older children who have lost their jobs or were unable to return to college after spring break due to the coronavirus may now be living at home. At the same time, members of the Sandwich Generation may be acting as caregivers for parents who are no longer able to look after themselves, or who are at a higher risk for contracting COVID-19.

Some of the stress of caregiving can be alleviated by making sure your aging parents and adult children have legally valid and up-to-date estate planning documents in place, and if they do not, encouraging them to have these important documents prepared. This is a relatively simple step to ensure that there will be no delays or uncertainty if you have to take action in an emergency to make medical and financial decisions for them. If they have the necessary estate planning documents in place, you will have the peace of mind in knowing that you will be able to avoid delays when you need to act quickly to preserve their safety and well-being.

What estate planning documents should you have for any person in your care?

  • A financial power of attorney – This will allow you to pay bills, manage financial accounts, file tax returns, talk to insurance companies, deal with issues related to benefits, hire a caregiver, and sell property on behalf of your parents. A financial power of attorney is also helpful in the event you need to handle financial matters on behalf of your adult child (over the age of eighteen), for example, cashing a paycheck for your child or signing a new lease on your child’s behalf.
  • A medical power of attorney – A medical power of attorney enables you to make health care decisions for your parents, if they are unable to do so themselves.  A medical power of attorney is also important for your children who are 18 or older. Once your child reaches age 18, you no longer have the authority to make medical decisions for your child.
  • A HIPAA Authorization – The Health Information Portability and Accountability Act (HIPAA) requires medical records to be kept private unless an individual consents in writing to sharing of protected health information with a named individual. If you are your parents’ caregiver, they should fill out a HIPAA authorization permitting your parents’ health care providers to keep you informed about their medical conditions and treatments. You should also keep in mind that you are not authorized to receive any medical information regarding a child of yours who is 18 or older. If your adult child wishes you to be involved in his or her health care you need a HIPAA authorization signed by the child allowing you to receive his or her medical information.

It is crucial for your parents to put these estate planning documents in place before they develop any cognitive loss that would prevent them from having the capacity to sign a legal document. If they develop dementia, for example, and are not able to understand the objective or content of a power of attorney or other document, they will be legally unable to execute the document. In that case, you will have to go to a court and ask to be appointed your parents’ guardian to manage their health care and financial affairs.

It is also important that these documents be put in place by your adult child, regardless of any health conditions, because once your child is a legal adult, you can no longer automatically act on your child’s behalf. The worst case scenario is that your adult child is unconcious or in an accident and you are unable to quickly get information from your child’s health care providers.

Members of the Sandwich Generation do not always remember to take steps to lighten their load. But one important step that can make things easier for you as a caregiver is to make sure that your parents and adult children have the necessary estate planning documents in place so that you can quickly make decisions on their behalf if you are called upon to do so.

For more information see https://galligan-law.com/everyone-needs-an-estate-plan/

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Estate Planning for Our Pets

A complete estate plan should address what happens to your pets when you are unable to care for them.
A complete estate plan should address what happens to your pets when you are unable to care for them.

Many people laugh when they hear about estate planning for pets. They think of outrageous stories of a dog or cat being left millions in a trust. But have you ever considered what would happen to your pets if you were not around to take care of them?

It’s easy to assume that someone will step in to care for your pets after you pass away, but the reality is, unless you have made arrangements ahead of time, your pet could be released onto the streets, dropped off at the shelter, neglected, or euthanized. In the best of circumstances, your pets might not get the special care they need if you have not left behind instructions regarding their special food, medications, and other details that would help someone care for your pet the way you would have.

The simplest way to make sure your pet will be cared for after you’re gone is to talk to one or two people to get their commitment to either take your pet into their home or find a good home for your pet. You can then include a short paragraph in your Will or living trust stating who should get custody of your pet. You can even leave the person who agrees to take your pet a small sum of money as a token of your appreciation.

If you are unable to find a person to agree to take your pet, there are organizations dedicated to the care of pets in exchange for a monetary gift to the institution. These organizations usually require that you make arrangements for the pet’s care during your lifetime. Your estate planning attorney should be able to give you more information regarding the organizations that offer these services.

Pet trusts are becoming more and more popular as a vehicle for providing the funds to care for pets after an owner’s death. If you want to leave money for the care of your pets after you are gone, a pet trust will make sure that the funds are spent on your pet and not used for other purposes.

You also need to consider what happens if you are alive, but unable to care for your pet due to a disability or incapacity. That’s why you should include provisions in your power of attorney allowing your agent to make arrangements for the care of your pet when you’re unable to do so, yourself. Your power of attorney should also allow your agent to expend funds for the care of your pets.

In any event, you should compile a set of instructions for your pet’s caretaker to follow. If your pet needs to be fed a certain type of food at precise times of day, prefers a special toy, has a specific bedtime or needs to be walked three times a day in a specific park near your home, you can include all this information in the instructions.

Many of us consider our pets as are part of our families. As such they need to be included in our estate plan, along with everything else we treasure.

Reference: The Harvard Press (May 14, 2020) “COA speakers urge pet owners to plan for their animal’s future”

 

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Dividing Personal Items After Death

Many executors wonder how to distribute personal items after a family member's death.
Many executors wonder how to distribute personal items after a family member’s death.

Sometimes, deciding how to divide a family member’s personal items after death can lead to more conflict and bad feelings than dividing up cash and other property.  Many executors wonder how they can do this without causing rifts in the family.

Minneapolis Tribune’s article entitled “A clever way to divvy up items after a parent’s death” describes an unusual plan one family had to divide their mother’s personal property after her death.

According to the article, after their mother’s death at age 93, the co-executors, a brother and a sister, created an inventory of 724 items in her estate that had monetary or sentimental value. These included things like furniture, artwork, oriental rugs, cutlery, china, a piano and a car. They didn’t include their mother’s jewelry, books or linens, or her silver, gold and collectible coins. The four siblings (including the co-executors) all agreed to sell the coins and to deal with the many books, linens,  jewelry, and other items more informally.

The family decided not to follow the usual process of taking turns to choose items they wanted. With so many items, that could take a while. Instead, the co-executors gave each sibling an inventory of their mother’s personal property, with the request that each sibling indicate on the inventory the items he or she wanted. This resulted in the 724 items of personal property being divided into three groups: (a) items in which no one had an interest; (b) items in which only one person had an interest; and (c) those desired by two or more siblings. The items in which no one had an interest were sold or given away. The items wanted by only one person went to that person.

The co-executors then distributed to the siblings a list of the items in which more than one of them had expressed an interest. Each sibling was “given” 500 virtual poker chips that he or she could use to bid for the contested items. However, prior to the bidding deadline, the siblings could talk with one another about their intentions and whether they could come to an agreement regarding specific items. Several of the siblings had bid for items in a general category, such as family pictures, bookcases and oriental rugs. They were able to agree among themselves who would receive which items from those general categories, thus preserving their virtual poker chips for what they really wanted.

After the final bids were in, the co-executors announced who won each item, but, to avoid possible conflict or disagreement on values, they did not reveal how much was bid for each item.

Finally, when all the allocations were determined, the co-executors calculated the value of all the items of personal property received by the siblings and readjusted the estate’s cash distributions to ensure that everyone came out in the same place financially. The most valuable items were a 1919 Steinway drawing room grand piano valued at $25,000; a 2005 Toyota Camry valued at $4,500; and some oriental rugs with a total value of $13,975. Those who got the more valuable items had to pay their siblings something for them, with a total of $17,500 trading hands.

Though it was time-consuming, the process avoided the tensions that sometimes result when personal property is distributed. The siblings involved believed their system was fair and even brought them closer together.

One thing to remember is that you don’t have to leave it to your executor to decide how to divide your personal property. You can leave your executor written instructions on how you wish certain items of sentimental value to be distributed. See https://galligan-law.com/how-a-letter-to-your-executor-or-trustee-conveys-your-wishes/

Reference: Minneapolis Tribune (Feb. 25, 2020) “A clever way to divvy up items after a parent’s death” 

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