Estate planning

For the “sandwich generation,” the meat is the leaves – San Bernardino Sun

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For the sandwich generation of caregivers, having the necessary paperwork for children and parents is key to managing complex family issues. (SCNG illustration using iStockphotos)

The “sandwich generation” is typically defined as parents between the ages of 40 and 60.

This is usually the stressed group of people caring for growing children and aging parents. It’s a lot.

But there’s good news – there are ways to make these commitments easier, and there can be something for you too, besides good karma.

The need for agreement

For minor children, it is clear that the parent(s) are responsible. As parents get older, if there is more than one child, assigning responsibilities can be difficult. Don’t wait until there is an emergency to discuss with your parents and siblings who will be responsible for what. Your parents will likely want you to stay independent for as long as possible.

But at some point, it may be wise to have someone else with the power to act as well. And in case of disability, where will your parents live? Who pays for what? Who will make healthcare decisions? Who will make financial decisions?

Unfortunately, I often see fights between siblings. Sibling One calls the mother or father to a lawyer to name themselves a trustee and power of attorney or add them to the bank accounts.

Then the Sibling Two come and take mom or dad to another lawyer to get the same documents. Perhaps each of them believed that they were acting in the best interests of the parents. However, such behavior confuses the parents, can sometimes cause irreparable damage to the siblings’ relationship, and can lead to guardianship over the parents – which is far more expensive and time-consuming than honest, open conversations when the mother or father still has the capacity. .

Have the conversation. And get the documents in place.

Again, it’s the documentation

As I mentioned in the last columnWhen your child turns 18, they are a legal adult. This means that you no longer have the right to make decisions on their behalf, and you cannot obtain information about them from third parties (schools, hospitals, banks). This can come as a shock to parents, especially in an emergency situation.

Losing a parent’s decision-making skills can be equally difficult for you and for your dad, who up until this point had been making his own decisions and even once made decisions for you.

Talk to your parents about their finances, future plans, and care. Make sure they have the necessary documents in place, lead by example – prepare your own, and make sure any children of yours 18 or older have them too. If your parents know that everyone else does, they may feel less out of control.

Advance health care directive

First, every adult needs a health care advance directive (also known as a health care power of attorney) and a HIPAA form.

If you, your adult child, and/or your parent reside in California, use the California legal form (last updated in 2019). The form requires either two witnesses whose names are not mentioned in the document (and at least one of whom is not related) or a notary public.

An advance health care directive allows a named agent to make health care decisions for the principal when he or she is unable to do so. It also provides some guidance for the types of decisions the principal wishes to make. The named agent is also the party with authority for postmortem affairs (autopsy, organ donation, funeral home selection, cremation, etc.).

The HIPAA form allows a party to designate third parties with whom medical personnel can communicate. This can be very important as the parents get older. Being able to speak directly to health care providers may help you understand sooner rather than later if health or capacity problems arise.

Furthermore, if your child or parent is admitted to the hospital in an emergency situation, you will be able to get the information you need using the HIPAA form.

permanent power of attorney

As with your adult children, in addition to health care directives, ask your parents to sign a durable power of attorney authorizing you (or a sibling or other responsible party, as agreed) to make decisions and act on their behalf in their incapacity or voluntariness. With a properly executed and activated power of attorney, the designated agent will be able to access bank accounts, pay bills, and handle insurance claims and legal matters, among other things, on behalf of your parents.

A power of attorney does not take away any rights from your parents – and it may be important for them (and you) to hear that. A power of attorney only allows the agent to act on his behalf as well.

This can be important for monitoring bank accounts for unusual spending, forgetting to pay or double billing, or systemic fraud. Older people are often the victims of scams. Regular audits of bank accounts can spot fraud early.

Estate planning documents

Do your parents have their own estate planning documents? At a minimum, there should be a will stating who will act as executor and how they wish to distribute their property. If they have assets over $184,500 with no co-owners, beneficiaries, or “payable upon death” designations, a will is required unless there is a trust. The probate process is a lengthy and expensive process in California and should generally be avoided.

But do not rush to add your name to the accounts or deeds of your parents, even with the good intention of sharing it with your siblings. There are potential consequences of gift and property tax that should be discussed with an attorney.

Instead, a living trust should be considered if your parents still have the mental capacity to do so. The trust will also determine who will become the guardian in the event of your parents’ incapacity. If your father uses a trust to transfer assets upon death to his children, he may be able to provide you with some asset protection, including protection from future ex-spouses, by leaving the assets to you in a trust that is not fully distributed but instead gives you control and benefits specific.

This is not a “do it yourself online” trust, so please consult an attorney.

Note: If your parents have estate planning documents, but they are more than five years old, ask that they be updated. Forms and laws may have changed, but it’s also a good idea to have documents that reflect their current wishes. If your parents are married, and they were trusted before 2012, definitely check it out. There was a major change to the tax code in 2012, which means that legacy trusts may be more cumbersome than is necessary now.

Review your documents

Have you named other people (perhaps your parents) as successor trustees or power of attorney for your trust? Are they named as guardians of your minor children? Does this still make sense?

Each adult — children over 18, you, mom and dad — must have a health care advance directive, HIPAA form, and a standing power of attorney. An adult who owns assets of any kind should likely have a will and trust.

You have a responsibility to your children and parents, so why not make it easier on yourself by planning ahead?

Teresa J. Ryan is an attorney practicing estate planning and trust management in Riverside and Paso Robles, California. She is also the New York Times bestselling author of The Dog Lived (and So Will I) and Poppy in The Wild. You can access it at Teresa@trlawgroup.net

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