Americans are providing unpaid care to loved ones at record rates. According to AARP, 21.3 percent of Americans are providing care to children under the age of 17, and 19.2 percent are providing care to adults over the age of 18. 24 percent are now caring for two or more generations in their family. The prevalence of caregiving has lent itself to the birth of a generation: Generation C.
This generation is presented with an unprecedented set of challenges. They are dealing with the economic and social impacts of a global pandemic, while juggling taking care of an aging baby boomer population. Many are also providing care to their own children as well.
Planning ahead for the future is the key to each family’s success. Changes in the family dynamic can always be a tricky adjustment, but having an Estate Plan in place can help prevent a crisis.
Here are 5 estate planning tips for Generation C:
1. Discuss estate planning with your parents and family
Transparency is key when it comes to estate planning. All too often we witness cases in which there is no communication. A loved one passes away, and chaos ensues because family members are surprised and can’t get on the same page.
Talking about wealth planning and death is admittedly hard, however. It is entirely understandable why so many Americans struggle to have open conversations with family members about estate planning. However, demystifying and normalizing a topic is critical for its success. Discussing estate planning with your parents, your family, and even your friends can inspire others to do the same. Further, bringing your Estate Plan to the table can provide your loved ones with peace of mind knowing that protection measures are in place.
Luckily, we have some tips and strategies for you. Be sure to check out these guides that will help you plan how to have the conversation:
2. Set up guardianship for children/minors
One of the most powerful tools of estate planning is setting up a Guardianship for any children who are minors, or adult dependents.
A Guardianship is a legal document used to establish who will take care of your dependents should pass away or become incapacitated. This might be a child, a child with a disability, or an elderly parent who is unable to take care of themselves.
The legal guardian has the agency to step in and assume all responsibilities of care. Your estate also should arrange for how to take care of basic needs such as food, housing, clothing, and education. This is obviously a step you should not skip if you have any dependents.
Learn more about how to set up a guardianship here.
3. Appoint Power of Attorney
Also, be sure to take care and appoint your Power of Attorney (POA). This is an estate planning mechanism that allows you to appoint another person to serve as an agent on your behalf. If you were to become incapacitated, they can step in and make major decisions on your behalf.
The COVID-19 pandemic highlighted the importance of appointing a POA. Many Americans experienced sudden incapacitation for the first time. In some cases, they were isolated in a hospital bed, unable to communicate with the outside world. This would be a scenario in which your POA, your agent, could step in and manage your daily affairs such as pay your bills or manage your business.
Note that there is also a separate type of POA, your Health Care POA. This is your proxy who can step in and make medical decisions on your behalf.
4. Consider setting up a Special Needs Trust
If you provide care to a child or adult with special needs, it may be wise to set up a Special Needs Trust. This is a special type of Trust that is set up for the purpose of taking care of a person with a disability.
The Trust is essential because it can supplement your dependent’s government assistance without inadvertently jeopardizing it. You will also name a Trustee who will manage this Trust for the benefit of your loved one should you pass away.
Learn how to set up a Special Needs Trust here.
5. Create a Living Trust
Last but not least is the Living Trust. Any adult over the age of 18 should absolutely have a Living Trust in place.
A Living Trust is a type of Trust that you create during your lifetime. You would transfer property and assets into the Trust, earmarked for the eventual benefit of a designated loved one. You also appoint a Trustee who is responsible for managing these assets on your behalf.
Here are the advantages of a Living Trust over other types of Trusts. During your lifetime, you are still considered the legal owner of these assets, and thus you get to continue using and benefiting from them. Further, you can nominate yourself as the Trustee such that you continue managing the assets.
In the event of your passing, the Living Trust is automatically converted to an irrevocable Trust, meaning that it can’t be changed. The remaining assets are set aside for the benefit of your beneficiary. Even better, these assets are owned by the Trust and therefore are not a part of your estate and will not be subject to the probate process. Your loved ones will have access to their Trust funds immediately, or as soon as the terms of the Trust allow.
If you set yourself as the Trustee of the Trust during your lifetime, it is imperative that you also set an alternate Trustee who will step in when you pass away.
This is a mechanism that allows you to set up a Trust now to protect your assets. That way, you’ll have peace of mind knowing assets and property earmarked for your child, for example, are already protected should anything unexpected happen.
Update Your Estate Plan Today
Being a member of Generation Caregiver is no easy feat. Although we will always have caregivers making up our fabric, the job seems a little tougher than ever. We’re sandwiched between an aging baby boomer generation (one of the largest ever) and the young generations we’re cultivating beneath us. Further, we’re dealing with a global pandemic and economic duress.
These times are a better reminder than ever to get our affairs in order and ensure our Estate Plans are in place. This is a great time to review and strengthen your Estate Plan, and continue updating it as our circumstances shift and evolve. If you don’t have an Estate Plan yet, now is a great time to start.
Whether you’re totally new or experienced in the world of estate planning, we’ve got your back. At Trust & Will, we make it affordable, accessible, and easy to set up your Will, Trust, and healthcare documents. No matter how pressured or busy you have, you can still get something in place in a matter of minutes. Even better, you won’t even have to leave your home! Find out how to create your Estate Plan today.
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Trust & Will is an online service providing legal forms and information. We are not a law firm and we do not provide legal advice.
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