In recent years, sandwich generation planning has emerged as a major elder law issue. There is an unprecedented aging of the population underway, because the baby boomers are reaching retirement age. As people get older, role reversals can enter the broader family dynamic.
People who obtain senior citizen status often need help in various ways. During this period of time, their children may provide support, but they are going to have their own parental concerns as well.
Young adult children will often be going to college, so there are financial realities that must be addressed. Plus, people who are entering the middle-aged phase of life are going to be looking ahead toward their own retirement years, so there are added financial pressures.
If you are a member of the sandwich generation, long-term care for your parents will be a source of concern, and you should understand all of the facts so that you can make sound recommendations. Many people are not aware of the fact that Medicare does not pay for living assistance.
Crossing your fingers as you hope for the best with regard to your health is not a very sound strategy, because the majority of elders will someday need help with their day-to-day needs, and many will reside in nursing homes.
Nursing home care is exorbitantly expensive, with the annual charge for a private room in the Sacramento area exceeding $150,000. Many elders require multiple years of care, with 10 percent of people in nursing homes residing in the facilities for at least five years according to a particular study.
Your parents probably want to leave inheritances to family members, but long-term care costs could consume all of their resources. However, Medi-Cal planning strategies can be implemented under these circumstances.
Medi-Cal is California’s version of Medicaid, a government benefit program that can pay for long-term care under certain circumstances. In fact, many older persons who are residing in nursing homes are enrolled in the Medi-Cal program.
Since Medi-Cal is a need-based program, people often give gifts to their loved ones before they apply for coverage. Your parents could potentially go this route if you are a member of the sandwich generation. Direct gift giving is a possibility, but a Medi-Cal trust can also be utilized. Such transfers require special planning and should not be attempted without the assistance of an experienced and qualified elder law attorney.
With an income only Medi-Cal trust, your parents could continue to receive income from the earnings of the trust while they are living independently, but the principal would not be counted by Medi-Cal evaluators.
Learn More About Sandwich Generation Planning
Our firm can help if you would like to discuss sandwich generation planning with a licensed legal professional. We offer consultations, and you can send us a message through our contact page to set up an appointment: Grand Forks ND Elder Law Attorneys.