BY: Clark Howard
Taking care of two generations -- your parents and your children -- can mean major life changes for young families. If you're part of the "sandwich generation" caught between these obligations, here's some advice for you...
1. Consider a long-term care policy
If you are 50 or 60, you're in the prime age to buy long-term care (LTC) insurance, a kind of policy that pays for care in a nursing home, assisted living facility, or your own home as you age.
Shopping for LTC insurance can be simplified by contacting an independent agent who can shop quotes from a variety of companies for you. The website of the American Association for Long-Term Care Insurance is a good starting point.
When shopping for LTC insurance, look for a lifetime benefit--or at least five years' coverage if that's too costly. Also, be sure the policy adjusts for inflation so the benefit is not subpar when you need it.
Finally, you only want to consider companies that have been rated "A++" (by A.M. Best), which means they are of the highest financial strength. Visit AMBest.com to search ratings. Free registration is required.
2. Get a will in place
If you have kids, you need a will for the simple fact that if you don't have one, the state will decide who raises your kids. That's the reality in the absence of any written direction from you.
Some people use the excuse that doing a will is too complicated and too expensive for them to undertake. I don't buy that. It's true that if you have a complicated life--maybe you own your own business or have a blended family -- you do need to go see a lawyer who specializes in wills, estates, and trusts.
However, if you have a relatively simple situation, I like the WillMaker software that you can pay to use through Nolo.com. They do a great job of asking interactive questions to guide you through the will completion process.
If you get confused along the way, stop and see a lawyer. Or push through and know that it is much cheaper to have a lawyer review the will you've self-prepared than to actually prepare one for you from scratch.
3. Get a durable power of attorney in place
A durable power of attorney (DPA) is a document which allows your parents (the principal) to authorize you (the "attorney-in-fact") to make financial/legal decisions and to make financial transactions on their behalf.
There are advantages to having a lawyer draft a DPA. First, an attorney-drafted DPA can be drafted to meet your individual needs. Although there are pre-printed forms available, they are worded broadly and do not give you as much flexibility. Second, since DPAs are subject to abuse, it is a good idea to meet with an attorney to make sure both the principal and attorney-in-fact understand the document and the attorney is assured of the principal's competency.
4. Protect your children's identities
It's an unfortunate fact that kids are targets for identity thieves. According to the 2012 Child Identity Theft Report, children are 35 times more likely to be subject to identity theft than an adult.
Thankfully, AllClearID.com is now offering a new free service called ChildScan. The service combs through credit records, employment records, criminal records, and medical accounts to find out if a crook has been using your kid's Social Security number. Visit AllClearID.com/Child for more details.
Crooks target kids because they're ideal candidates for identity theft--no credit history, but a clean Social Security number. As a parent, you want to make sure nobody messes with your children. And the sooner you find out the better, because if it goes on for a decade or more, it can take years to clean up.
For more tips to save money on family living, see the life family and lifestyle section of ClarkHoward.com.