In late summer of 2002, Liz Dobbs and her husband were anticipating a severe case of empty nest syndrome as they helped their only son prepare for university.

Little did Dobbs, a senior development officer for the Kingston Hospitals Joint Advancement Foundation, know that, only weeks after dropping their son off at university, her husband, 53, would die suddenly of a heart attack. “I went from three in the house to one,” she says of that difficult time.

Her father, to whom Dobbs was particularly close because he had raised her and her brother by himself, stepped in with the promise to keep her company at her home for a few weeks to help her adjust to the empty house. Two nights into this arrangement, however, he had to be rushed to the hospital with cardiac failure. “This was just the beginning,” says Dobbs of what ended up being an ordeal that lasted almost two years.

During this time, she scrambled to find proper care for her father as his health waxed and waned, while trying to fulfil the commitment she and her husband had made to her son’s education costs. “I promised my son that, as long as I could, I would provide the level of support we had promised him,” she says.

Welcome to one of the more dramatic examples of the so-called “sandwich generation.” According to Statistics Canada, in 2002, about 27% of Canadians aged 45 to 64 with unmarried children in the home were also caring for a senior. More than eight out of 10 of these individuals juggled work outside the home, causing some to reduce their hours, lose income or refuse job offers. Women were more likely than men to be “sandwiched” and, on average, provided more hours of eldercare a month (29% of women, compared with 13% of men). Although sandwiched workers felt satisfied with life in general, they were more likely to feel stressed than their caregiving-free peers, according to the report.

So, what can an advisor do to help?

> Pay Attention. Financial advisors need to be aware of the financial and emotional demands faced by clients in the sandwich generation. Demographic trends — aging baby boomers, delayed childbearing, divorce and the shift toward more blended families point strongly to the possibility that, down the road, the ranks of the sandwich generation will grow. That means more clients will be wearing both childcare and eldercare hats at the same time.

That’s the situation for Marion Goulding, 48. The stay-at-home mom of three kids between the ages of nine and 15 in Beaverbank, N.S., says for several years she has been juggling the responsibilities of taking care of her children and regularly checking in on her parents, who had had her later in life. “Although they didn’t ask for help, I felt like I needed to be helping them,” she says.

> Don’t Make Assumptions About The “Typical” Family; It No Longer Exists. “There is chronological age and financial age,” says Patricia Lovett-Reid, senior vice president for TD Waterhouse Private Investment Advice in Toronto. Lovett-Reid, who led a panel discussion on the sandwich generation in April and has several more planned for the fall, points to her own life as an example. She has two grown children, ages 18 and 20, with her ex-husband. But in his current marriage, he also has five-year-old twins. So, while they are at a similar stage of life chronologically — she’s 48 and he’s 53 — their financial situations and obligations over the next few decades will be very different. “All bets are off as to what we thought was a normal life cycle,” she says.

> Help Clients Face The Unknown. In many cases, according to Lovett-Reid, grown children don’t know what strategy their parents have in place when it comes to end-of-life planning. “There hasn’t been full disclosure,” she explains.

This is no surprise, as both mortality and money are taboo subjects in many families. She again points to her own situation. Last Christmas, she says, her parents tried to hand her an envelope with important documents pertaining to their demise. “I was totally uncomfortable with it,” she says.

> Prepare Clients For A Variety Of Situations. Stay-at-home mom Goulding was forced to ramp up her eldercare commitment when her father died about 18 months ago. Her mother, who has Alzheimer’s, needs care 24/7. If Goulding’s father hadn’t had the financial resources in place and available for Goulding, there’s no way she would have been able to make the arrangements she made — initially hiring several people to care for her mother in her home and then finally moving her into a nursing facility.

@page_break@Life throws curve balls, and advisors need to let clients know of the possibilities, says Lovett-Reid. She points to one family she met who had decided to put off retirement in order to pay for a child’s education, only to discover suddenly that an elderly parent was very ill. “There just wasn’t enough money to go around,” says Lovett-Reid.

> Ensure Client Documents Are Up To Date. Goulding had been entrusted with her parents’ money for years and knew where her father kept his important documents. However, his will — created over two decades ago — still named Goulding’s mother as the executor. This forced Goulding to seek power of attorney after he died. While her mother was happy to sign — “She had never handled the finances and never wanted to,” Goulding says — this can be a messy and contentious route.

It’s always better if power of attorney is arranged when a person is fully capable of managing his or her affairs, according to the president and founder of Eldercare Canada, Pat Irwin.

> Get Comfortable Dealing With Sensitive Topics. When drawing up a financial plan, it makes sense for an advisor to ask the tough questions so clients — those with parents who may eventually be in need of extra care, or those who are parents themselves — will be encouraged to seek details and share information with family members.

Jonathan Flawn, a certified financial planner at Page & Associates in Richmond Hill, Ont., says family members need to know whether everyone has current wills and powers of attorney.

> Bring All Of The Parties To The Table. “In terms of planning, the best way to deal with the whole intergenerational thing is to be involved with all the generations,” says Flawn, who has a number of intergenerational client families — although not as many as he would like.

“The children are often quite independent and they have their own relationships that they’ve developed with other advisors, and they don’t necessarily welcome the parent imposing their advisor on the child,” he says. “That goes the other way, too.”

> Don’t Leave Out Any Parts Of The “Sandwich.” Ensuring that potential eldercare and childcare responsibilities are taken into account when making retirement projections for clients is one thing. But it’s just as critical to recognize that some clients might not be in the sandwich generation. Instead, they’re the top half of the sandwich — the older parents who may prove to be a burden if they’re not prepared. Flawn’s client base is made up largely of these older Canadians, and he considers it his job to devise strategies for them that will not require too much intervention by their children.

> Try To Understand A Family’s Dynamics. Discerning the intricacies of family circumstances and relationships is key to coming up with a fair plan, according to Sue MacKenzie, certified financial planner at Newcombe Financial Inc. in Winnipeg. It can be frustrating, for example, to notice one adult child taking on all responsibility for eldercare while siblings — who often are, ironically, more financially comfortable — shirk any obligation. But plans can be put in place to help the child who is doing the bulk of the work.

Also, knowing about the effects of sacrificing too much to eldercare — the love/hate cycle that can develop when adult children quit their jobs to care for a parent or invite a parent to move in, for example — can help clients make more sensible and balanced decisions, MacKenzie says.

> Present Scenarios To Clients. Maureen Frey, a fee-for-service CFP and chartered accountant/partner at Meyers Norris Penny LLP in Prince Albert, Sask., says providing worst-case scenarios can be the best way to drive home the message that preparation is key because it’s almost impossible to live a life without roadblocks. “I scare clients a little bit and tell them about the meetings I have with families after a death,” she says. “That is the worst time to do estate planning because people are so emotional.”

> Encourage Clients To Disclose Final Decisions To Their Families. Frey has seen too many situations in which a family is rocked to the core by a parent’s will. Perceived favouritism, for example, can open up old wounds, leaving the family in disarray. Instead, discuss things up front to preserve family harmony.

“If you are giving the family cottage or all the farmland to one child and not the other, let them be mad at you instead of their sibling,” Frey says. “Explain to them your reasons and have it out in the open so they can be mad and get it over with and go on with things.”

> Provide Solutions. Long-term care insurance is one of MacKenzie’s top picks in terms of products that will help clients navigate the uncertainty of aging. The knowledge that there is another way to generate regular tax-free income can ease the minds of those heading into retirement, she says: “It is something I make sure all those pre-retirement people know about because it can protect [their] assets, too.”

She prefers that option to depleting the RRSP nest egg when it comes to paying for basic requirements such as needing a personal nurse for a short period of time, she says: “They have a safety net.”

> Offer To Be A Second Set Of Ears. By going through the eldercare arrangement process at least once with top clients, advisors will have a better idea of what clients may face, according to Dobbs, herself a former private client services manager. When a client needs to speak to a social worker about levels of care, for example, the information can be overwhelming. An advisor can take notes and help — and then be able to pass this information along to other clients.

“There’s a potential opportunity for advisors,” Dobbs says. “They will learn, too.” IE



Prepare clients for the financial crunch ahead



Many people who feel they are part of the sandwich generation talk about the emotional burden of being stuck in the middle, says Netty Vogels, a certified general accountant, certified financial planner and elder planning counsellor at Vogels Financial Inc. in Vancouver. But that will change as the older generation, which saved its money, gives way to the debt-happy boomers, she says. “The next level is going to be the financial crunch.”

The rumblings of this uncertain future can be heard already as some boomers head into retirement with debt. “We are the ones who are not going to have the money!” says the 55-year-old Vogels, adding that credit card debt in particular is a big problem for the baby-boomer generation. Yet their children, burdened with their own loans, are not going to be in any position to help out, she adds.

Vogels has extensive personal experience with the difficulties of eldercare, and she does not hesitate to share it with her clients: “I believe what I went through with my parents has given me a lot of tools to help my clients.”

Her mother and father both now live in an extended-care facility. But there was a period when her mother, who suffers from dementia, was in a home, while her father was staying in the apartment into which the couple had moved in an effort to remain independent after they were both in a car accident. After her mother, who had received government-covered home-care support, moved out, her father still needed his own home care, she says.

This sudden ballooning of expenses — two rents to pay instead of one, and nursing or home-care costs — is not unusual when it comes to eldercare, Vogels says: “When my mom moved into the home, my parents’ expenses tripled.”

Incidentally, her parents lived a five-hour drive away, and Vogels visited them almost every weekend for more than a decade.

Vogels says her client roster, which fluctuates between 600 and 700 clients, is made up primarily of older Canadians who have taken pride in frugality and saving, making the financial issues less burdensome. But, if Vogels feels it is necessary, she will check in with their children and make sure the children understand what the next steps are that need to be taken for an ailing parent.

Vogels says she understands the denial and fear adult children feel when they are faced with their parents’ demise. But having gone through it herself gives her some credibility when making these difficult calls, she says: “I am the third party, non-threatening and removed.”

Vogels also ensures that she is able to offer clients and their children a list of resources that might be helpful, including lawyers, social workers and home-care support. She recognizes that this goes well beyond what many advisors do, but she considers it rewarding work. “You are a therapist,” she says. “I’m not kidding.”

In fact, she has very strong opinions about how an elderly parent is best cared for — and she’s not afraid to share them with her clients or their children. She has a number of clients, for example, who insist on having their parents live with them, in some cases taking on bigger mortgages in order to accommodate a downstairs suite, for example. “That is something I totally discourage,” she says.

She has seen too many situations in which the parents have had to move into an assisted-living facility, meaning that part of the mortgage payments can no longer come out of the parents’ savings. “You’ll see how this can backfire when it comes to the next stage,” she says. “Your mother goes into a home and her expenses go with her.”

Vogels says that her ideal scenario is the elder who owns a home so that this equity can be used to top off whatever pension money is coming in once it becomes necessary to sell the house. She will put about two-thirds of the money from the sale of the home into a five-year annuity to cover rent. For the next five years, she will recommend something fairly secure with some growth.

The final third of the money is put into long-term investments, with the children’s input, she says: “‘In all probability,’ we’re saying, ‘This is your money’.”