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The “sandwich generation”

The “baby boomers” are the generation born after World War II, from 1946 through 1964.  The succeeding cohort, born from 1965 through 1980, has been dubbed “Generation X,” or Gen X for short.  They are the folks age 46 to 61 this year.

​The CPA Practice Advisor recently reported on a survey of 1,000 Gen X workers and their experiences with caregiving.  This included taking care of minor children (24%), adult children (23%), or older adults, such as parents or in-laws (17%).  Of those who are caring for aging relatives, some 37% are also taking care of minor or adult children—hence, the “sandwich generation.”

Caregiving involves a range of routine responsibilities, such as:

• providing housing;

• buying groceries;

• financial support;

• paperwork management;

• managing medical appointments and insurance;

• managing medications;

• personal care, such as bathing and dressing.

​It can be time-consuming work, almost like a second job without the pay.  Some 12% of respondents spend more than 30 hours per week on caregiving, while 31% spend up to 15 hours.  There is a pronounced negative impact on the workplace, with 54% reporting that caregiving increases their stress and risk of burnout, 40% have interruptions during the workday for appointments or emergencies, and 37% find it difficult to start and complete their work on time.

​Costs are also measured in money.  Some 19% reported tapping their emergency savings to cover caregiving expenses, 18% used their credit cards, and 17% reduced their retirement plan contributions.  Switching to a lower-paying but more flexible job was the solution for 12% of respondents, and 10% reported turning down a promotion because it would have interfered with caregiving responsibilities.

Article ©2026 M.A. Co. All rights reserved. Used with permission. 

Discretionary trusts

A completely discretionary trust is a trust where the trustee has complete discretion with respect to distributions of income or principal. This approach is an alternative to the incentive trust, which may have specific guidance included in the trust document. A completely discretionary trust differs from other trusts in the sense that a mission statement would not be contained in the trust agreement and some of the more formal requirements for meetings, etc., might not be included. Consequently, there would be no provisions in the trust agreement that could be used by a disgruntled beneficiary to challenge the exercise of discretion by the trustee.

​Mission Statement. When a purely discretionary trust is to be used, it is important for the family to adopt a mission statement, but the mission statement would not be contained in the trust agreement itself. The creator of the trust, usually a parent, would establish guidelines for the trustee to follow with respect to making discretionary distributions of income and principal, which would be contained in a memo or a letter to the trustee. Subsequent changes to the guidelines could be made by the creator of the trust and perhaps the adult beneficiaries. After the creator’s death, subsequent changes to the guidelines could be made by the adult beneficiaries, with or without the approval of the trustees.

​Important Provisions in a Completely Discretionary Trust. Exculpatory provisions, relieving the trustee of liability for exercising his or her discretion should be included in the trust document. Such a provision may eliminate a trustee’s liability in cases where the trustee perhaps should have been liable, putting a premium on naming the proper person or persons to serve as trustee.

​Compensation provisions should provide that the trustee who is playing such an important role in the financial affairs of the family is properly remunerated.

​Successor trustee provisions should be included to ensure that there is always a proper trustee. Usually this can be achieved by giving the current trustee or trustees the right to name his or her or their successors. In many cases it will be appropriate to give adult beneficiaries the right to remove the current trustee or trustees and appoint successor trustees, although certain requirements may be included to ensure that the successor trustee is qualified and trustees are not subject to inappropriate pressure from the beneficiaries with regard to the exercise of their discretion.

​The use of in terrorem and payment of litigation costs clauses may be advisable. Even though in many states an in terrorem clause, which provides that if any beneficiary challenges the discretionary authority of the trustee the beneficiary will lose his or right to distributions, may not be enforceable, the mere existence of such a clause may discourage such attacks on the trustee’s exercise of discretion. A provision requiring that any beneficiary who brings an action against a trustee pay any litigation costs in the event the beneficiary is unsuccessful may also discourage unwarranted attacks on the trustee’s exercise of discretion A provision providing for arbitration or mediation may also prevent unnecessary litigation expenses.

​Advantages. The completely discretionary trust perhaps provides for the greatest degree of flexibility. Also, the completely discretionary trust, with the proper trustee, mission statement, and guidelines, may achieve the desired objectives of the creator of the trust with regard to influencing the behavior of the beneficiaries. Such a trust may come closest to accomplishing the most important goals of the creator, a replication of what the creator would do if alive.

​Disadvantages. The completely discretionary trust puts a premium on the identity of the trustee. The completely discretionary trust may result in litigation over the trustee’s exercise of discretion. Although the trust agreement would be clear that the trustee’s discretion was not subject to review by the courts, the courts may nevertheless intercede when the trustee’s exercise of discretion is challenged by the beneficiary or beneficiaries. The beneficiaries may be able to force the trustee to disclose any precatory instructions the creator provided to the trustee.

​To learn more about discretionary trusts, make an appointment to meet with one of our officers at your earliest convenience.

Article ©2026 M.A. Co. All rights reserved. Used with permission.