There seems to be a universal problem with being in the “sandwich generation”: many of them are still taking care of their children, often into adulthood, even up to age 30.  According to financial sources, many adult children are faced with overwhelming college debt and are unemployed.  But the adult children of the sandwich generation are also dependent on their parents because of overspending resulting in a lot of consumer debt.

What would your financial advisers suggest?  They suggest that you focus on helping your children acquire the money skills necessary for financial independence and to create a timeline for your children to achieve that independence.  You need to teach them how to budget, save, and live within their means.  Help your children, rather re-teach them how to budget and maybe come up with creative ways to save on a daily basis.  If they are getting Starbucks everyday, teach them how to make their own coffee at home and save that expenditure.

You may also want to assist your children with their resumes and keep your ears and eyes open for any job, even if it is entry level.  An entry level position pays more than no job at all.  Teach them how to search for a job and not to be overly picky with unemployment levels what they are.  Allowing them to live at home without any sort of deadline for them to be out by will not motivate them to get up and avidly seek employment.  Stop enabling them.  If there is cut off to the free ride, they will most certainly do everything they can to make money and put food on the table.

As for the sandwich generation with teenagers in the household, you should still teach them about budgeting and saving.  Have them get a summer job or afterschool job.  As you cannot put them out of the household, make them work towards other things to teach a good work ethic.  Have them pay for their car insurance or else they cannot be driving.  That will almost certainly motivate a teenager.  This may put you in the middle, but it is for their own good in the long run.  Finally, consider sitting down with a financial planner to discuss setting up savings plans for your younger children to give them a head start.

There are certain tax schemes that the IRS is really cracking down on now that you must be wary of.  Many people are filing extensions this year, meaning that their returns don’t have to actually be in until October 15, so taxes don’t just go away after the dreaded April 15 passes.  If you are one of those people filing extensions, then make sure you know these tidbits from the IRS.  Sketchy tax preparers are on the rise and will often advise you to take illegal deductions; make sure you hire a reputable and trusted CPA if you hire someone.  The IRS is also making a point of scrutinizing retirement accounts in search of taxpayers who enter transactions that allow them to exceed the contribution limit of the IRA.  Many of these transactions are put together by dubious financial advisers, so like accountants, you need make sure you only use reputable, certified financial planners.  Make sure you carefully look into who it is you are hiring and check on their certifications before entering into any business engagement with them.

The decision about how to designate beneficiaries for retirement plans, insurance policies, and other assets may seem like a very simple decision.  Chances are, you want your closest loved ones to to inherit any money you have accumulated during your lifetime, so just putting their names down on the appropriate forms should be the end of it, right?  Wrong.

You can name just about anyone or anything as your beneficiary, including individuals, charities, and trusts.  And when you name a beneficiary, those assets pass directly to whomever you designate without having to go through probate.  In addition to this though, remember that your beneficiary designations will override any bequests you have in your will.  So always make sure that your beneficiaries match up to your will.

The first common mistake people make is not re-assigning beneficiaries after they tie the knot.  There are major life events at which you should always review your beneficiaries: marriage, death, birth of children, and divorce.  Estate planners and financial advisers alike will advise that you make it a point to review assignments upon annual review of your finances to make sure that everything lines up and is copacetic.  By the same token, you’ll also want to review your beneficiary designations if you or your employer has recently changed retirement plan or insurance providers, as your beneficiaries may not carry over to the new policy automatically.

Before you make your beneficiary designations, you need to understand the tax ramifications the inheritance may cause for them.  If you are leaving your retirement plans to someone other than your spouse, you should sit down with them and an accountant and discuss how and when the money would get distributed (This will weigh heavily on the determination of the tax burden).   If you leave it to your spouse, however, they can more than likely roll it over into their own IRA and not have to pay taxes on it until the funds are distributed.  You also need to consider that leaving money to someone is considered income and you may be effecting their eligibility for government assistance if you leave them funds.  You must also keep in mind estate taxes: they will have to be paid by someone.

You also need to be very specific as to how you want your estate distributed.  You may think your beneficiary will just know what to do with your money, but they don’t.  You are, in most cases, allowed to name multiple beneficiaries and contingent beneficiaries and specify what percentage of your estate they will receive: take advantage of this.  Don’t just assume that estate planning is for the uber rich;  everyone needs a plan.