.png?width=1080&height=1080&name=LinkedIn%20with%20Light%20Blue%20Background%20(1).png)
.png?width=1080&height=1080&name=Facebook%20with%20Light%20Blue%20Background%20(1).png)
.png?width=1080&height=1080&name=Instagram%20(1).png)
How to Use Tax-Loss Harvesting to Potentially Offset Gains and Save Money
Learn how tax-loss harvesting can help reduce capital gains exposure and support long-term planning strategies for high-net-worth investors.
Learn how to balance the financial needs of aging parents and children. Explore planning strategies for high-net-worth families navigating multigenerational support.
Building a Financial Plan to Support Aging Parents and Kids
Balancing the financial needs of both aging parents and dependent children is a reality for many individuals in the so-called “sandwich generation.” For high-net-worth households, the complexity can be even greater, due to larger asset bases, more involved estate planning needs, and the desire to pass on wealth across multiple generations.
The most effective plans take a long-term view and integrate support for loved ones into a broader strategy that also accounts for your own financial goals.
Start with a holistic multigenerational plan. Here are some key steps and considerations to build around:
- Evaluate cash flow needs and available resources across all generations
- Plan for parental healthcare, housing, and long-term care expenses
- Structure education and financial support for children in a way that aligns with other priorities
- Review legal documents and beneficiary designations
- Consider tax implications of gifting or funding care
- Build flexibility into your plan with contingency reserves and professional guidance
The Unique Financial Pressures of the Sandwich Generation
Managing responsibilities for both parents and children while also advancing your own career and preparing for retirement can be financially and emotionally draining. High-net-worth families may have more tools at their disposal but also face higher expectations and more complex planning decisions.
Some common challenges include:
- Covering healthcare or assisted living costs for aging parents
- Supporting children or young adults with education and living expenses
- Coordinating legal, tax, and estate issues across three generations
- Balancing generosity with sustainability—especially when wealth is concentrated in illiquid assets like real estate or business ownership
Start with a Comprehensive Cash Flow and Asset Review
Before making decisions, it is essential to get a clear picture of your current and future financial commitments across generations.
Questions to consider:
- What are your parents’ income sources (pensions, Social Security, investments)?
- Do they have long-term care insurance or other resources earmarked for medical or housing costs?
- Will your children need support for education, housing, or launching a career?
- How much of your own wealth is accessible for short- or mid-term use?
A comprehensive cash flow assessment can reveal where pressure points may emerge, and whether it makes sense to shift income, realign investments, or restructure liabilities to meet evolving needs.
Planning for Parental Support: Health Care, Housing, and Longevity
One of the most difficult variables to plan around is how long your parents may need financial or logistical support—and what those needs will cost. Planning early may potentially help avoid reactive, high-cost decisions down the line.
Common expenses to account for:
- In-home caregiving or home health aides
- Assisted living, memory care, or nursing facilities
- Out-of-pocket medical expenses not covered by insurance or Medicare
- Transportation, home modifications, or relocation costs
If your parents have limited resources, you may be in a position to assist, but it’s important to understand the potential long-term impact of doing so. In some cases, families choose to create a separate pool of assets or revocable trust specifically earmarked for parental support.
Supporting Children Without Sacrificing Long-Term Goals
Whether your children are still in school or navigating early adulthood, support often continues well beyond age 18. The key is aligning that support with the rest of your financial picture.
Planning strategies might include:
- Funding 529 plans or educational trusts in advance
- Gifting appreciated assets rather than liquidating cash
- Setting clear boundaries around ongoing financial help for adult children
- Reviewing how support for children might affect retirement timelines or estate plans
These are not just financial decisions; they’re emotional ones too. Having a structured plan in place can reduce stress and create more clarity for everyone involved.
Legal Documents and Family Conversations
When you’re managing financial responsibilities across generations, it’s important to have the right legal documents in place—not just for yourself, but for your parents as well.
Key legal documents to review:
- Power of attorney for finances and healthcare
- Advance healthcare directives or living wills
- Updated wills or trusts that reflect current priorities
- Beneficiary designations on retirement accounts, insurance policies, and investment assets
These conversations can be difficult but framing them around proactive planning (rather than crisis response) often leads to better outcomes and less confusion later.
Tax and Estate Considerations
Multigenerational planning often introduces complex tax and estate questions—especially when gifting assets or covering expenses for others.
Some planning considerations:
- Gifting to family members may have income or estate tax implications depending on the structure
- Paying for a parent’s care might affect your own ability to contribute to retirement plans or meet gifting limits.
- Estate strategies like family limited partnerships or irrevocable trusts may offer a way to manage intergenerational wealth transfer while maintaining control
Build Flexibility into Your Plan
No matter how well-crafted a plan may be, it needs to evolve alongside your family’s needs. That’s where flexibility and collaboration become essential.
Build adaptability into your plan by:
- Maintain contingency reserves for unexpected health costs or other urgent needs
- Revisiting the plan regularly as parents age and children gain independence
- Working with professionals who can help navigate the intersections of tax, legal, and financial considerations
At EP Wealth, we help clients manage the complexities of multigenerational planning by aligning day-to-day needs with long-term goals. Whether you're supporting parents, children, or both, we can help build a financial planning strategy that fits your full picture.
DISCLOSURES
- EP Wealth Advisors, LLC. is registered as an investment advisor with the SEC and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the advisor has attained a particular level of skill or ability.
- Request an appointment with an EP Wealth Advisor when you have a minimum of $500,000 in investable assets – which includes qualified retirement plans (IRA, Roth IRA, 401(k), taxable brokerage, cash (savings / checking) and CDs. Investable assets do not include your home, vehicles, or collectibles.
- Hiring a qualified advisor and/or financial planner does not guarantee investment success, and does not ensure that a client or prospective client will experience a higher level of performance or results. No guaranty or warranty is made that any direct or implied results or projections being represented here will be met or sustained.
- The need for a financial advisor or financial planner and/or the type of services required are specific to the uniqueness of each individual’s circumstances. There is no guarantee or warrantee that the services offered by EP Wealth Advisors, LLC will satisfy your specific financial services requirements. Services offered by other advisors may align more to your specific needs.
- Information presented is general in nature and should not be viewed as a comprehensive analysis of the topics discussed. It is intended to serve as a tool containing general information that should assist you in the development of subsequent discussions. Content does not involve the rendering of personalized investment advice nor is it intended to supplement professional individualized advice.
- EP Wealth Advisors (“EPWA”) makes no representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information presented. All expressions of option are subject to change without notice.
- All investment strategies have the potential for profit or loss. Different types of investments and investment strategies involve varying degrees of risk, and there can be no assurance that any specific investment strategy will be suitable or profitable for a client’s portfolio. The risk of loss can never be eliminated even if working with a professional.
- An estate plan is a helpful tool that can assist individuals in managing and arranging affairs in the event of death or incapacity. However, the scope and extent of the plan varies depending on the unique circumstances and desires of the individual client. It is for this reason, that the analysis encompassed herein is not intended to be comprehensive in nature nor should it be interpreted as legal advice. Please consult a legal professional to determine the extent, scope, and the drafting and creation of the appropriate estate documents. EP Wealth Advisors is not in the business of providing legal advice or preparing legal documents. Our review is limited to and in association with Financial Planning only.
- Laws vary by state. The information presented herein is intended to be general in nature and may not apply to your state of domicile. Please consult local legal counsel to determine the best practices for your state.
- Please consult with a CPA, tax professional, and/or attorney regarding your specific situation before implementing any of the strategies referenced directly or indirectly herein.
