Healthy People Planning for End of Life Now. How and Why.

by Neal Frankle, CFP ®

This may seem like a super morbid topic but if you have a family, I can’t think of any subject more important than planning for end of life. I know first-hand what it’s like when people don’t take this step.

Both my parents passed away by the time I was 17. They had no financial plan, no will, no family trust, no guardians set up. No nothing. As a result, my three siblings and I were tossed to the wind after my parents died.

I realize that everyone has their cross to bear . I also realize that what happened to my parents is extremely rare. But what happened to my siblings and I was a tragedy that could have been easily avoided with just a tiny bit of foresight. Please take the following steps to make sure your family isn’t subject to the same risks no matter what happens to you.

How to Protect Your Family by Planning for End of Life

Since nobody knows if there is a bus with their name on it just around the corner, the best way to protect your loved ones (after making sure you have enough life insurance) is to have your documents in order. Let’s take a brief tour of what documents you need to put in place and why:

Family Trust or Last Will

A family trust or Last Will is typically the bedrock document that directs what happens with your assets if you pass away. Of course you should check with your legal advisor but my suggestion is to consider the family trust rather than a will. There are a variety of reasons for this which I’ve written about before. But if you decide that a trust isn’t for you at the very least get your will in place. It is far better than nothing.

Living Will

This document spells out what medical efforts you want made on your behalf should you be unable to communicate what you want later on. Typically the living will is drafted when you create your family trust but you can certainly do this on a stand-alone basis as well. This document specifies to what extent you want medical professionals to intervene should you be incapacitated if there is no hope you’ll recover.

Health Power of Attorney

Not every eventuality can be foreseen so it’s just common sense to give another person the power to make health decisions for you in case you are incapacitated. This document is in addition to the Living Will and covers those situations that the Living Will may not have. Again, this is usually part of the family trust but it can be done on its own as well.

Power of Attorney

The Power of Attorney document appoints another person to make non-medical decisions for you in case you are incapacitated. It’s similar to the HPOA but deals with your financial life rather than your medical situation. The person you appoint as power of attorney can pay your bills, sign contracts and make investments for you.

Critical Success Factors in Creating Your Continuation Plan

1. Duck, Duck Goose

Don’t be cavalier about who you choose to give the health power of attorney and power of attorney to. You want someone who shares your thoughts when it comes to end of life health matters (HPOA) and your overall financial orientation (POA).

Keep in mind that it’s one thing to have a theoretical conversation with people about these issues. It’s quite another thing when a person has to actually pull the plug or make important financial decisions on behalf of someone else.

The ability to perform these functions isn’t dependent on whether or not you like someone. And it doesn’t depend on the other person’s medical training either. It depends on their mindset, willingness and mental fortitude. Will they be able to make the hard decisions when push comes to shove? Talk to your candidates and have serious conversations about “worst-case” scenarios. Spend extra time now to make sure. If the time comes for them to act, you won’t be able to do anything about it if they fail to perform.

2. Have a “B” Team

You need to have backups lined up and spelled out in your documents. Often many years pass between the time you set these documents up and the time these services are needed. You may outlive your “A” team. Also, they might be sick or unable to travel when the need arises. Don’t take that chance. Have backups warming up on the bench.

3. Check with Your Doctor, Hospital and Financial Custodian

Many times your doctor and/or hospital have their own forms. That means they many not accept your Health Power of Attorney, Living Will or Power of Attorney. The good news is that hospitals, banks and other financial institutions typically have boilerplate forms you can get for free and then keep on file just in case. The benefit of doing this is that you are guaranteed that they will honor the documents since they drafted them in the first place. If you want extra points, check with the hospital, doctor, and financial institutions every 2 years. Laws change and so does the documentation. The last thing you want is to have filed the documents and later discover they won’t do the job because they are outdated.

Keep in mind that there is no downside to taking these steps now. You can set up a will and/or living trust, create a POA, a HPOA and a living will – and make any changes you want whenever you like.

Why You Won’t Take Action

The Investor’s Business Daily recently reported the findings of Lexisnexis.com. The firm surveyed those who didn’t have these important documents in place and asked them why. Here’s what they found:

planning for end of life

You can see that the main reasons people don’t take care of this are “unfortunate”. They are all really non-reasons. If you haven’t put these safeguards into place for your family yet, please don’t let another day go by without taking action.

The cost of doing nothing.

A recent poll for the AP and LifeGoesOn.com discovered that 64% of baby boomers and 70% of all adults have neither HPOA nor a living trust or last will. Without these documents, the courts and lawyers will decide what happens to your money through conservatorship and probate. And the doctors and hospitals will decide what happens to you physically.

If you do nothing and you do become incapacitated your family will be forced to go through the agonizing process of trying to figure what you would have wanted. Then, they will spend a good deal of time (and a lot of money) in the courts trying to get approval.

This could take weeks or months and cost tens of thousands of dollars.

Setting up these documents now however is simple. If you use a lawyer to just do a power of attorney, living will and health power of attorney, you could probably get it done out the door for less than $750. You can also use a document prep service like Legalzoom and pay much less than even that. I always recommend that you speak to qualified attorney if you have the budget for it.

Whatever you have to do, please just do it. Take action. Shoot me an email if you have a question. I’ll do my best to get back to you pronto. But take care of this now.

Have you done any planning for end of life? Was there something that motivated you to get ‘er done? What was it?

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