Death can be an existential nightmare. Few people are at peace with the idea of dying too soon. But as we get older, our biggest worry shifts from dying, to dying without a plan – leaving our loved ones unprepared, or causing them great grief with our passing. End of life planning is an essential process that helps individuals prepare for the inevitable. It involves making arrangements for your medical care, finances, and personal affairs in the event of your death or incapacitation. By engaging in end of life planning, you can ensure that your wishes are followed, your loved ones are provided for, and your legacy is preserved.
Being prepared in the event of your passing may not affect your mortality, but it can give you a different peace of mind: the knowledge that you’ve left everything in good order for your friends, family, and everyone you love and respect.
End of life planning is not exclusive to the rich and powerful. You do not need to leave behind a large and complicated estate to justify having a will, or even considering financial instruments such as trusts and life insurance policies. Furthermore, there is more to end of life planning than the money.
A comprehensive estate plan will help preserve your dignity, ensure that your wishes are honored and respected, and put your end-of-life care in the hands of those who you trust and confide in the most.
What Does an Estate Plan Look Like?
No two estate plans are necessarily the same, but most estate plans are composed of the same basic elements:
- a will
- advance directives
- executors, trustees, and/or agents
Are Your Finances Secured?
Wills, or a last will and testament, help guide the probate process. While certain details of US probate law differ from state to state, probate serves the same basic function in the event of a person’s death – to organize and facilitate the estate’s final obligations and distribute the remainder among the valid heirs. A will constitutes a set of legally valid instructions left behind by the testator to inform the court and the executor on how their estate should be handled.
Only one will can be validated – the last will. If two wills exist, then the latest is the most valid. If the latest will was not adequately signed or notarized, it may still be used to contest the older will under certain circumstances. One of the purposes of the probate process is to individually handle such discrepancies, allow loved ones and acquaintances to come forward with the evidence to contest a will or decision, and validate the correct document.
Wills are limited. They cannot distribute items not contained in the estate – for example, if a savings account has a beneficiary, then it will most likely be emptied into the beneficiary’s account before probate can begin. Similarly, if a property is transferred into a trust before the testator’s death, it can no longer be distributed through a will.
Furthermore, if an asset or account was used to pay an outstanding debt – such as unpaid taxes, employee salaries, or unpaid bills – it cannot be distributed to its beneficiaries. It becomes the executor’s job to equitably distribute the remainder of the estate based on the testator’s wishes.
Wills can be supplemented through different estate planning documents. Trusts can be used to transfer control of important property to a trustee, with set instructions for after your death. Trusts are more versatile, as they require continuous management of an asset, and can hold onto it even after your death. But that makes them more expensive and complicated than the average will.
Wills, trusts, and other forms of financial end-of-life planning are important for preserving an individual’s financial legacy and ensuring that their wealth is distributed in the way they would have wanted. Dying intestate, or without a testament, leaves the distribution of your assets up to state law. Under most forms of intestate succession, the estate’s value would be proportionally divided and distributed only among the next of kin, usually the surviving spouse and children. Little to no consideration is given to what the decedent would have wanted, without some form of legally valid estate planning.
Are You Medically Prepared?
Advance directives usually constitute a living will and additional medical instructions, such as a DNR (Do Not Resuscitate order), organ donor card, or HIPAA release form.
A living will is not to be confused with a last will and testament. Living wills are used to detail your explicit wishes in the context of certain medical procedures or eventualities. They are especially important for people with chronic health issues, or those in hospice care.
The point of a living will is to ensure that you define what you do and do not want, while you are mentally competent, in the event of your incapacity. When doctors cannot ask for consent, they can turn to a living will.
A DNR order makes it clear that you do not wish to be resuscitated in the event that your heart stops beating, or you are unable to breathe on your own. It does not mean that doctors are not allowed to make any efforts to prevent or slow your death – it refers specifically to cardiopulmonary resuscitation, such as the use of a defibrillator or CPR. A team or doctor may still resuscitate you in the event of an emergency if they are not aware of your DNR.
HIPAA release forms allow doctors to share confidential medical information with people you identify on the form, in the event that they must make important medical decisions for you. You essentially waive your right to patient privacy under very select circumstances.
Furthermore, a medical power of attorney ensures that someone you trust can make medical decisions for you if you are incapacitated.
An organ donor card ensures that any viable organs and tissues may be used for medical procedures to save other people’s lives. You must register to become an organ donor – your body will not be used without your express permission.
Have You Anticipated End of Life Planning Costs?
Dying can be expensive. In addition to the associated costs of probate, there are medical costs, funerary expenses, and a slew of other bills to pay. Part of end-of-life planning includes setting aside funds to cover these costs.
In some cases, it may be a good idea to take out a life insurance policy, if you qualify for one, to ensure that your family has a pool of funds to draw from for the final expenses of your life.
Wills, trusts, directives, and powers of attorney. Do you need all these tools? Or any of them? That depends on your finances, circumstances, priorities, and goals. If you wish to learn more about how an estate plan can save you and your family both time and money, contact us at the Werner Law Firm.