One of the things I did to help my parents when they were getting older was to guide them to prepare their end of life legal documents.  It is important to take care of these documents to ensure that your wishes are respected and your family is protected. 

Jim with his parents, Bob and Ann, around the time he helped them get their affairs in order.

This is not a sexy topic. But it is necessary, for your own benefit and for the benefit of your family.  Mary and I went through the process a few years ago, and we are setting aside some time in January to review our documents and update the ones that require revisions. 

Let’s start with the documents that directly benefit you. These are the documents that specify how you want to be cared for if you can’t take care of yourself. They include a power of attorney, a health care proxy, and a health care directive (often called a living will).

The power of attorney can be very tricky. If you aren’t very careful in drafting the power of attorney your family could try to invalidate it when you are incapacitated.  If you become disabled, and the family disagrees about the best way to take care of you, legal authorities look to your power of attorney for your directions.  You specify in the power of attorney whom you choose to act for you in all legal matters if you can’t act for yourself.  In essence, you give the person you designate the power to decide for you.  Obviously, you must choose wisely someone you trust to make decisions that are in your best interests.

Even when a power of attorney is correctly drawn, family members can petition the court to invalidate it and replace the person designated–for whatever reason. This is one reason why I recommend that clients work with an attorney who specializes in drafting legal documents like a power of attorney.  The lawyer can help you lock up your designations as well as possible so that no one can set aside your wishes.

Be careful with the health care proxy and the healthcare directive (living will) also.  “Healthcare proxy” means that you designate someone to make decisions regarding your healthcare if you can’t make them for yourself.  “Healthcare directive” is the document in which you specify what kind of care you want in various dire circumstances—and equally important, what care you do not wish to receive.  The healthcare proxy designation and the healthcare directive work symbiotically to direct your care when you unable to do it yourself.

These legal documents require thought and care to be sure they express your wishes clearly.  With them, you are planning now for a future when you may be unable to plan–or to execute a plan.

Here’s an example of the kind of choice you need to make: if you are incapacitated and you cannot eat, would you want doctors to implant a feeding tube in your body? (I’m sorry:  there is no nice way to put this.) Under what circumstances might you want a feeding tube? Under what circumstances might you not want a feeding tube? You answer serious questions like these in your health care directive.

Mary wished her family had addressed this issue with her father before his final illness.  Her family had to wrestle with a question from the hospital about whether to give Leo a feeding tube.  (She will talk about this more in a future post in the caregiving section of our blog.)  After her father’s experience, Mary has made clear in her own health directive that she does not want a feeding tube to extend her life if she is living in a state of advanced dementia. 

These are tough questions.  You might consider talking with your doctor, as well as your lawyer, to answer them.  And if you and your family are able to talk in a supportive manner with each other, and plan together for these kinds of unwelcome but potentially real scenarios, I strongly encourage you to do it.  It can help you all get on the same page.

If your family doesn’t talk well together, take extra care with the lawyer to be sure that your health-care directive very clearly specifies what you want if you become incapacitated and cannot speak for yourself.  A clear directive can save a lot of trouble for you, for your health care designate, and for your family. 

To my mind, these are the three essential legal documents that you must create for your own benefit.  You are taking care of yourself, planning now for a time when you may be unable to take care of yourself.

Next let’s look at estate plan preparations that you do to take care of other people.  The documents you do for other people include your will, the beneficiary designations in your financial accounts, and other directions of all sorts.

First, the will.  You don’t make a will only once and then it’s done forever. You have to update a will periodically. Many financial advisers and legal advisers suggest updating wills every two or three years to maintain their credibility as a relatively current statement of what you want. 

From my perspective as a financial adviser, I think it pays to be an amateur psychologist when you’re creating a will.  One of the best ways to take care of your family is to try to be fair in your designations to the heirs.  Your fairness can help your family to get along for the rest of their lives–even after you die.

Also, review the beneficiary designations in your financial accounts.  Be sure that the life insurance designations and other financial account designations are up-to-date.  Some financial institutions ask you to tell them the beneficiaries’ contact information, which I think is a very good idea.  If you die, the institutions that administer your accounts can contact the beneficiaries to be sure they know where and how to make claims.

Property that passes by beneficiary designation does not fall under the will’s distribution instructions.  They are separate.  Be sure to equilibrate between the two as you strive for fair distributions.

Next—very important!—tell someone where your legal documents and financial accounts are.  Be sure that someone responsible knows where to find your legal documents and account records.  I have had people call me after a parent died to ask how to find out whether mom or dad owned any life insurance.

There is no central database for life insurance policies are written in United States. Make it easy for your beneficiaries to find the policies or at least to find information about the policies so they can contact the insurance companies for claims.

Some people keep important documents with a lawyer.  Some people give them to one or more of their children. Ideally, you will choose someone who is responsible, will pay attention, and will take care of business if you die or become incapacitated.

The will also states your “final arrangements,” meaning your preferences for a funeral, burial or cremation, and how you want them to be handled. 

When I was helping my parents, I got a book for them as a guide.  The book is well structured to help people gather and organize their end of life planning documents and supporting information.  It’s called Get It Together: Organize Your Records So Your Family Won’t Have To.  I suggest getting the current edition, which is the seventh edition.  See the Amazon link at the end of this post. 

The book suggests putting all of the estate plan information in a binder.  Use dividers to segregate the documents by topic.  My Dad was able to do with only small input from me, and he was not in good shape at the time.  He got it done because he was highly motivated to get it done.  Dad made a template binder for himself and he made a separate one for my Mom, then I copied all the info and created additional binders for each of my six siblings.  Dad gave the binders to everyone in our family.

The binders contain everything I’ve been talking about and more.  My Dad included copies of the legal documents and lots of supporting information:  birth and marriage certificates, Social Security numbers, driver license copies, car and house titles, insurance policies, tax records, retirement accounts, other financial accounts, government benefits, real estate records.  And photos.  Dad put photos of him and Mom in the binders.  Very personal.  An act of love.  He made it an act of love for our family to help each other.

Bob and Ann on their wedding day in 1953.

Bob and Ann on their 55th Anniversary cruise.

My parents’ binders have been tremendously helpful to us, his children.

TRUSTS

This section doesn’t apply to everyone, but some clients do create trusts into which they put property for their children and other beneficiaries.  The same guidelines apply:  be sure to work with a good lawyer, someone who is practiced in creating trusts.  Give thought to what you want to happen so that you can tell the lawyer, who can write it clearly in the trust.  Then, tell the appropriate people that the trust exists and where to get information about it if you become incapacitated or die.

As I said before, estate planning isn’t sexy.  Who wants to plan for becoming disabled or incompetent or dying?  But things happen, and thoughtful preparation now can smooth the way later for ourselves and for our families.  So, get it done!

Here is a link to buy the book we used, and the book I gave my parents:

https://www.amazon.com/Get-Together-Organize-Records-Family/dp/1413323154/ref=sr_1_1?s=books&ie=UTF8&qid=1510440609&sr=1-1&keywords=Get+It+Together%3A+Organize+Your+Records+So+Your+Family+Won’t+Have+To

Here is a handy PDF checklist to help you get your documents in order:

https://docs.wixstatic.com/ugd/9869a1_eca04e384d914228aef01a0d038f17ea.pdf