End of Life Discussions with Family
We all die. It’s just a fact of life. Although I don’t think of this fact often, I was reminded of it the other day when the local law enforcement agency I work for faced a tragedy that made the national news. On top of the awful things our suspect did, he also got into an altercation with our units and I had to listen to true fear and anguish as my unit screamed into his radio for help. His tone was chilling to the bone and I will never forget it. Our units were safe and, sadly, that was the only silver lining to what happened.
Being reminded of my mortality made me start thinking about end of life – life insurance, bank account access, and my distribution of assets. Then it dawned on me. . . I’m only 27. What about my mom? If she died tomorrow, would I have enough knowledge about her financial life to be able to maintain her expenses and posthumous care? I know her assets would be handled intestate (that means without a will), but I couldn’t access her bank accounts and I have no documentation to allow me to be her personal administrator in death. It would be a slow process, one which has the potential to devalue her estate due to missed payments or defaults. The kind of changes that would need to happen take time and, Death simply does not wait.
Have the Talk
It’s important to sit your parents down, or whomever whose estate you will need to manage in death, and have the “death talk”. Find out if there is a will first and foremost. If there is, make sure it’s up to date. One of the most common problems heirs face is that the will doesn’t get updated with the seemingly irrelevant details: bank accounts in the will no longer exist, step-children from later marriages get left out, home properties don’t get updated as mom and dad downsize; it all happens too often. All of it needs to be updated and you should be aware of it.
Also understanding life insurance policies. The life insurance needs to cover the funeral expenses and any debts that will need to be closed – that’s at a minimum. Most end of life policies include a little extra to pay for the surviving spouse or leave a windfall to the heirs. It’s personal choice.
Another important issue is the health care directive. Most of us won’t simply just “die” by a sudden and catastrophic heart attack. Likely it will be prolonged, hospice services may be required, or other hospital visits. Unsurprisingly, my mom’s wishes of “don’t let me become a vegetable” isn’t the most comprehensive living will. Vaguely worded health care directives can be contested hotly. “Life saving” is a catch-all word that doesn’t provide a lot of guidance for doctors or family members; does it mean that if you’re having trouble breathing that Oxygen shouldn’t be supplied or does it only mean that if your lungs fail that you don’t want to be resuscitated? This is perhaps one of the most important topics to consider. It sounds morbid, and maybe it is, but it will prevent a lot of heartache between family members arguing about what you or a loved one actually want for the end of life. Be sure to be in the know about living wills and durable power of attorneys.
There are also finances to consider. Just because someone dies, it doesn’t mean recurring debts disappear – mortgages, car insurances, policy premiums, they all still need to be paid; it takes a long time to create wealth, don’t let silly things diminish the work your loved one took. Make sure there is an important file box where things like Social Security cards, birth certificates, passwords and account numbers to various bank or retirement accounts, as well as names and numbers of any and everyone involved in end of life care. Attorneys, financial planners, accountants, your survivors need to know who they are and how to contact them.
Where to Start
The bright side of this dark topic is that it’s easy to do. All it takes is family members and a comfortable place to speak. As far as getting the paperwork started, you just need a lawyer who specializes in estate planning. Go to the attorney with everything you’ve talked about it and think you need, and they should be able to help draft the relevant documents, explain their enforcement and scope, and get them finalized to be official. If your estate is small or only have a few wishes, you might be able to create your own will. The American Bar Association has a few documents and readings to get you started, and many State Bar’s have state specific documents. As always, be sure to read and research how your state handles death when trying to write your own legal documents.
Speaking with a financial planner may also prove useful before talking to the attorney as they can help plan out how to reduce the tax burdens on the estate as well as plan out which creditors will be paid and the vetting process of each creditor making a claim.
Talking about death is hard. Making important financial and legal decisions while burdened with the grief from the death of a loved one is harder. Have these talks semi-frequently such as once every 10 years or anytime something substantial happens. Things like a marriage or divorce, kids or grand kids being born, or entering retirement are all great milestones to talk about the end of life planning because they are events that can substantially alter the wishes of someone when it comes to their estate distribution.
Readers, are you in the habit of talking about these important matters? The facts don’t lie – 90% of people say it’s important to have these discussions, but only 27% actually do it. Don’t be in the majority when it comes to being faced with important decisions that you’re wholly unprepared to make. As always, be sure to discuss your thoughts below. What other tips can you give when it comes to this?