End of Life Planning for Peace of Mind

By Joe Price from the MO Planning Business & Estate Planning Blog

Planning for the end of your life isn’t a pleasant experience, but by addressing important end-of-life issues ahead of time, you’ll save yourself and your family from unneeded stress later on. Some of the things to consider include how you’ll care for your health if you fall ill, and how your finances will be managed in case of your demise or incapacity.

You can take comfort in the fact that more Americans are discussing end-of-life planning, according to a study by the University of Missouri that will be published in the American Journal of Hospice and Palliative Medicine. This means that more people are realizing the benefits of planning what will happen to them and their family as they age and their health declines.

The American Bar Association’s “Consumer’s Toolkit for Healthcare Advance Planning” lists several circumstances for you to consider that may occur as a result of age-related illness. It also asks several questions to help you prepare for the health issues you may face as you age, and it provides resources to help you decide how to handle them as you near the end of your life. Click here to view the Toolkit.

Planning for end-of-life with grace and dignity

Everyone should have a written estate plan, and this is especially true when you’re considering your end-of-life needs. When you plan far ahead of time, you’ll be able to address your issues in general and position yourself and your family to handle specific problems as they arise.

In addition to health concerns, there are also considerations for your property and estate that you need to think about as you near the end of your life. Here are some of the things you can do to ensure that your wishes are carried out leading up to and after your passing:

A Last Will and Testament – This is the most basic way to ensure that your assets are divided the way you want when you pass on. Without a will, your property will be considered “intestate” and will be divvied up by the probate court according to your state’s inheritance laws. A will is something that you should have regardless of your age or health.

Living Trust – Also known as a “revocable trust” or a “revocable living trust,” this document, when used in combination with a Will provides the following advantages over a “stand-alone” Will:

• Avoidance of Probate – Avoidance of probate for all assets titled in the Trust prior to the Settlor’s (the “Settlor” is the person signing the Trust and transferring assets to it) death. Avoiding probate is beneficial in three ways: First, it saves on attorney’s fees and court costs. Since attorney’s fees in probate are usually pegged to the size of the estate, the savings can be substantial for larger estates.Second, it provides privacy for estate matters. Probate files are a matter of public record. Avoiding probate keeps creditors, reporters and “Probate Trolls” from reviewing Wills and court pleadings for their own personal gain. Third, it avoids delays in accessing funds. Nothing can put more stress on a family than having funeral homes, business associates and other creditors hound the family members for payment when the decedent’s funds are tied up pending court orders.

• Avoidance of the need for a Custodianship – Further, a Living Trust provides an important benefit in the event of the Settlor’s disability or incapacity for those assets titled in the Trust prior to the disability or incapacity: That is, those assets do not need to be subject to a court-supervised custodianship which results in attorney’s fees, court costs, lack of privacy and in some instances, delays in accessing funds at the worst possible time. 

Verifying Beneficiaries for Your Accounts – You should double check that you’ve named the appropriate beneficiary of any life insurance policies, annuities, college savings accounts, 401(k)s, IRAs, brokerage accounts or  certificates of deposit you have to make sure those funds are transferred to the appropriate person when you pass. If you share a bank account with someone, you should check with your bank to make sure that they have a right of “survivorship” so that those funds transfer directly to them when you pass. 

Insurance to Cover End-of-Life Costs – You’ll want to review your life insurance policies to make sure that they provide enough funds for your spouse and dependents to live on for a significant amount of time after you die or are incapacitated. One very important benefit of life insurance is that it avoids probate as long as the beneficiary of the insurance policy is someone other than the decedent’s estate. As mentioned above, avoiding probate saves on attorney’s fees and court costs, avoids publicity and delays in accessing funds. You may also consider long-term disability insurance to replace lost income if you can’t work as the result of a disability, as well as long-term care insurance that will pay for healthcare if you develop a serious medical condition.

No doubt there are many things you’d rather do than to plan for the end of your life. However, by seriously considering the implications on your health and estate as you grow older, you’ll be in a better position to make smart choices in how your estate is managed up to your passing and afterwards.

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