Estate Planning While You’re Alive

We talked in the last post, Kaitie’s Estate Planning Essentials, about the estate planning steps you can take to handle your stuff after you die, but what about before? 

Estate planning is also effective when you use it to spell out your wishes for how you want to live. There could be a period of time before you die where you can’t take care of your financial situation, make decisions, or verbalize how you want to be treated.  For these purposes you should look to power of attorney documents, advanced directives, and living wills. 

Power of Attorney 

This document specifies who you want to take care of your financial affairs or make decisions about your medical treatment if you are incapacitated and cannot act for yourself any longer.  Unlike a personal representative, this person is acting on your behalf while you’re still alive. They are meant to spring into action at the point specified in the document as the “triggering event” and their POA ends either at a time specified in the document or when you die.  You can give as much or as little power as you want in this document but remember this is for when you legitimately cannot take care of your finances or make decisions regarding your medical treatment.   

When do I need one? 

Preferably the moment you turn 18 and are an adult so your family doesn’t have to try to intuit what you want while they’re devastated from your incapacitation. But worst case, as soon as you own any property or get married/have children.   

When should I review or change a Power of Attorney document?  

• At least every 5 years  

• If your relationship changes with one of the people named Power of Attorney or they die 

• If you have some form of new medical diagnosis that may affect it  

• If you buy new property – just to make sure it’s covered 

Advanced Directives  

An advanced directive is a broad term meaning any legal document that addresses your future medical care.  The most official version of this is called just that, an advanced directive.  An advanced directive lays out the details of your healthcare wishes if you become incapacitated. They apply in the cases of injury, illness, or a permanent vegetative state.  Essentially, any time you can no longer make decisions for yourself.  These documents will cover decisions like:

• When to use or not use a feeding tube in sustaining your life  

• Whether or not you wish to be resuscitated if your heart stops beating  

• Whether you want to continue treatment for a terminal illness  

• And how long you would like your life prolonged artificially 

Now you may think, “I’ve talked this over with my family and they know what I would want”.  This is true, but life and death aren’t perfect.  Knowing from conversations that your loved one does not want to keep living in a vegetative state is one thing, but when these situations come up emotions are high, and it can still be hard to make those decisions when your loved one’s life is in your hands. 

Having a document that lays out your wishes can help facilitate that process and ease some of the doubt and guilt that your loved ones may feel in carrying out your wishes.  Also, while the person in charge of those decisions may know what you want, that doesn’t mean your other loved ones will accept it.  Having a document laying out your wishes can manage some of the dissenting voices and make it easier for the person carrying out your wishes to fight for what you would want.   

What is the easiest way to creating an advanced directive? 

Most states have forms you can easily fill out and use for this purpose, but if you don’t want to DIY this you can also work with an attorney.  You should save a copy of the completed forms with your other important documents, and also file a copy with your doctor, health provider, state directory, or a private directory in case a copy cannot be found when needed.   

Living Will 

A living will is a form of advanced directive and can include the information a traditional advanced directive would hold.  However, this information is presented in a living will and not a health care directive form, physicians may not consider the document legally binding. While a living will is a great guide for your family and friends to understand your wishes and help care for you, it is not a good replacement for a power of attorney or advanced directive.  But it can give you the opportunity to provide more detail than an advanced directive would cover, like: 

• Your religious or burial preferences  

• What medical treatments you want or don’t want after becoming incapacitated  

• The type of a facility you would like to be cared for in  

• If you want to donate organs  

• The environment in which you hope to die 

• How you want your pain managed  

• Your stance on experimental medical procedures 

A great resource for creating a living will yourself or for just understanding what pieces you should be thinking about when talking to your attorney is the 5 wishes paper.  This easy-to-use document is written in everyday language to help you tell your family how you would like to be cared for at the end of your life.  It’s $5 and can be found at this website. https://www.fivewishes.org/for-myself/. This document is less of a legal document, and more of a “how to” for your loved ones so, while it’s not a bad idea to keep it with your other important estate documents, it’s even better to share it and have a conversation about it with those who will be caring for you or that you designate as your power of attorney.  

That is true of all of the documents involved in estate planning – the legal document is important, but also creates an opportunity to have important conversations with the people in your life before you’re unable to.  If you feel you need support in navigating the process, your lawyer and financial advisor are here to guide you.

Up next, Trusts!