Financial Perspectives: End of life planning

We are reminded all too often that we are all mortal. Within my immediate family and circle of friends it feels like it has come up a lot recently. As much as I do not even want to think about the planning aspect of these experiences they come up and need to be addressed. Unfortunately when you wait until the diagnosis to begin the planning process you may be limited as to the impact you can have with planning.

Some of the most common things that arise involve who has the right or ability to make decisions for the sick person (health care or financial), what are the plans for care in the home (or in a nursing facility) and are the appropriate legal documents in place to manage the distribution of the person’s assets.

The ability to delegate health care and financial decisions is critically important for any sick person, but especially someone who is single or widowed. The best way to do this is to have a durable power of attorney for health care and financial affairs. The same person could be designated for both health care and financial affairs, but in some families they may choose to split these duties. Some may choose to create these documents on their own, but I highly suggest that you consult an attorney.

Providing care in the home, or in a nursing facility, can be expensive proposition unless the family consists of medical professionals. Some conditions can make it difficult to deliver care in the home. Long before the onset of an illness we should all give consideration to the types of conditions our parents and grandparents developed and begin to plan accordingly. For instance, if Alzheimer’s is prevalent in your family you should give some consideration to planning for the possibility that it could arise with you. You should consider designating some part of your savings or purchasing some type of insurance as part of your plan. Thinking about these issues at a detailed level may seem pre-mature and a bit scary, but you will benefit your family, or friends, immensely.

Many people choose not to have a will drawn up because they think it is too morbid. Another major planning opportunity is around beneficiary designations. Many folks designate their estate instead of a specific beneficiary. This can add some additional costs to the estate settlement process. In other cases people made beneficiary elections 20 or more years ago and have not looked at them since. Their intention may be to pass the money to their children, but they could have an ex spouse listed as their beneficiary. There is no recourse if this person were to die the ex spouse would get the money.

The last document that should be part of the planning package is a living will. This document spells out the extent and type of life preserving measures the sick person would like to have administered.

The views expressed are not necessarily those of Cambridge and should not be construed as an offer to buy or sell any security.

Jim Heisler, CFP®, CDFA™, CASL™ Family Wealth Services, LLC 8725 Frankford Avenue Philadelphia, PA 19136 jim@familywealthservices.net 215-332-4968

Jim Heisler is a Certified Financial Planner with Family Wealth Services in Holmesburg. You can read all his Financial Perspective columns here.