Life is full of changes, good and bad, and often people don’t realize the implications these changes may have on them or their loved ones when facing a medical emergency or death, life events that should trigger discussions and document drafting or review.
End of life documents allow people to express their wishes for how their health care and property will be handled in the event of a medical emergency or death. We asked experts what life events should trigger discussions and may impact end of life documents.
Many teenagers happily celebrate becoming a legal adult, and parents celebrate getting their kids to that milestone. However, neither kids nor parents give much thought to what that change in status means should that newly minted adult have a medical emergency. HIPAA laws and other privacy protections mean that parents are limited in what they can do for their young adult should they need medical treatment.
Young adults should complete a Power of Attorney for Health Care stating who they want to be in charge of their medical care should they become too ill or injured to make health care decisions for themselves.
“It’s especially good for college students to have,” says Randi Belisomo, co-founder of Life Matters Media, a resource for all stakeholders in end of life planning and decision making. She is also a reporter at WGN-TV and doctoral candidate in bioethics and healthcare policy at Loyola University. After the death of her husband and fellow journalist, Carlos Hernandez Gomez, at age 36, Belisomo founded Life Matters Media to help people discuss and address end of life decisions.
“It is a form, and it’s not hard to complete. When done properly it’s clear what your wishes are and who the agent is,” says Belisomo. She adds that young adults should include what they want done should they sustain a traumatic brain injury.
“When it comes to picking an agent, the number one thing other than understanding your goals and values is that they need to be accessible,” says Belisomo, noting that many people under age 40 don’t answer phone calls from unknown numbers. “The ER is not going to text a health care agent. Make sure they are easy to get a hold of.”
The Commission on Law and Aging of the American Bar Association offers a guide called “Giving Someone a Power of Attorney For Your Health Care,” which includes a multi-state form.
“Everybody, regardless of their age, needs to have current powers of attorney, both power of attorney for health care as well as power of attorney for property, which includes finances,” says Kristi Vestri, an attorney who has served on the board of directors of the National Academy of Elder Law Attorneys.
Setting Up Financial Accounts
Young adults starting their careers set up a variety of financial accounts, including bank accounts, retirement accounts, and life insurance accounts, as well as investments. Doing so can be overwhelming. Often what falls through the cracks is designating a beneficiary for those accounts in the event of the death of the owner.
“It’s not uncommon for accounts to not have beneficiaries, but not having one is a mistake,” says C.J. Jensen, CFP, CPA, managing director of Jensen and Associates, a private wealth advisory practice of Ameriprise Financial in Chicago.
When it comes to naming a beneficiary, it’s a myth that it must be only one person. Account holders may designate more than one person and allocate certain percentages to each. Also, your beneficiaries do not need to be people. Charitable organizations may be named as beneficiaries, either alone or in combination with individuals.
On brokerage accounts, pay attention to the transfer on death provision. “If you don’t name that, the account becomes part of your estate and has to flow through probate like your other assets. If you name a transfer on death for brokerage accounts that are not retirement accounts, that supersedes your will,” Jensen explains.
“You should have a communication with whomever your beneficiary is, so they are aware. If you do designate a charity, you want to notify it as well. The charity may have a planned giving department or a form you need to fill out, and someone there needs to know to reach out in the event that it’s necessary,” Jensen advises.
He recommends reviewing beneficiaries on an annual basis, and notes, “It really doesn’t take much time to review it and a periodic review makes sure your wishes are still reflected.”
He also stresses the importance of including a financial adviser to weigh in on end of life decisions regarding financial accounts, noting the different ramifications that come with leaving money to individuals, trusts and charities. “You need to think of tax implications and tax burden that you are putting on the person inheriting the money,” he says.
Eight-six percent of those who have a will indicate they have digital assets, but less than 13 percent of those have indicated what should happen with their social media accounts, computer files, and other items that fall under the category of digital assets, according to a survey by Rocket Lawyer. You can and should state how you want those digital assets managed as part of your will, and you should also appoint a digital executor.
In the midst of planning a wedding and forging a new life together, dealing with end of life documents can seem like a buzzkill. That doesn’t, however, mean that you don’t need to do them. In addition to adding beneficiaries, this is a good time to address advance directives, which can include any combination of living will, power of attorney, and the Five Wishes collection by Aging with Dignity. The Five Wishes collection meets the legal requirements in 42 states.
While many people make their spouse their agent on the powers of attorney, it’s not a requirement. “You want someone who can carry out decisions well in a time of stress,” says Belisomo, noting that some people don’t want to pick their spouse because they don’t wish to give them that burden during an exceptionally difficult time.
Naming a guardian who will be responsible for your child(ren) should you die or become unable to care for them can be done in a will, but first, make sure the individual named as guardian is willing and able to serve in that capacity. It’s important to make sure that it is properly executed and that those named as guardian have a copy and know how to access the original document.
Should there be a child with special needs, that should be taken into consideration when handling estate planning. “Special needs planning is really important, and there are special rules that go along with that,” stresses Vestri.
Vestri adds that parents of children with special needs should consider establishing a third party special needs trust for their child and that their child’s inheritance from them and other family members should go to the trustee of that trust.
The End of a Marriage
The end of a marriage, either as a result of death or divorce, involves grief and paperwork. People sometimes forget that they also need to change their own existing paperwork.
Forgetting to change a named beneficiary from someone who is now a former spouse is a common mistake, according to Jensen.
“Always, always review your advance directives if there are any changes in your life, and especially if a spouse dies or you get a divorce,” says Belissomo. All other documents also need to be updated.
Diagnosis of a Spouse
A spouse being diagnosed with Alzheimer’s or dementia is another reason to revisit various documents and make sure that the individual will be cared for.
The healthy spouse will want to provide for their partner in the event that the healthy spouse dies first. Vestri says that a revocable trust converted into supplemental trust allows the trustee to provide for what public assistance doesn’t, noting that public aid pays for only basic necessities.
In addition to making sure an ill spouse is provided for, it is also a time to revise documents that name them as a decision maker, agent or executor if they are no longer capable of serving in those roles.
Diagnosis of Yourself
Belisomo advises those who are seriously ill, elderly and frail to complete the POLST (Physician Orders for Life-Sustaining Treatment) Paradigm Form. It is a medical order, not advanced directive, and is based on conversations between patients and health care professionals about goals of care, quality of life, diagnosis, prognosis and treatment options.
You are mostly likely to receive end of life care that aligns with your preferences if you are in the POLST program,” says Belisomo.
If the Five Wishes Form, which was inspired by Mother Theresa and her home for the dying in India, has not been completed, it is worth doing after a diagnosis. Belisomo recommends it, explaining, “It’s a wonderful way to discuss things that matter to you beyond health care preferences at end of life. It’s the most human advanced directive because it gets into details of how we want to be cared for and how we want to be loved.”