Tiffany Taylor is a Financial Empowerment Coach with ESOP, a subsidiary of Benjamin Rose Institute on Aging. Julie Hayes is the Editorial Assistant at Benjamin Rose Institute on Aging.
Along with growing older come worries about ensuring the financial stability of your family after you pass on, and what will happen if you lose the ability to make decisions on your own. If you have a loved one who is confronting these issues, offering guidance with estate planning can be an enormous help. When your loved one knows that his or her decisions on health care and finances are going to be taken into account, a great deal of stress may be lifted. Estate planning can give your older family member or friend the peace of knowing that their loved ones will be cared for. It allows them to:
· Maintain control over their property while they still have the opportunity
· Make their wishes clear on the sort of care they want to receive, and choose someone to make further health care and financial decisions in the event that they become unable
· Provide for their loved ones after their passing
· Ease the burden of decision-making on their caregivers
You may want to encourage your loved one to prepare the following advance directives while he or she still has the ability to do so:
1. Living Will
If your loved one can no longer express his or her wishes, a living will can fulfill that function. It is a document restricted to end-of-life care issues, such as whether or not someone wants to receive CPR or treatments like dialysis, or have mechanical ventilation to sustain life. Prior to drawing up this document, your loved one should discuss these choices with his or her doctor to ensure a full understanding of the medical options. A living will does not go into effect until a person’s primary physician states that the person is no longer able to make health care decisions on his or her own.
2. Durable Power of Attorney for Health Care
This document enables your loved one to appoint an individual who would make medical decisions for them if their physician determines they cannot do so themselves. The power conveyed by a Durable Power of Attorney for Health covers all health care decisions involving your loved one, not including what has been outlined in the living will, so he or she should make sure the person who is chosen is comfortable with making these decisions.
The person your loved one picks to receive this power of attorney will be allowed to:
· Enforce his or her health care wishes in court
· Hire and fire doctors and medical workers who are handling treatments
· Access his or her medical records
· Have visitation rights
3. Durable Power of Attorney for Finances
Likewise, a Durable Power of Attorney for Finances gives your loved one the power to select someone who would make financial decisions if their physician determines they are no longer able to do so on their own. This individual, acting on your loved one’s behalf, would be able to:
· Handle bill payments
· Pay for medical expenses
· Make investments
· Collect retirement benefits
· Apply for Medicare and Medicaid, as well as other insurance benefits
4. Living Trust
A living trust gives your loved one the opportunity to give detailed instructions on the handling of his or her estate, and to appoint a trustee who would hold the title to any property, as well as transfer assets to beneficiaries in the event of his or her death. This can be done without the intervention of probate court, the legal process of dividing assets after death. Among the benefits of having a living trust are:
· Avoidance of the expense and delay of going through probate court
· Expedited distribution of assets to beneficiaries
· More privacy, because unlike other wills, a living trust is not made public upon a person’s death
· Reduction or elimination of estate taxes
5. Do Not Resuscitate Form (DNR)
A DNR order instructs your loved one’s health care professionals not to perform CPR through chest compressions, a defibrillator, artificial breathing tubes or special drugs in the event that their heart stops or they stop breathing. It is a good idea to talk to your loved one about whether or not he or she wants to be resuscitated if an emergency should occur. You should also make sure to let other close family members and friends know of these decisions so that medical staff can be properly notified of the person’s wishes when responding to a health emergency.
6. Last Will and Testament
A Last Will and Testament gives detailed instructions on how your loved one’s assets and property are to be distributed upon death. It also covers such areas as:
· Care and guardianship of minors
· Division of bank accounts, heirlooms and any additional assets
· Formation of trusts to manage the estate
· Funeral and burial wishes
Remember that after your loved one has passed, unlike with a living trust, the Last Will and Testament is filed through probate court as a public record, and a judge will be involved in distributing assets and property to beneficiaries.
Encourage your loved one to go over advance directives every three to five years, and to consider making changes to these documents if they get divorced, married or have a child.
Resources are available to give you guidelines on creating and notarizing these advance directives. The National Academy of Elder Law Attorneys can assist you in locating a lawyer to meet your loved one’s needs, and the U.S. Administration on Aging’s Eldercare Locator can also identify legal services for older adults in your area. Some employee assistance programs (EAP) also provide documentation for advance directives and referrals to legal services. If you are working for a company with an EAP provider, check with your provider to find out whether you have access to these benefits.
