A Talk That Only Gets Tougher – Part 2 of 2

Last week the topic of the talk that only gets tougher – Part 1 provided resources to get you thinking about how to start a difficult conversion. So now you are ready to have that talk with your family about your wishes. You know you need to have it all documented. But which documents do you need for what? Below is a basic list. Most attorneys will prepare these 4 for a fixed fee, but they will need to have a conversation with you first. Here’s what you need, and a few reasons why:

A Will

1) A will. This tells the world (the courts, most importantly) where you want your stuff to go and who will take care of any minor kids. Do you need a will if you have a trust? Yes, you still do. Is your will from Ohio or New Jersey valid in Florida? Maybe, maybe not. How powerful is a will? Sometimes people forget the obvious – a will is only for when you are dead. If you are not dead, but in some other kind of compromised state, a will alone does you no good. That’s why you need the rest of these…

A Living Will

2) A living will. This is for when you are not dead, technically. You are in that awful-to-consider state of being kept alive artificially. It gives permission to pull the plug; or absolutely says not to. It makes your wishes clear so family doesn’t have to debate about it. Or, if they do choose to debate about it in court, the judge knows what you wanted. Look up the case of Terry Schaivo for a heart-wrenching example of what can happen without a living will.

A Health Care Surrogate

3) A health care proxy or surrogate designation. This is for when you may be very much alive, but not able to make medical decisions for yourself. It tells medical professionals and institutions who they can take direction from. If you do not document this, and your family can’t agree on whether to amputate, or have the risky brain surgery, or start the experimental drug — ugliness.

A Power of Attorney

4) A durable power of attorney (DPOA). This says who can conduct your financial affairs. Many married couples think because their spouse is a beneficiary on the 401K then the administrator will let the spouse take money out, or make an investment change, or stop contributions. You need a DPOA for financial firms and professionals to take those instructions. Beneficiary designations are like wills – they have no standing if you are still alive.

Other Helpful Documents

Some attorneys also prepare extra documents like HIPAA Designations or Pre-Need Guardianships. The need for these varies from state to state.

Additionally, some people who are chronically or terminally ill fill out a more detailed document called Five Wishes. Five Wishes does have legal standing, so have an attorney review it with your other documents, to make sure there are no conflicts.

While you’re at the attorney’s office getting these done, do you have any adult kids who are single? They need at least 1), 2), 3), and 4), too. Whether an emergency room will consult and share info with the parents varies from hospital to hospital. By law (HIPAA), without permission, they aren’t supposed to.

Is your head swimming? Take it one step at a time. Make the appointment with the lawyer, and let them guide you from there. Don’t know who to call? Start with the directory for your local Estate Planning Council. Or ask your friendly neighborhood financial planning professional for recommendations.

For more tips on the psychology of money, subscribe to the award-winning monthly e-letter, “The View From the Porch.”

Holly Donaldson

Holly Donaldson, CFP® runs an hourly and fee-for-service financial planning practice virtually from her Tampa Bay, Florida office. She also works with clients throughout the U.S. (except Texas) interested in retirement and tax planning advice without product sales or investment management. Holly is the author of The Mindful Money Mentality: How to Find Balance in Your Financial Future (Porchview Publishing, 2013) and publisher of the award-winning monthly e-letter, "The View From the Porch."

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