End of Life Planning

Medicare spends almost 30 percent of its budget on beneficiaries in the last year of their life. In spite of advances in technology, almost one-third of terminally ill patients with insurance used up all their savings in their last year of life. Indeed, although 80 percent of people in the U.S. have said that they would prefer to die at home, only 20 percent do because of the huge costs associated with terminally ill patients. There are all sobering and unpleasant statistics, but ones that point to how imperative it is to begin end of life planning sooner rather than later.

What makes end of life planning so challenging? The number-one reason is most people don’t want to think about such things. They know they should, but they tend to procrastinate on getting started. Then there is the inherent difficulty in predicting just what is going to happen to us as we age. No one wants to think about increased uncertainty as we lose the ability to take care of ourselves. Yet, it is exactly because of this fact that we must think about it and take appropriate action. Our families can come under tremendous pressure at these times. The better we can plan and execute, the better for everyone involved.

Broadly, the foundation of solid end-of-life planning is to develop a well-rounded estate plan. A basic estate plan consists of a will or a trust or maybe both, a durable power of attorney, and a health care power of attorney. These documents need to be drafted by an experienced estate planning attorney and ideally with the collaboration of a trusted financial advisor. Laws vary from state to state, so it is also important to deal with professionals well versed in the laws of the state you in which you live. (See Chapters 28, 29, and 30 of my book and the accompanying videos: “Importance of Developing an Estate Plan,” “Should You Have a Will, a Trust, or Both? What You Need to Know,” and “Top Three Reasons to Use Trusts to Make Estate Gifts to Your Children”)

Part of your end of life plan will be to assign a person to make decisions for you should you be unable to. Choose wisely here. As much as you can, remove your emotions from this decision. Choose someone who will be resolute in performing duties that might be unpleasant. The reason that this person will have to make any decisions is because you cannot. Hopefully, this will be a family member but it doesn’t have to be. For business, financial, tax, property, etc., decisions, the document that will spell out your wishes is called a Durable Power of Attorney. (See Chapter 32 in my book and watch the accompanying video “Why You Need a Durable Power of Attorney—Now” For health care related decisions, you will need a Health Care Power of Attorney. (See Chapter 31 in my book and watch the accompanying video “Who Will Make Critical Health Care Decisions for You When You Can’t Do It Yourself?”) It is crucial you create legal documents stating how the chain of decision making works. Be aware that certain ailments will affect your ability to make decisions. Make sure that you can alter the legal document detailing your chain of decision-making.

You need to choose options for where you will live if certain situations arise. For example, if you have a terminal disease, is it your choice to spend your final days in your home or in hospice? Try and plan broadly about likely outcomes and then make your wishes known. And what about the financial end of things? Do you have the financial resources to pay for those eventualities? All of this should be discussed with a qualified financial advisor long before you have to pay for anything.

Make sure you have decided, and your decision-maker knows, whether you want medical interventions. This is usually detailed in a “Do not resuscitate” order which is another document you should consider having in place, in advance. Surviving family members can become overwhelmed by debt from these type os situations. Rely on your financial and legal counsel for information. Base your plan on comfort, personal choice and honest communication between you, your family and the caregivers.

Creating your plan may not be the most enjoyable process you have ever had, but creating your plan ahead of time can greatly reduce the stress on both you and your family. In my opinion, getting a well-thought-out, well-crafted estate plan in place is one of the most loving things you can do for your family.