Death and taxes are famously touted as life's only two certainties. But while most people spend considerable time and effort documenting and juggling tax matters, few focus on the end-of-life planning that could give them and their survivors peace of mind and help save time and money.
Here are some simple steps to consider in securing end-of-life plans, along with some ways to research them further -- all free of charge.
1. Plan for Possible Disability
A common, often unspoken, fear for many is that their money will be frittered away by those around them if they become unable to handle their finances due to an illness or mental disability. A power of attorney for finances allows you to name a trusted person, called an agent or attorney in fact, to handle your financial matters if you become unable to do so on your own. See some typical wording for such documents by going directly to the source: your state's law. To find it, do an Internet search of your state, "probate code," and "power of attorney for finances."
A related fear is that in the case of incapacity, you might be denied or subjected to medical care you would find unsuitable. Advance care directives allow you to instruct health care providers about what life-prolonging treatments you want and don't want if you become unable to express those wishes yourself -- and to name an individual to be sure those wishes are enforced. Ask your doctor or the patient representative at a nearby hospital or clinic to see the form used in your locale.
2. Consider an Estate Plan for Your Property
The term "estate planning" sounds a bit intimidating -- or like a concern for only the richest of the rich. In reality, it involves the commonsense matter of finalizing one or more documents giving legal force to your wishes about where you want your money and property to go after you die.
A will is still the most common way to accomplish this, but in our death-denying society, well over 70 percent of people die without one. In a will, you can specify:
- Property you wish to leave to family, friends, and organizations.
- A person to act as guardian and manage property for dependent children.
- A personal representative or executor to manage your property at death, pay debts and taxes, and distribute what remains as you specify.
- Whether you want to cancel any debts owed to you at death.
- How outstanding debts and taxes should be paid.
Most wills must be filed with a local court, where their contents are available to the public. And many people hire lawyers or financial experts to help them through the probate procedure, which can amount to hefty fees.
But a will is not the only way. Other legal arrangements can pass ownership of property to others at death, avoiding probate. They commonly include:
- A living trust, which operates much the same as a will but requires a bit more paperwork and management.
- Joint ownership, such as joint tenancy or tenancy by the entirety, which means it will pass automatically to the named survivor when the owner dies.
- Transfer or pay-on-death designations, in which bank, savings and loan, brokerage arrangement, or credit union accounts automatically pass to a named beneficiary at death.
Plenty of good, free information is available on these options at seminars, often offered through senior centers, chambers of commerce, and other local consumer groups. Beware, though, of presenters who seem to be using such seminars merely as "feeders" for their own businesses.
3. Record Your Wishes for Final Arrangements
Final arrangements commonly associated with death -- including funeral or memorial services, burial or interment, and more -- are, ironically, among life's most expensive purchases.
For this reason, many people join funeral or memorial societies, nonprofit consumer groups that help them find local mortuaries committed to dealing honestly and charging reasonable prices. Generally, members specify the goods and services they want and are assured of specified prices for them. Usually, no payment is made until after the services are provided, which helps avoid the problems some consumers have encountered by prepaying for such arrangements.
Find a local society through the Funeral Consumers Alliance.
About the Author
Barbara Kate Repa, a Caring.com senior editor, is an attorney, a journalist specializing in aging issues, and the author of WillMaker, software enabling consumers to write their own wills, healthcare directives, powers of attorney, and final arrangements. If you're worried about the cost of senior care, you might also like 8 Smart Ways to Pay for Assisted Living.
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