The Conversation No One Wants to Have, But Everyone Should
Discussing the end of life—the passing of person and property—is a talk that makes us dreadfully uncomfortable. Yet if our wishes are to be honored after we are gone (or have become incapacitated), the right financial plans and legal paperwork must be in place regardless of our current age or vitality.
“Ideally, if each one of us could see this topic as a way to actually care for our families and reduce the burden for those we love, we would make our own plans,” says Cindy Finch, LGSW therapist at Highland Meadows Counseling Center. “Advanced planning is the most loving thing an individual can do for her family.”
To raise the subject with a spouse or parent, Finch recommends picking a conversational setting and using a tender, loving approach, such as, “I was just reading an article that made me think about the importance of discussing final arrangements,” or “I know it may be difficult to talk about death, but I want your wishes to be honored.”
Call on assistance from a sibling, minister, friend or lawyer if you struggle to broach the topic, but don’t put it off. Failing to plan for death will not prevent it from happening; it only adds complex legal and financial issues to already heart-wrenching emotional ones.
Below are a few of the most important issues to consider.
WHAT IT IS: “It’s a set of instructions that explains the wishes of the principal [person who made the will], enabling heirs to see clearly where assets go,” explains Attorney Bruce Cameron of Cameron Law PLLC.
WHY IT’S IMPORTANT: The verbal wishes of the deceased told to a loved one before death—but not properly documented in the will—will not hold up in court. “If a person dies without a will [i.e., intestate], the court appoints a personal representative to take care of the estate. It may tie up the estate for a prolonged period of time and can be costly. A will doesn’t mean the estate won’t go through probate. There are exceptions. However, the goal is to make the will cover as much as possible,” says Cameron.
HOW TO START THE PROCESS: Make a list of your assets and where you’d like them to go. Be sure to have an executor in mind (i.e., the person who will help administer your will). Include a list of contingent beneficiaries in case your primary beneficiaries predecease you. Constructing a legal will is precise and can be complicated, depending on the nature of your assets, so wills are best drafted by a lawyer well-versed in trusts and estates.
WHAT IT IS: “Probate is a legal process administered by a probate court where [a person’s] will is determined to be admissible,” says Cameron.
WHY IT’S IMPORTANT: It is the legally binding administration of the deceased’s assets and liabilities. The length of the process varies and can sometimes be avoided, depending on complexities of the estate.
HOW TO START THE PROCESS: When your loved one dies, consult his/her will to determine if it designates an executor, and have that person contact an attorney to determine if probate is necessary. If there is no will, no executor is appointed by the will, or the executor is no longer living or able to perform these duties, appoint a representative to meet with the attorney.
A Testamentary Trust
WHAT IT IS: It is a trust created through a will that becomes active after the grantor [person making the will and creating the trust] dies. “It’s like a bucket which allows the individual to place things into a trust that the heirs are able to take out,” says Cameron.
WHY IT’S IMPORTANT: A testamentary trust allows such things as real estate to go to heirs or a life insurance policy to go to minor heirs with conditions on their use. “It can provide significant advantages like avoiding probate and taxes. However, not all assets can be transferred to a trust,” says Cameron.
HOW TO START THE PROCESS: Discuss any special circumstances that might necessitate a trust with your attorney when you are having your will prepared.
Power of Attorney
WHAT IT IS: “The power of attorney gives a designated person the right to make decisions and handle financial and legal concerns on [the grantor’s] behalf. This position—which ceases upon death of the grantor—can be the first step in preparing to set your affairs in order,” says Cameron.
WHY IT’S IMPORTANT: This powerful document grants the designee the ability to write checks, pay bills and enter into contracts (including buying or selling a home) on the grantor’s behalf. It makes handling a loved one’s legal and financial affairs much simpler while they are living. Since it expires upon death, pay-on-death accounts and wills are still necessary to fulfill the grantor’s wishes after death. The power of attorney also comes with fiduciary duties that must be followed and can lead to criminal and/or civil action if abused.
Custody Designation of Minor or Dependent Children
WHY IT’S IMPORTANT: If you still have minor children, be sure your will provides for their legal guardianship or conservatorship, including the funds they will need for their welfare and education. “This is something we don’t want to think about, but what is more valuable than your children?” Cameron adds.
WHAT THEY ARE: A pay-on-death designation transfers assets—such as life insurance proceeds and savings and checking account balances, CDs, IRAs—directly to the designee upon the death of the principal.
WHY THEY’RE IMPORTANT: There is no ambiguity about who receives the funds, and it avoids probate. All funds in these accounts are distributed as soon as necessary paperwork is completed, including a certified death certificate (which can take up to 4–6 weeks in some areas). This can be vitally important for financially strapped family members facing funeral expenses.
HOW TO START THE PROCESS: Contact your life insurance company and financial institutions and be sure all accounts that carry a pay-on-death option have a listed beneficiary and contingent beneficiaries. Make sure they are consistent with your current wishes, especially after a change in marital status or loss of a close loved one. Let a trusted family member know what accounts and insurances you hold and where these legal documents are located.
The average cost of a funeral for burial is $7,000 to $10,000, not including a plot (cremation averages $1,500 to $,3500)—costs paid by the heirs, regardless of the presence of insurance or savings to cover them.
Different funeral homes offer different products and services (at different prices), so as morbid as it may sound, interview several funeral homes about the services they offer and what they cost.
If you or your loved one has specific requests or limited finances, consider pre-planning. During a pre-planning visit, you can determine choices from caskets to songs to the obituary wording. It also provides an opportunity to pay for some or all of the expenses in advance. Some pre-planned funerals require a signed contract, so be sure you understand how pre-planning works at the funeral home you’ve chosen and review any contracts carefully. Last, when visiting, consider taking a close friend or family member with you to help you remember questions if emotions interrupt your thoughts. Visiting a funeral home can be an emotional experience, even if you are only pre-planning.
Final Arrangements Checklist
- Do you have a will? Are the beneficiaries current?
- Do you have a power of attorney for aging parents or a loved one with a serious chronic disease such as terminal cancer or Alzheimer’s before they become incapacitated?
- Do your financial accounts have pay-on-death options? If so, have you designated beneficiaries and contingent beneficiaries? Are they current (i.e., no ex-spouse still listed)?
- Are your financial and legal documents in a secure location? Does a trusted family member know where to find them if they are needed?