The Importance of End Of Life Financial Planning

The Importance of End-of- Life Financial Planning

By

Marsha Walker Eastwood, Bs. Ed, MSHSV

Procrastination, indecision, and selfishness are just a few of the reasons people do not engage in end-of-life financial planning. After all, is it not just easier to live life and not worry about what happens after a person is gone? Let someone else take care of all those messy and oftentimes complicated not-so-little estate details. Dying intestate, or without a will can wreak havoc in many ways.

A case in point is the story of Jerry and how much you can learn about a person after death. Although Jerry and I were a part of the same family, we never met. We had two or three telephone conversations that were the extent of our relationship. I learned from one of his brothers that he was academically accomplished having graduated from law school and later became an accountant, but never really worked in either field. Instead, he preferred to be a not so well- paid team member for a large and well-known healthcare system. Jerry was found dead in his home approximately three days after his untimely death. This is when the journey of who Jerry really was began.

I clearly remember when I received the news of Jerry’s death and the immediate call to action. His apartment had to be cleaned, important papers detailing final wishes, life insurance, pensions, and the name(s) of beneficiaries needed to be found as well as the disposition of his car. Neither I nor his brother were prepared for what we found.

Upon entering the residence, the pungent and most unwelcome smell of grease and cooked food permeated the air, as dust particles danced in in the sunlight. Everything in the kitchen was in disarray. The path to the living room/office was littered with enough “stuff” to fill two apartments the size of that one. Why is this noteworthy? Some of that “stuff” included bank statements, bills and a LOT of unopened mail and other information that drew a financial picture and a social picture of who Jerry really was.

We were aware that Jerry had a roommate, and this was obvious by the amount of clothing hanging everywhere. We assumed that she was away and had not been informed of Jerry’s passing. We later learned that our assumptions were totally inaccurate. While searching through the ton of “stuff” we learned that the roommate had died several months before, and Jerry refused to remove any evidence of presence. Everything was just as she left it, the littered bedroom, cluttered bathroom, and traces of her hidden throughout the house in the myriads of boxes, shelves, filing cabinets and drawers. We quickly pieced together who she was as well.

We discovered their passions and their struggles, their responsible and irresponsible financial habits. Hundreds and hundreds of dollars spent on cookware, some of which was hidden in dresser drawers along with papers and pictures.  We discovered anti-social behavior, and mental and physical health issues. Dusty books, dusty bills, dusty clothing, and vintage family heirlooms surrounded Jerry’s favorite chair where first responders discovered his remains. No one thing in any room appeared to be any more or any less valuable than another. The search for the end-of-life documents took an entire month of endless searching and review of every envelope found in desk drawers, on the worktable between the computer modem and the monitor, and a variety of boxes. What we discovered were two cats, several copies of the roommate’s death certificate, and her personal communications. What we also discovered was a puzzle with no border. Our search for a will or any other end directives from either occupant came up empty. Now the real time-consuming work began.

Like so many other people it appears Jerry considered the creation of a will or any sort of estate planning to be for the wealthy or people who had “something of value” to bequest to others. Jerry died intestate which means he died without a will. It also means that his brother was left with the arduous task of finding and managing the bits and pieces of Jerry’s estate. Dying without a Will will result in creating a probate account in a state court who will decide who gets your assets. In this case that task fell to Jerry’s brother who had to create a probate account and become the executor of Jerry’s estate. Legal notices will have to be published so that any monetary claims against the estate can be settled. In some situations, this can wreak havoc among family members or a partner who may feel entitled to some part of the estate.

As a starting point Jerry’s brother had to create a task list prioritizing things to do. At the top of the list was to start a ledger of expenses associated with the disposition of Jerry’s remains by selecting a funeral director and paying for the cremation and several copies of the death certificate. Next, depending on the circumstances, an inventory of personal property should be made. In Jerry’s case there was nothing to inventory because aside from family heirloom items which belonged to the entire family, and clothing with no material value, it was almost impossible to determine what belonged to him or his deceased roommate. His car will become part of the estate and his brother will have to obtain a release for a new title from the probate court.   Then all expenses related to cleaning out Jerry’s apartment including dumpster fees, moving fees and helper fees, as well as any rent due will have to be paid out of pocket by his brother, and reimbursement from the estate only comes after what may range into several months of court delays.

To determine the financial worth of Jerry’s estate several people and/or organizations had to be contacted, beginning with his employer. The employer provided basic information regarding the deceased’s pension distribution and beneficiary information on a limited basis. In order to make a determination as to the release of funds, the employer will require a probate account number that includes the appointed executor, in this case Jerry’s brother. Next, contact was made with any bank for which a statement was available. Calls to the bank(s) to query about the existence of an active account(s) had to be made and once again a probate account number is required. Due to the sheer volume of documents, both relevant and non-relevant, it was difficult to locate financial information such as investment or brokerage accounts. Each of the financial entities contacted will require a certified copy of the death and a probate account number.

This real-life scenario stresses the importance of estate planning. It is not enough to just have a will, it is important to update the beneficiaries of financial accounts such as life insurance, 40lk accounts and bank accounts with a POD or payable on death form. In Jerry’s case his deceased roommate designated him as the beneficiary of her financial accounts. These assets then became part of Jerry’s estate. Designating beneficiaries is the most important part of post -death estate planning. The same amount of diligence should be applied to managing authorizations while you are alive.

A durable power of attorney protects your wishes while you are alive. This assignment gives a person you trust the ability to handle your affairs on your behalf whether you are healthy or disabled.  Your attorney-in-fact can be entrusted with the responsibility of handling your financial affairs on a limited basis and making decisions in your absence or if you become incapacitated.  A power of attorney can be revoked at any time and replaced with a new one to better reflect the responsibilities you wish to entrust in your attorney in fact.

The power of attorney is one of the most important living designations you can make. Just as the power-of-attorney grants authority to handle financial affairs in your absence or incapacitation, a medical power of attorney designates a person of trust to make important healthcare decisions when you cannot.  The language is extremely specific and outlines exactly what you do and do not want in specific situations such as a DNR order as well as making lifesaving decisions when you are incapacitated.

It is a thoughtless and selfish person who does not create both living and end of life

documents. The cost is minimal and doesn’t even require an attorney. Documents can be prepared using on-line guides available through any of several sources, and as long as documents are signed and witnessed, they will pass the legal test. Creating an emotionally traumatic situation for a relative or loved one unable to make a lifesaving decision, or amid grieving by having to sort through and figure out how to go forward with end-of-life details is fiscally irresponsible. All puzzles must have borders and when it comes to estate planning, having all the pieces in one place makes putting them together so much easier.

©Marsha Eastwood

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