End-of-Life Planning: An overview of the documents you need

Summary points:

• This article outlines and describes some of the most important legal documents you’ll need to include as part of your end-of-life planning, including:
  • Your last will and/or living trust determine how assets are passed on after your death; a living trust may also determine how assets are used and distributed if you are incapacitated
  • A Power of Attorney (POA) document allows a representative to act as an agent on your behalf.
  • Healthcare Powers of Attorney (HCPOA)/Advance Directives and Portable Orders for Life Sustaining Treatment (POLST) outline your intentions regarding your medical care.

Planning for the end of one’s life is less about mortality and more about the peace of mind that comes with being well prepared. End-of-life planning can happen at any age, and should happen as soon as you have assets you want to protect and pass on. It’s much easier to start thinking about some of the challenging decisions involved when they are not urgent and then revisit them periodically over time.

There are a number of legal documents you’ll want to make sure you have completed, safely stored, and shared with your family. Undertaking the process of completing the documents can be very helpful in guiding you through the necessary decisions that need to be made and understanding the choices you have.

Below is a quick guide to some of the most important documents you’ll want to include in your end-of-life planning process.

Last Will

Your last will determines how your assets are passed on after your death and is also where you will name guardians for any minor children. A will does not become effective until after your death, so you are able to change it at any time. If you have any assets or accounts that have a named beneficiary, such as an IRA or 401(k), those will pass to the beneficiary(ies) named, outside of the will.

It’s important to be aware that wills go through a probate process, which is public and may be lengthy; wills can also be challenged. Consider setting up trusts if you have complex assets or are concerned about privacy.

Revocable Living Trusts

A revocable living trust accomplishes many similar objectives to a will, also outlining how your assets are transferred after your death. But a living trust includes provisions on how assets are to be used and/or distributed should there be a period of disability, which may go into effect during the grantor’s lifetime. You typically name yourself as the trustee, which means assets remain in your name and under your management, but you will also list a successor trustee who will take over those duties should you be incapacitated or after your death. The trustee is required to manage the trust’s assets as a fiduciary to the beneficiaries of the trust—your heirs.

Powers of Attorney

A power of attorney (POA) document allows someone to act as an agent on your behalf. This is most often used if you become incapacitated and unable to make your own decisions, but it may also be used in other circumstances. Under a POA, a representative can make decisions for you based on the terms of the document. They can be very broad or more narrowly tailored, depending on the application. Many banks and financial institutions have their own POA documents for clients to fill out.

A durable power of attorney (DPOA) goes into effect immediately upon signing the document and remains effective indefinitely. Alternatively, you can choose to have a POA go into effect on a specific date or under a particular circumstance, such as in the event of a disability; these are called “springing” powers of attorney.

Healthcare Power of Attorney/Advance Directive

The Healthcare Power of Attorney (HCPOA) and Advance Directive are often combined, depending on state law. In these documents, individuals express their intentions and desires around end-of-life care. The HCPOA identifies representative(s) you assign who can make medical decisions about your care should you be unable to express your wishes. The Advance Directive outlines your intentions regarding your medical care, such as whether you want life-sustaining measures like artificial ventilation and tube feeding, and how you’d like your treatment options prioritized.

Portable Medical Orders

Portable Medical Orders are also called POLST (for Portable Orders for Life Sustaining Treatment); a POLST is a way to communicate your wishes to all medical providers, including those outside of a hospital or clinic. The POLST gives more specific directions than an Advance Directive and is mostly used by individuals facing serious illness or medical conditions.

Each state has its own POLST form and process. You can learn more at https://polst.org/  and find information about your state POLST forms at https://polst.org/state-polst-programs/

Conclusion

End-of-life planning is an integral aspect of long-term financial and estate planning and doesn’t (and shouldn’t) wait until there is a sense of urgency. Thinking about your end-of-life wishes and priorities well ahead of time allows you the space to clarify your priorities and make the decisions that will leave you with peace of mind.

It’s also important to have these conversations openly with your family, so that they truly understand your needs and desires and can be prepared if they need to step into a decision-making role. Talking about your mortality can be uncomfortable at first, but approaching it matter-of-factly and focusing on details can help smooth the discussion. And it’s much better to have the discussions when you’re healthy and able to plan ahead rather than leaving things up to loved ones when they are unable to consult you.

At Coldstream, we are here to help guide you through that process, directing you to the documents and decisions involved. We are also here to help you explore your choices and navigate those discussions with your family. Feel free to reach out to your Coldstream advisor if you would like to discuss these issues further.

*Certified Financial Planner Board of Standards Inc. owns the certification marks CFP® and Certified Financial Planner™ in the U.S.