Contemplating death is uncomfortable. For many, adding to that discomfort is a lack of planning for the end of their life.
Fortunately, there are many helpful resources that can provide you with specific actions you can take to have your affairs in order when you pass away. Consider this guide to be one of those resources.
What is end-of-life planning?
End-of-life planning provides you with the tools to control your financial and health care decisions in the event that you're unable to make these decisions yourself. It makes it easier for your family to tend to your affairs after you're gone. It also gives you the peace of mind knowing they are legally required to act according to your wishes.
Why is end-of-life planning important?
You've worked hard all of your life to provide for yourself and your family. In many cases, little thought is given to the end of life because we are continually dealing with our most urgent wants and needs. It's an act of love and compassion for others when you take the time to plan ahead for the end of your life.
End-of-life planning decisions involve your health care, financial assets and liabilities, funeral arrangements, insurance planning, and your overall estate plan.
[ Related read: What happens if debt outlives you or your ability work? ]
End-of-life planning checklist
The following checklist addresses the decisions you'll need to make and can serve as a tool for you to follow and take action.
✅ Health care planning
Retaining some control over your health care if you become incapacitated is integral to end-of-life planning. You accomplish that by specifying your care choices ahead of time with an advance care directive. These legal documents are also known as a living will, advance directive, personal directive, or medical directive.
These documents state your preference for end-of-life care and handling, including your decisions about:
- Being kept on life support
- Being resuscitated when your heart or breathing stops
- The use of nursing homes, hospitals, or hospice
- Organ and tissue donation
An attorney can draft the document for you to make decisions so your family doesn't need to during times that are emotional and stressful.
✅ Financial planning
The effort and time you invest in organizing your finances will make it much easier to settle your estate after you've passed away. Having your assets in a trust will expedite the execution of your financial wishes. That's why you should assess your assets and debts, and record action items you want to complete while you're living. This may include paying off your mortgage or student loans for children or grandchildren, or making charitable gifts.
Here are six areas of your finances for you to review:
- Real estate and mortgages
- Bank accounts
- Life insurance
- Outstanding loans
Create a record of your findings and keep the document in a place where a loved one knows they can access it when needed.
[ Related read: Your go-to financial planning checklist for every stage of life ]
✅ Funeral planning
The majority of people who create an end-of-life plan also design their funeral and pre-pay the associated expenses. There are key decisions to make concerning your final arrangements, including:
- A list of whom to notify when you die
- Funeral home
- Type of service
- Treatment of remains
- Funeral expenses
- Cemetery expenses
This may be the topic you wish to least discuss and plan for, but not addressing it in advance places an enormous burden on your family's shoulders during a difficult time. The funeral home you select can provide you with a large amount of information to help you make decisions concerning your final arrangements.
✅ Estate planning
This may be the most complex area of your end-of-life planning, but it's vital. An estate plan isn't a single document. It's a collection of decisions and documents that ultimately guide your decisions concerning the distribution of all of the assets you've accumulated during your life.
If your estate is large or complex, your financial advisors (CPA, attorney, financial planner, etc.) can help you create a solid estate plan. Even if your estate isn't complicated, you'll still want to work with a trusted advisor to help you with important issues, such as:
- Ownership of assets
- Financial power of attorney
- Last will and testament
- Living trust
While creating an estate plan takes time and money, it's well worth having your financial affairs in order and your assets distributed according to your wishes.
✅ Insurance planning
As you conduct your end-of-life planning, another very important aspect is making sure your insurance is in order. You’ll want to meet with your financial advisor and review your:
- Health insurance
- Life insurance
- Disability insurance
- Critical illness insurance
- Long-term care insurance
Be sure that all of your policies are together in one place that a family member is aware of and will be able to access them.
End-of-life planning documents
The end-of-life plan you create is going to require the creation of multiple legally binding documents.
📝 Advance care directive
This outlines your health care preferences if you're unable to communicate. It addresses whether or not you want to be resuscitated, intubated, or hospitalized. Your choices are communicated through documentation concerning:
- DNR, or "do not resuscitate." It instructs health care workers not to use CPR should your heart or lungs stop functioning.
- DNI, or "do not intubate." Intubation entails inserting a tube into your body to administer artificial ventilation.
- DNH, or "do not hospitalize." It lets your caregivers and emergency medical teams know that it's against your wishes to be transported to a hospital.
- POLST, an alternative to the documents mentioned above. It's a portable medical order communicating your preferences for resuscitation, intubation, and hospitalization no matter where you are or if you've been transferred to a different facility.
📝 Health care proxy
This is also known as medical power of attorney. It gives another person the power to make care and treatment decisions on your behalf if you're unable to do so. The person you designate to do that is called your proxy.
📝 Financial power of attorney
This gives someone you designate the authority to make legally binding financial decisions for you. The document specifies if that designee can have full or limited access to your finances and property.
📝 Living trust
This is a legal entity that holds your property while you're alive. It then distributes your property after you die and allows your property to pass to your heirs without going through the probate process.
📝 Last will and testament
This assigns an executor to your estate. It also lists your assets and assigns beneficiaries. If applicable, it assigns guardians for your minor children and their personal property.
The bottom line
As you can see, end-of-life planning takes time, resources, and commitment. It's not only done for your benefit, but for your loved ones as well. This guide will serve you well if you choose to take the journey to address sensitive issues and plan for the future
Jack Wolstenholm is the head of content at Breeze.
The information and content provided herein is for educational purposes only, and should not be considered legal, tax, investment, or financial advice, recommendation, or endorsement. Breeze does not guarantee the accuracy, completeness, reliability or usefulness of any testimonials, opinions, advice, product or service offers, or other information provided here by third parties. Individuals are encouraged to seek advice from their own tax or legal counsel.