Insurance Considerations for End-of-Life Planning

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End-of-life planning does not only consist of decisions that family members can make once they pass away. End-of-life planning involves scenarios that many people can find themselves in but don’t necessarily plan for ahead of time. One example is succumbing to a coma. Let’s say a grandmother suffers a terrible fall in her home, and while being transported to the hospital, she falls into a coma. 

Because she is unresponsive, how should the physician proceed? Do her children want her removed from life support after a certain amount of time? Who is the woman’s power of attorney? What are the woman’s wishes in this type of predicament? With end-of-life planning, these types of questions are taken care of for everyone. The last thing you want to do while a family member faces death is to assume that this decision is what they wanted.

What are some end-of-life requirements that you need for your plan?

One requirement for your end-of-life plan involves a living will. The purpose of a living will is to inform your loved ones of your wishes about health care, property, and assets. What most people do not know about a will is that certain information should be omitted from the will. For example, certain types of property cannot be included in a person’s will because independent rules govern what happens to a property once a person dies. These rules apply regardless of what the person expresses in their will.

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What are some examples of properties that cannot be included in a person’s will?

Some properties not included in a person’s will consist of the property passed down to a beneficiary. Some examples are life insurance proceeds, retirement plan proceeds, stock and bonds, and proceeds from a payable-on-death bank account. These types of properties are automatically awarded to the beneficiary. 

For example, life insurance proceeds automatically go to the beneficiary, regardless of their wishes expressed in their will. The same applies to properties in a living trust. Setting up a living trust is an excellent way for people to avoid probate.

Why is it essential to establish a power of attorney?

Another end-of-life requirement that a person needs is a power of attorney. Establishing a power of attorney allows an individual to determine a medical proxy that can make decisions for the individual. The medical proxy is responsible for all medical decisions that the individual cannot make if incapacitated. 

Some of the decisions involve whether the person wants to be resuscitated or not, whether the person wants to remain on life support, or whether the person wants CPR performed on them or not. In many states, a medical proxy’s powers begin when the individual loses legal capacity and stays in effect as long as the individual is incapacitated.

Why should funeral instructions be excluded from a person’s will?

Funeral arrangements should be left out of a person’s will because funeral arrangements are the first business matter to tend to when a person dies. Because the settling of the estate and the probate proceedings occur after a funeral, your loved ones may not have the chance to hear your wishes until after the funeral has happened, which will be too late. It is best to create a separate document that expresses your funeral wishes and share it with the executor of your estate.

Why should people not use wills to escape probate?

Another fact about living wills that many people are not aware of is that they are still subject to probate proceedings. Although probate proceedings can take months, the existence of a living will help to speed the process up. Your loved ones do not have the extra burden of dividing all of your property for you. The probate court just has to follow your wishes. If a person wants to avoid probate, they can leave property to a trust fund and establish the preferred recipient as the beneficiary.

Why should a person establish advance care directives?

Establishing advance care directives gives a person an opportunity to still be in control of decisions regarding their health. While choosing a power of attorney is essential, advance care directives can state a person’s wishes directly for their end-of-life plans. Some of the decisions that can be expressed in an advanced care directive include decisions in regards to CPR, life support, resuscitation, and organ donation. Once your wishes are expressed in an advanced care directive, it is essential to inform your medical proxy and the physician about your orders.

Another decision that can be expressed through an advanced care directive is living in a nursing home or entering into hospice care. If individuals want to spend the rest of their days at home, that should be expressed in your advanced care directive. It would also be beneficial to research the type of hospice care you would like to enjoy the rest of your days.

Putting an end-of-life plan in place at a young age can save your family a lot of frustration and possible infighting when the inevitable happens. Those who are financially independent can protect their finances, assets, and properties by having these estate planning documents in place.

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