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Wills, living wills, health care powers of attorney, beneficiary designations, and trusts – these are terms you probably recognize from every article that’s ever been written on estate planning.  For most people, estate planning is on the nagging list of ‘things I know I’m supposed to do, but don’t, and feel guilty about.’

When you’re rushing to your kid’s soccer practice, trying to keep up with your workload at home and the office, and otherwise living a full life, the last thing you want to make time for is something as unpleasant as deciding who gets your money when you’re dead, or what your family should do if you’re in a coma.

To add to the unpleasantness, you have to pay someone to prepare the documents, wrestle with some difficult decisions (Do I trust my brother-in-law to raise my kids if I’m gone?) and then wade through a finished product written in language that’s often difficult to understand.  No wonder it’s avoided.

I’m here to tell you why it’s worth it.

Over the past several months I’ve been working with several families who are struggling with death and dying, and the impact those documents have had on them.  I’d like to share just two examples.

In Ohio, any pre-divorce beneficiary designation is automatically revoked as part of the divorce – unless it is re-instituted as part of the divorce paperwork, or by a new designation post-divorce.  This law was put in place in January 2007, and sounds like a reasonable way to prevent an insurance policy, retirement account, or annuity benefit from going to the wrong recipient.  But what if you still wanted everything to go to your former wife and your young children, so you left your beneficiary designation in place, and you didn’t know about the change in the law?

Your former wife doesn’t inherit the funds.  Fortunately, you named your children as contingent beneficiaries (Another reason to always have a contingent beneficiary named!) so they will inherit your assets.  But there’s a catch.  Because they aren’t adults, the funds have to be monitored by the probate court, and special guardianship accounts have to be set up.  An ‘Application for Authority to Expend Funds’ has to be submitted to the court and approved.  Distributions can’t be made without the submission of requests to the custodian, and checks have to be signed by guardians.  This will go on for years and years.

All this adds legal expenses, time and stress to a situation that is already fraught with emotion.  And when the children turn 18, Ohio says they are entitled to all the funds.  Remember when you were a mature, financially responsible 18 year old?  Me neither.

Another client has been ill for a very long time, and has defied the odds by living to see her grandchildren come into the world.  But her health is failing, and after several scares in the hospital and at home, her family knows they need to be prepared for her death, and the possibility that they will be faced with difficult decisions related to her health care.

In Ohio, a living will and durable healthcare power of attorney are the key documents used to spell out what you want to happen when you can no longer communicate your wishes.  A living will is limited to deathbed concerns only, and specifies whether you want to have life-prolonging measures taken if there is no hope for recovery.  For example, you can specify that you do not want the hospital to resuscitate you if your heart stops.

A durable power of attorney for healthcare covers all healthcare decisions, and lasts only as long as you are unable to make decisions for yourself.  You may not want to receive a blood transfusion, or be put on dialysis, and you can specify this in your document.  You also name the people you want to make decisions about your medical treatment, when things come up that you cannot anticipate.

We were able to review my client’s living will and healthcare power of attorney, and make sure the documents still address her wishes.  These documents won’t alleviate the sadness surrounding her illness, but they will help prevent disagreements between her children about what their mother wanted, and the resentment that remains when a person dies under circumstances that are not as well thought-out.

As Chip discussed in his blog last week, meeting agendas with our clients cover a wide variety of issues that impact their financial and emotional well-being.  Estate planning is one that we consistently bring up, and we recommend that client documents are reviewed every 5 years or so.

While many people feel that not much has changed in the law or their lives, and they put this off, it is often difficult to anticipate or think about everything that might need updated until you actually go through the exercise of reviewing the documents with a qualified attorney.

Death and dying are not subjects the living want to address.  After nearly 30 years of seeing planning decisions put off, and the impact it’s had on peoples’ lives, I promise this is planning work worth crossing off your list.