A year ago, I moved my family back to our home state after being away for seven years. I was looking forward to being closer to my father. He was 84 years old and had been ill for a very long time; he had survived kidney cancer, but his remaining kidney was failing, and he had been on dialysis for five years. He was not doing well.
Six months later, my dad’s health took a turn for the worse. He developed early onset dementia and started to refuse dialysis. My sister and I tried to do what we could for him, but he refused help. My dad was hospitalized after, unbeknownst to us, having missed two dialysis treatments. We visited him in the hospital where he refused care again, which resulted in him requiring hospice care. A week later, at 3 a.m. I got the call: My father had passed away.
I had to plan for my father’s estate amidst the wreckage. My father died without a power of attorney, which would have allowed my sister and me to get him treatment. He left no will or trust describing his end-of-life wishes or intentions for his assets. In his confusion he had also stopped paying his life insurance premiums, depriving the family of protection he had invested in for years. Not only did my family have to bear the grief of my father dying, but we had to assume the financial burden of his passing.
Three Estate Planning Tips
Frequently, people express the desire to avoid burdening their children, but few complete all of the necessary estate planning steps. I’d like to explore a few in depth.
- The first of these steps is life insurance; does the client have enough to pay for end-of-life care, including funeral costs?
- The second step to consider is a will, which will enable the client to dictate who receives what assets from their estate.
- The third and final step that a client can take to protect their heirs is to set up a trust. Placing their assets in a trust will give the client more control over their estate.
I will begin with life insurance. Traditionally, its primary purpose is to replace a person’s paycheck in the event of premature death. The rule of thumb is that a person should have 10 times their current salary as a death benefit. For example, if a person makes $100,000 per year, then they should have a million-dollar life insurance policy. This is especially true when minor children or college-bound children are involved, as well as when the policyholder has an outstanding mortgage. With time, you may find yourself …….